Source: Securities Times.
Author: Wang Xiaowei

Xiaomi's autos business is listed separately for the first time in Xiaomi's financial report. As soon as the financial report card is released, the market's attention collectively focuses on the revenue and net income indicators of Xiaomi's autos.

According to the financial report, the revenue from innovative businesses such as Xiaomi's smart electric cars is 6.4 billion yuan, with smart electric car revenue accounting for 6.2 billion yuan. Looking at the net income indicators, the adjusted net loss is 1.8 billion yuan.

Subsequently, the topic of 'Xiaomi loses over 0.06 million for each car sold' became a hot search. Individuals related to other car brands also criticized Xiaomi and Lei Jun for losing money on car sales, believing that 'selling cars at a loss is dumping'.

Late that night, Lei Jun responded on his personal Weibo account.

Lei Jun stated that building cars is very difficult, but success is definitely cool! Xiaomi's auto business is still in the investment phase, and he hopes everyone can understand.

Breaking down this response, Lei Jun has articulated the phrase 'building cars is very difficult, but success is definitely cool!' in various speeches and responses. The stage positioning of 'Xiaomi's auto business is still in the investment phase' has long been known in the market.

The head of a state-owned audit agency in peking explained to reporters that in the early stage of the automobile business, costs including factory construction, technological research and development, personnel costs, and store construction need to be allocated, generally speaking, periodic losses are considered normal.

The second quarter financial report shows that Xiaomi's second quarter smart automobile and other innovative business deliveries accelerated, with a target of delivering 0.1 million units by the end of November. In the second quarter, 27,307 units were delivered, generating 6.4 billion yuan in revenue.

In addition to the losses, the level of 15.4% gross margin has also been highly focused by the market.

This can be seen in Xiaomi's industrial landscape to determine the exact position of this level. In comparison, during the same period, Xiaomi's gross margin for automobile and mobile phone businesses was 21.1% and the group's overall business gross margin stood at 20.7%. The mainstream market opinion believes that Xiaomi's automobile business is dragging the group down.

In response, Lu Weibing, partner and group president of Xiaomi, told reporters: "Gross margin is very important to us. Without good gross margin, the larger the scale, the greater the losses. As Xiaomi's first car, the company is relatively satisfied with this gross margin."

Lu Weibing emphasized that in the future, after the scale is expanded, the current heavy costs will be significantly reduced. He is confident in continuously improving the gross margin of Xiaomi cars in the future.

In terms of deliveries, as of June 2024, Xiaomi's automobile factory has started double-shift production, with production line maintenance optimization in July. The monthly delivery volume of Xiaomi automobiles has exceeded ten thousand units for two consecutive months from June to July 2024. It is expected that the total delivery target of 0.1 million units for the Xiaomi SU7 series may be achieved ahead of schedule in November 2024, and a new target of delivering a total of 0.12 million units of the new Xiaomi SU7 series for the full year of 2024.

In terms of channels, as of June 30th this year, Xiaomi Automobile has reached 87 sales stores, covering 30 cities in peking. Starting from July 1st, the delivery of the Xiaomi SU7 series will further accelerate, and the delivery period after locking in orders is expected to be shortened by up to 5 weeks.

The aforementioned audit leader believes that when measuring start-up companies or start-up business of companies, in addition to indicators such as net income and revenue, indicators that should be given more attention include cash flow, assets to liabilities ratio, etc.

In the morning session of August 22, Xiaomi Group opened high, with an increase of over 7% as of the time of writing.

Editor/rice