Xiaomi Corporation (“Xiaomi” or the “Group”; stock code:1810), an internet company with smartphone and smart hardware connected by an Internet of Things (“IoT”) platform at its core, announced its unaudited consolidated results for the three months ending on March 31, 2021.
In the first quarter of 2021, Xiaomi’s total revenue and adjusted net profit far-exceeded market expectation. Total revenue for the period amounted to RMB76.9 billion (MYR49.9 billion), representing an increase of 54.7% year-over-year while adjusted net profit for the period came in at RMB6.1 billion (MYR3.9 billion), an increase of 163.8% year-over-year.
Q1 2021 financial highlights:
- Total revenue at RMB76.9 billion (MYR49.9 billion), up 54.7% YoY;
- Gross profit at approximately RMB14.2 billion (MYR9.2 billion), up 87.4% YoY;
- Non-IFRS adjusted net profit was RMB6.1 billion (MYR3.9 billion), up 163.8% YoY.
Xiaomi Corporation said, “During the first quarter of 2021, both our total revenue and adjusted net profit reached record highs in the quarter, demonstrating the robustness of our business model and the strong execution of our strategies. The strong growth of smartphone shipments drove a continued expansion of our global user base. Our Artificial Intelligence of Things (AIoT) platform has continued to scale in tandem across the world. Besides the solid growth in our existing business lines, we are also continuing to explore new opportunities and broadening our business horizon. In March 2021, we unveiled our new branding identity and also announced our official foray into the smart electric vehicle business, setting the course for an exciting journey that will ensure a bright future for the company in the coming decade.”
Quarterly Performance Review
Global smartphone shipments maintained top three position as Xiaomi continued to enhance its competitiveness in the premium smartphone market; achieves No. 1 spot in Malaysia (Canalys)
In the first quarter of 2021, Xiaomi’s smartphone business continued to grow significantly. Revenue from smartphone sales grew by 69.8% to RMB51.5 billion (MYR33.4 billion) year-over-year. Global smartphone shipments in the period reached 49.4 million units and the gross profit margin for the smartphone business was 12.9%. According to Canalys, the Group maintained 3rd position in terms of smartphone shipments globally during the quarter, registering a market share of 14.1%
Xiaomi’s smartphone business in mainland China has also maintained its rapid growth trajectory. According to Canalys, in the first quarter of 2021, Xiaomi rose to the 4th position winning a market share of 14.6%. The Group further strengthened its market position across online channels. According to third-party data, Xiaomi’s online smartphone market share in mainland China jumped to 38.0% in the first quarter of 2021 from 18.5% in the first quarter of 2020. Meanwhile, it also expanded offline retail presence in mainland China. As of April 30, 2021, the number of our retail stores surpassed 5,500, an increase of over 2,300 stores from December 31, 2020.
This enriched premium product portfolio has underpinned Xiaomi’s robust growth in the premium smartphone market. In the first quarter of the year, global shipments of the Group’s smartphones with retail prices at or above RMB3,000 (MYR1,947) in mainland China and EUR300 (MYR1,515) or equivalent in overseas markets exceeded 4 million units. In addition, according to third-party data, Xiaomi’s market share for smartphones with prices between RMB4,000 (MYR2,596) and RMB6,000 (MYR3,895) in mainland China increased to 16.1% in the first quarter of 2021 from 5.5% in the first quarter of 2020.
In Malaysia, Xiaomi was the top smartphone brand (sell-in shipments) for the first quarter of 2021 for the first time, according to Canalys, with 28% market share and 319% annual growth.
Outstanding performance underpinned by “Smartphone × AIoT” strategy
In the first quarter of 2021, the Group’s core strategy of “Smartphone × AIoT” continued to underpin its outstanding performance. IoT and lifestyle products segment witnessed strong performance with revenue increasing 40.5% year-over-year to RMB18.2 billion (MYR11.8 billion).
In the first quarter of 2021, global shipments of Xiaomi’s smart TVs reached 2.6 million units. According to All View Cloud (“AVC”), the Group’s TV shipments ranked No. 1 in mainland China for the 9th consecutive quarter and remained top five globally. In addition, our large-screen smart TVs continued to gain widespread acclaim within the market. According to AVC, Xiaomi and Redmi TVs continued to rank No. 1 by retail sales volume in the over 70-inch TV market in mainland China, with a market share of 29.0%, as retail sales volume increased over 160.0% year-over-year.
The Group’s IoT and lifestyle product segment also continued on its rapid growth trajectory in overseas markets. Revenue from IoT and lifestyle products in overseas markets increased by 81.1% year-over-year in the quarter. The Group’s electric scooters, air purifiers, Mi Box and other products maintained their widespread popularity.
Xiaomi continued to scale up AIoT platform. As of March 31, 2021, the number of connected IoT devices (excluding smartphones and laptops) on its AIoT platform reached 351.1 million units. The number of users with five or more devices connected to our AIoT platform (excluding smartphones and laptops) reached 6.8 million, representing a year-over-year increase of 48.9%. In March 2021, AI Assistant (“小愛同學”) had 93.0 million MAU, and the MAU of Mi Home App reached 49.2 million, representing a year-over-year increase of 22.8%.
Internet user base continued to expand; advertising revenue reached another quarterly record high
The Group’s internet services segment continued its solid growth as revenue grew 11.4% year-over-year to RMB6.6 (MYR 4.3 billion) billion in the first quarter of 2021. The gross profit margin of internet services segment reached 72.4% in the quarter. Advertising revenue reached another quarterly record high of RMB3.9 billion (MYR2.5 billion), representing an increase of 46.3% year-over-year.
Xiaomi’s global internet user base has continued to expand rapidly. In March 2021, the MAU of MIUI increased by 28.6% year-over-year to 425.3 million while the MAU of MIUI in mainland China rose to 118.6 million, representing a year-over-year increase of 6.4% and a net gain of 7.7 million users from December 2020. As the Group broaden its TV internet service offerings and reached a larger use base, MAU of smart TVs and Mi Box increased over 34.0% year-over-year in the quarter. Meanwhile, supported by the continuous growth of paid subscribers of TV internet services, the number of TV paid subscribers increased 8.2% year-over-year to 4.7 million as of March 31, 2021.
Overseas internet services revenue increased 50.0% year-over-year to RMB0.9 billion (MYR0.6 billion). Our internet user base continued to expand in key overseas markets, with MAU of MIUI increasing 95.5% year-over-year in Western Europe. Going forward, the Group will further diversify overseas internet service offerings and enhance user experience while driving growth in overseas internet services business.
Overseas markets maintain growth momentum achieving explosive growth across Europe
In the first quarter of 2021, Xiaomi’s revenue from overseas markets increased 50.6% year-over-year to RMB37.4 billion (MYR24.3 billion). According to Canalys, Xiaomi’s market share in the first quarter ranked among the top five smartphone companies in terms of shipments in 62 countries and regions globally, and No.1 in 12 countries and regions.
Xiaomi further improved its competitive positioning in key markets. According to Canalys, in the first quarter of 2021, the Group was ranked among the top two for the first time in Europe following an 85.1% year-over-year increase in smartphone shipments allowing us to retain a market share of 22.7%.
Notably, Xiaomi was ranked No. 1 in Eastern Europe for the 2nd consecutive quarter as smartphone shipments increased 81.8% year-over-year to reach 32.5% market share. Xiaomi was also ranked No. 1 for the first time in Russia with a market share of 32.1%.
The Group retained its top 3 position in Western Europe as market share rising to 16.6% following an 89.3% year-over-year increase in smartphone shipments. The Group was ranked No. 1 in Spain for the 5th consecutive quarter after achieving a 35.1% market share. Additionally, Xiaomi’s market position rose to No. 2 in Italy and it retained the No. 3 spot in Germany and France and entering the top 5 in the U.K. for the first time, all with growth rate in shipments exceeding 90% year-over-year. Moreover, Xiaomi was ranked No. 1 for the 14th consecutive quarter in India in terms of smartphone shipments where it has a market share of 28.3%
The Group continued its strong growth momentum in new markets. According to Canalys, its position in Latin America rose to No. 3 as smartphone shipments increased 161.7% year-over-year to reach a 11.5% market share. Additionally, Xiaomi ranked No. 3 in the Middle East as smartphone shipments increased 87.8% year-over-year. Meanwhile, Xiaomi attained the No. 4 spot in Africa as smartphone shipments increased 191.0% year-over-year.
As of March 31, 2021, Xiaomi has also established cooperation with over 150 carrier channels (including carrier subsidiaries) worldwide.
Technology innovation as the cornerstone for a better life
Xiaomi’s relentless pursuit of cutting-edge technology and innovation forms the bedrock of the Group’s development and growth. In the first quarter of 2021, the Group recorded RMB3.0 billion (MYR1.9 billion) in research and development expenses representing a year-over-year increase of 61.0%. The Group enables elevated endurance, super-fast charging capabilities and more solid product performance. These innovations are a testament to its continuous efforts to explore and push the boundaries of technological innovation. Moving forward, the Group will remain committed to ramping up R&D investments and recruiting global technological talents to relentlessly pursue innovation in core technologies as well as smart manufacturing.