Source: Finance Association
Author: Tang Zhixiao
① Xiaomi's main mobile phone business recovered, up 32.9% from the same period.
② The Xiaomi SU7 will challenge the delivery of 120,000 vehicles this year.
③ Lu Weibing said he is confident that gross profit will continue to grow.
Recently, the Xiaomi Group released its financial report for the first quarter of 2024.
The report shows that Xiaomi's Q1 revenue in 2024 was 75.5 billion yuan, an increase of 27% over the previous year. Adjusted net profit reached 6.5 billion yuan (including 2.3 billion yuan for innovative business expenses such as smart electric vehicles), an increase of 100.8% over the previous year.
At the performance meeting, Xiaomi Group President Lu Weibing said, “In 2024, the Xiaomi Group defined the business strategy for the whole year as steady and enterprising.”
A CIFA reporter noticed that compared to before, Xiaomi's overall inventory has increased. Lin Shiwei, CFO of the Xiaomi Group, responded that due to the increase in sales of Xiaomi phones, Xiaomi has prepared the corresponding raw materials and complete machines; secondly, in order to cope with 618, Xiaomi will prepare corresponding supplies at the end of March. Finally, it is because the car was only announced for sale on April 5, and the corresponding car stock was also prepared in March.
Also, as the number of orders for the Xiaomi SU7 continues to rise, the new car delivery target will reach 120,000 units throughout 2024. Earlier, Xiaomi revealed that the SU7 will be delivered in excess of 100,000 units.
Mobile phone revenue increased by more than 30%, increasing offline shipments
In terms of performance composition, Xiaomi Group's Q1 smartphone segment revenue in 2024 was RMB 46.5 billion, an increase of 32.9% over the same period last year. Mobile phone revenue accounted for 61.6% of total revenue, an increase of 2.8% over the same period last year.
According to the report, global shipments of Xiaomi phones reached 40.6 million units in 2024Q1, an increase of 33.7% over the previous year. According to data provided by Canalys, Xiaomi's mobile phone market share has been in the top three in the world for 15 consecutive quarters. The market share in the global market this quarter was 13.8%, of which models priced at 3,000 yuan or more accounted for 21.7% of shipments
Xiaomi said that among mobile phones sold in mainland China, the market share of the 5000-6000 yuan range reached 10.1%, and the market share of offline channel shipments was 9%. In the future, Xiaomi will continue to push forward the new retail strategy.
At the performance meeting, Lu Weibing told CFA reporters: “2024 is the year of the Xiaomi ecosystem upgrade. The goal is to expand the number of stores in the mainland China market to 20,000 in three years, optimize store location choices, and increase the store area.”
The ASP (average selling price) of Xiaomi smartphones was slightly reduced by 0.6% to 1144.7 yuan from 1151.6 yuan per unit in the first quarter of 2023. Regarding the decline in this data, during the earnings call, Lu Weibing, partner and president of the Xiaomi Group, said that on the one hand, due to seasonal factors, the launch of the Xiaomi 14 this year was a month and a half ahead of last year's Xiaomi 13. In addition, Xiaomi is growing rapidly in emerging markets such as the Middle East, Latin America, Southeast Asia, and Africa. Overall, these markets are still low ASP regions.
In terms of overseas markets, according to data provided by Canalys, in 2024Q1, Xiaomi phones ranked in the top three smartphone shipments in 56 countries and regions, and the top five in smartphone shipments in 67 countries and regions.
Among them, Xiaomi ranked second in shipment volume in the Middle East market, increasing its market share to 20.9%; in Latin America, Southeast Asia, and Africa, it ranked third in shipments, with market shares of 15.3%, 16.5%, and 10.6%, respectively.
In response to the growth of overseas markets, Lu Weibing said that high-end technology is progressing well. Although Xiaomi phones previously had a small base in the high-end market, they have doubled their growth. “Overseas users, in particular, are very accepting of Xiaomi phones over $600, and orders from the international market have been added three times.”
New models are already under development
Since delivery of the SU7 only began in April, the company's current financial report does not reflect the operating conditions of the automobile business.
Xiaomi's first car, the SU7, was released during the 2024Q1 reporting period. According to the data, as of April 30, the number of locked orders for the Xiaomi SU7 reached 8,8063 units in the first month. As of May 15, 2024, the total number of new Xiaomi SU7 series cars delivered had reached 10,000.
At the performance meeting, Lu Weibing told the Financial Federation reporter that currently the Xiaomi car factory's production capacity is climbing at full speed. The plan is to increase production to double shift production in June. He is confident that more than 10,000 units will be delivered in June, and that it will ensure delivery of more than 100,000 units throughout the year 2024, and challenge the goal of completing 120,000 units throughout the year.
In terms of after-sales service in the automotive business, Xiaomi aims to cover 50 cities and more than 200 stores by the end of 2024.”
In terms of intelligent driving, Xiaomi plans to invest 1.5 billion yuan, with a total investment of 4.7 billion yuan in the first phase. Currently, Xiaomi has more than 1,000 engineers, and plans to expand to 1,500 by the end of this year and 2,000 next year.
According to previously disclosed information, Xiaomi will launch NOA, an intelligent pilot city in 10 cities in May, and will be fully launched across the mainland in August.
Lu Weibing also revealed that Xiaomi does have other models under development, but the company is currently focusing on delivering the Xiaomi SU7. There is a strict internal confidentiality system for new models, and it is not yet time to disclose it.
“Starting in the second quarter, Xiaomi will begin publishing some specific data related to the automotive business.” Lu Weibing said.
The IoT business is recovering quickly, and Lu Weibing said he is confident that gross profit growth will continue
According to comprehensive financial data, the performance of gross margin exceeding expectations is mainly due to the rapid growth of the IoT business, tablet and major appliances business, which led to an increase in IoT gross margin to about 20%. The significant increase in the gross margin of the hardware business will stabilize the basic performance market of the company.
According to the report, Xiaomi's AIoT and consumer products business revenue was RMB 20.4 billion, up 21.0% year on year, and the division's gross margin reached 19.9%, an increase of 4.1 percentage points, accounting for 27% of total revenue. Xiaomi's Internet business revenue reached RMB 8 billion, up 14.5% year over year, accounting for 2.8% of total revenue.
As of March 2024, the number of monthly active users of Xiaomi worldwide reached 658 million users, an increase of 10.6% over the previous year. Among them, the number of IoT devices (excluding smartphones, tablets and laptops) connected to the Xiaomi AIoT platform increased to 786 million units, an increase of 27.2% over the previous year.
Xiaomi said that the number of users with five or more devices connected to the Mijia AIoT platform (excluding smartphones, tablets and laptops) reached 15.2 million, an increase of 24.2% over the previous year. In March 2024, the number of monthly active users of the Mijia App increased by 14.0% year-on-year to 89.1 million.
Lin Shiwei, CFO of Xiaomi Group, said, “Xiaomi's smart appliances business continues to grow rapidly. Among them, shipments of air conditioners exceeded 69% million units, up 63% year on year, refrigerator shipments exceeded 530,000 units, up 52% year on year, and washing machine shipments increased 47% year on year in the first quarter.”
Compared with the financial reports for the last three quarters, Xiaomi's revenue growth rate has increased
In an interview with a reporter from the Financial Services Association, Lu Weibing said, “Over the past few years, Xiaomi has continuously improved the top-level design of the entire company. We have internally broken down the 'people x car x family ecology' strategy into six major parts, including high-end strategy, leading industrial capacity strategy, AI strategy, OS strategy, and chip strategy and new retail strategy. These changes have enabled us to achieve our current performance.”
Speaking about profits, Lu Weibing added that although external factors, such as memory prices, may have a certain impact on the company's performance, these effects are within a manageable range. “As long as there are no extreme changes in the external environment, Xiaomi is confident of maintaining the growth momentum of the first quarter in terms of overall gross margin.”
Regarding the big model, Lu Weibing told the Financial Federation reporter: “Xiaomi will not make a general-purpose big model, but will continue to work on large end models, focus on lightweight deployment of large models, promote “cloud integration”, deeply integrate the big AI model with the Xiaomi Surge OS, and combine it with the needs of user scenarios.”
In the report, Xiaomi said that at present, Xiaomi has used AI technology in new retail, intelligent manufacturing, etc., to improve operational efficiency.
Editor/Jeffy