Xiaomi reports Q4 revenue jump, beats estimates

Xiaomi ended 2019 on a high, reporting a 27.1% year-over-year jump in the fourth-quarter revenue aided by overseas expansion, beating analysts’ estimation.

The Chinese giant said sales in the fourth quarter jumped to 56.5 billion yuan ($8 billion), up from 44.42 billion yuan in the same quarter a year before.

In the fourth quarter of 2019, Xiaomi’s net profit was RMB 2.3 billion ($320 million), up 26.5% YoY. Refinitiv I/B/E/S had estimated Xiaomi’s Q4 2019 revenue to be $7.83 billion and the net income at $264 million, it told TechCrunch.

For the whole of 2019, Xiaomi’s profit dropped by about 26% to RMB 10.04 billion ($1.4 billion).

Xiaomi said its cash reserves had improved and it planned to continue to invest in international regions such as India, its biggest overseas market. Xiaomi executives said on a conference call with reporters that they hope that the 21-day lockdown imposed by New Delhi earlier this month to contain the spread of the coronavirus outbreak, which has put an absolute halt to purchase of non-essential goods, would “show signs of recovery” in two to three months.

The No. 2 smartphone maker in China said overseas demand for its products will “undoubtedly” be affected by the coronavirus outbreak, but it currently believes the impact is manageable. It cautioned, however, that its advertisement business could be potentially impacted if its customers decrease their budgets. Xiaomi said its production was already up to 80% to 90% of its capacity.

Xiaomi said the gross profit margin from the smartphone business, its biggest revenue source, had increased from 6.1% in Q4 2018 to 7.8% in Q4 2019. The company’s Android-based MIUI operating system now has 309.6 million monthly active users, up from 292 million in September last year. Of the 309.6 million MIUI users, 109 million live in mainland China, it said.

“Despite headwinds from the Sino-US trade war and global economic downturn, Xiaomi stood out in 2019 with a commendable set of results as our revenue exceeded RMB200 billion for the first time,” said Lei Jun, Xiaomi founder and chief executive.

“While the entire world is still under the dark shadows of COVID-19, we have maintained our keen focus on efficiency to tide over this economic ‘black swan’ with everyone. At Xiaomi, we firmly believe that our long-term business success is underpinned by technological innovations, and to that effect, we plan to invest RMB50.0 billion in the next five years, as we relentlessly focus on technological innovation and user experience to grow our loyal Mi Fan base,” he added.