Xiaomi Corp (XIACF) Q3 2024 Earnings Call Highlights: Robust Revenue Growth and Strategic Expansion

GuruFocus News
4 min read

In This Article:

  • Total Revenue: RMB92.5 billion, up 30.5%.

  • Handset IoT Core Business Revenue: RMB82.8 billion, up 16.8%.

  • Gross Margin: 20.4% overall; Handset gross margin at 11.7%; IoT gross margin at 20.8%.

  • Net Profit (Adjusted): RMB6.3 billion, up 4.4%.

  • Smart Handset Revenue: RMB47.5 billion, up 13.9%.

  • IoT and Home Appliance Revenue: RMB26.1 billion, up 26.3%.

  • Internet Service Revenue: RMB8.5 billion, up 9.1%.

  • Innovative Business Revenue: RMB9.7 billion, with smart vehicles contributing RMB9.5 billion.

  • Cash Reserve: RMB151.6 billion, up 18.7%.

  • Offline Retail Shops: Exceeded 13,000, expected to exceed 15,000 by year-end.

  • Global Active Users: 686 million, with 168 million in Mainland China.

  • Vehicle Business Delivery: SU7 delivery volume at 39,790 units.

Release Date: November 18, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Xiaomi Corp (XIACF) reported a total revenue of RMB92.5 billion for Q3 2024, marking a 30.5% increase year-over-year.

  • The company's handset IoT core business revenue reached RMB82.8 billion, up 16.8%, with a healthy gross margin of 20.8%.

  • Xiaomi's premiumization strategy is showing success, with the Xiaomi 15 series achieving strong sales and increased market share in the high-end segment.

  • The home appliance and IoT business saw a revenue increase of 20% to RMB26.1 billion, driven by innovative products and a focus on energy conservation.

  • Xiaomi's global active user base reached 686 million, with significant growth in overseas markets, contributing to a 9.1% increase in internet service revenue.

Negative Points

  • Despite the revenue growth, Xiaomi's innovative business segment, including smart vehicles, reported a net loss of RMB1.5 billion.

  • The company faces fierce competition in the small screen handset market, with competitors launching similar products.

  • Xiaomi's automobile business, while growing, requires significant investment in R&D and expansion of sales networks, impacting short-term profitability.

  • The company's expansion into offline retail with plans to open 20,000 shops by 2025 involves substantial costs and logistical challenges.

  • Xiaomi's premiumization efforts, while successful domestically, face challenges in replicating the same success in international markets due to varying consumer preferences and competitive pressures.

Q & A Highlights

Q: Can you share the future plans for Xiaomi's home appliances and the reasons behind the improved IoT gross margin? Also, what are the expectations for SG&A and R&D expenses in the automobile segment for 2025? A: The growth in home appliances is just beginning, with innovations in air conditioners and washing machines driving premium offerings. We plan to strengthen upstream capabilities and expand sales channels. The IoT gross margin improvement is due to better product offerings and efficiencies. For the automobile segment, economies of scale and high efficiency are key, and we will continue investing in R&D to support future growth.

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