Xiaomi Corporation (“Xiaomi” or the “Group”; stock code:1810), a consumer electronics and smart manufacturing company with smartphones and smart hardware connected by an Internet of Things (IoT) platform at its core, announced its unaudited consolidated results for the three months ended March 31, 2024 (“the Period” or “Q1”) with quarterly revenue registering double-digit year-over-year growth for two consecutive quarters. During the Period, the Group’s total revenue amounted to RMB75.5 billion, an increase of 27% YoY. Adjusted net profit hit a record high, increasing by 100.8% YoY to RMB6.5 billion. This included RMB 2.3 billion in expenses related to its smart Electric Vehicle (“EV”) business and other new initiatives, signaling accelerated growth. Due to the efficient execution of its core operating strategy of “dual emphasis on scale and profitability”, in the first quarter of 2024, Xiaomi’s gross profit margin reached 22.3% at the Group level, an increase of 2.8 percentage points YoY. The Group diligently executed its operating strategies, driving double-digit revenue growth in Q1 in its three core businesses — smartphones, IoT and lifestyle products, and internet services. Xiaomi’s multiple growth engines, combined with its robust performance of the smart EV business, propelled its results to far exceed market estimates.
The profitability of Xiaomi’s core businesses remains solid over the long term, with abundant cash resources facilitating strong support for technological innovation and the development of smart EV business. As of March 31, 2024, the Group’s cash resources reached RMB127.3 billion. Its research and development expenses in the first quarter were RMB 5.2 billion, up 25.4% YoY, with numerous technological breakthroughs achieved, particularly in smart EV technologies.
Premiumization strategy pays off with rising ASP of smartphones
Driven by globalization and premiumization strategies, Xiaomi’s global smartphone shipments increased by 33.7% YoY to 40.6 million units during the Period, marking YoY growth for three consecutive quarters. Smartphone revenue achieved a fourth consecutive quarter’s growth, reaching RMB46.5 billion. According to Canalys, Xiaomi maintained its top three global smartphone shipment ranking for 15 consecutive quarters, with a 13.8% market share in the first quarter.
The profitability of the smartphone business continued to improve, with the gross profit margin in the first quarter reaching 14.8%, an increase of 3.6 percentage points YoY. The Group continued to make strides into premium price segments. According to third-party data, Xiaomi’s market share of smartphone sales in the RMB5,000 to RMB6,000 price segment in mainland China reached 10.1% during the Period, up by 5.8 percentage points YoY. The proportion of global premium smartphone shipments also reached a new high in the first quarter, representing 21.7% of total smartphone shipments, up by 1.4 percentage points YoY.
Xiaomi’s global expansion has paid off, with solid growth in key markets across the Middle East, Latin America, Africa, and Southeast Asia. According to Canalys, in the first quarter of 2024, the Group’s smartphone shipments ranked among the top three across 56 countries and regions globally and among the top five across 67 countries and regions globally. Compared to last year, Xiaomi ranked among the top three in 51 markets and the top five in 65 markets. The Group’s competitive edge in these markets has further strengthened.
IoT business margin hits record high with smart large home appliances showing strong momentum
During the Period, IoT and lifestyle products reached a historic high, with revenue increasing by 21.0% YoY to RMB20.4 billion. The gross profit margin notably increased by 4.1 percentage points YoY to 19.9%, hitting a record high. Xiaomi further consolidated its leading edge in IoT product categories.
Capitalizing on its market reputation, rich product portfolio, and exceptional user experience within the smart ecosystem, Xiaomi’s revenue from smart large home appliances increased by over 46% YoY, with sales volume maintaining strong growth. During the quarter, the air conditioner shipments exceeded 690,000 units, up 63%; the refrigerator shipments exceeded 530,000 units, an increase of 52%; and the washing machine shipments exceeded 360,000 units, up 47%, all on a YoY basis. Xiaomi’s premium TV category also underwent continuous upgrades.
The growth momentum across all product categories remained strong. According to IDC, the global shipments of Xiaomi tablets increased by 93% YoY. Additionally, Xiaomi has made significant strides in the wearables. According to Canalys, the TWS earbud shipments ranked No. 1 in mainland China and rose to No. 2 globally.
Solid internet services growth spurs global expansion
During the Period, internet services maintained solid growth, with revenue reaching a record high of RMB8.0 billion, representing an increase of 14.5% YoY. The gross profit margin of internet services reached 74.2%. The Group’s MAU globally and in mainland China both hit record highs. In March 2024, global MAU reached 658.1 million, an increase of 10.6% YoY, while the MAU in mainland China reached 160.4 million, up 9.7% YoY.
Xiaomi has been actively solidifying global partnerships. In the first quarter, revenue from overseas internet services reached RMB2.5 billion, hitting a record high and accounting for 31.2% of total internet services revenue.
Scaling EV production to target over 100,000 new vehicle deliveries for 2024
The debut of Xiaomi’s smart EV has sparked tremendous enthusiasm among users, swiftly emerging as a new growth engine. Xiaomi’s first smart EV, the Xiaomi SU7 Series, was officially launched on March 28, 2024, completing the overall layout of the Group’s strategy of “Human × Car × Home”. Positioned as a “full-size high-performance eco-technology sedan”, the Xiaomi SU7 Series includes three models, with prices starting at RMB215,900. The official launch garnered widespread market attention, generating strong order demand. As of April 30, the cumulative locked-in orders for the Xiaomi SU7 Series reached 88,063 vehicles. As of 10:00 a.m. Beijing time on May 15, the cumulative deliveries reached 10,000 vehicles, setting a new industry record for delivery speed by a new brand’s debut car model.
Buoyed by the exceptional performance of Xiaomi’s SU7 Series, which exceeded market expectations, the Group has set a target of over 100,000 new vehicle deliveries for 2024, showcasing its confidence in the series’ competitiveness and production capacity. Xiaomi is bolstering efforts to ramp up the expansion of production capacity by starting double-shift production in June to ensure timely delivery and expand its sales and service network. The Group plans that by the end of 2024, its sales and service network will encompass 219 sales stores covering 46 cities, and 143 service centers across 86 cities.
As a tech company venturing into the EV manufacturing industry, Xiaomi aims to integrate smart features. The Group is firmly committed to its new goal for 2020–2030, which is to invest in foundational core technologies and to become a global leader in the evolving realm of cutting-edge technologies. In the first quarter of 2024, its research and development expenses were RMB5.2 billion, up 25.4% YoY. Xiaomi has made substantial advancements in smart EV technology, underpinning the continuous development of its smart EV.
For Xiaomi Pilot Autonomous Driving, Xiaomi remains committed to full-stack proprietary technology research and development. By harnessing advanced frameworks that incorporate cutting-edge algorithms such as Road-Mapping Foundational Model, Super-Res Occupancy Network Technology and Adaptive BEV Technology, Xiaomi has made a breakthrough with the first mass production of End-to-end AI Model Technology in mainland China. Xiaomi’s autonomous driving team boasts over 1,000 skilled professionals, with a plan to expand the team to 1,500 and 2,000 in 2024 and 2025 respectively. City Navigate on Autopilot (NOA) on Xiaomi Pilot Max is scheduled to be rolled out across 10 cities in mainland China by the end of May 2024, with nationwide coverage expected by August 2024.
