Xiaomi Made Profit in 1Q23, Despite Smartphone, Revenues Decline

Xiaomi Made Profit in 1Q23, Despite Smartphone, Revenues Decline
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Xiaomi recorded a double-digit drop in revenue in the first quarter of the year. Weak global smartphone demand, cutting shipments and ASPs, and sales declines across all business segments resulted in lower revenues.

Smartphone revenue fell 23.6% to CNY35 billion ($5 billion), and shipments 21.1% to 30.4 million units. Average sales price dropped 3.1% to CNY1,152, attributed to efforts to clear inventories in overseas markets, which was partially offset by an 18% domestic rise on premium models. Smartphone gross profit margin rose 3.1 percentage points to 11.2%, with total inventory falling 24.1% to CNY42.6 billion, its lowest in nine quarters.

Net profit of CNY4.2 billion compared with a loss of CNY530.7 million in 1Q22 was aided by a one-time gain on investments and cost cuts. Xiaomi registered a CNY1.1 billion charge related to its smart electric vehicle business. Revenue fell 18.9% to CNY59.5 billion. IoT and lifestyle product revenue fell 13.6% to CNY19.5 billion. Internet services revenue fell 1.2% to CNY7 billion. R&D expenses increased 17.7% to CNY4.1 billion, with the full-year total forecast to reach CNY20 billion.