Chinese smartphone maker Xiaomi reported first-quarter revenue growth of 55 percent on Wednesday, exceeding analyst expectations as it nabbed market share from one-time sector leader Huawei.
Revenue rose to CNY 76.88 billion (roughly Rs. 87,570 crores) in the quarter ended March 31, from CN Y 49.70 billion (roughly Rs. 56,620 crores) a year earlier. Analysts expected revenue of CNY 74.5 billion (roughly Rs. 84,870 crores), according to Refinitiv data.
Adjusted net profit rose to CNY 6.1 billion (roughly Rs. 6,950 crores), versus market estimates of CNY 3.97 billion (roughly Rs. 4,520 crores).
Xiaomi's share of the smartphone market in China increased 75 percent year-on-year in the quarter ended late March, according to research firm Canalys, as Huawei retreated from the market following US trade restrictions that crimped its ability to source key components for its handsets.
Revenue from smartphone sales jumped 69.8 percent year-over-year to CNY 51.5 billion (roughly Rs. 58,670 crores), while revenue from Internet services increased 11.4 percent to CNY 6.6 billion (roughly Rs. 7,520 crores).
Despite the revenue growth, Xiaomi and other electronics brands remain hampered by the global chip shortage.
A number of causes such as stockpiling, surging demand for personal computers during COVID-19, and mishaps at factories caused a range of hardware makers to scramble for semiconductors late last year.
Still, on a call with investors, Xiaomi CFO Alain Lam said the company's chip inventories remained at "healthy" levels and he did not expect a major impact on business this year, though the broader shortage may not end until mid-way through 2022.
Executives also added the company intends to double the number of offline retail stores it has in China, from roughly 5,000 at present to over 10,000.
In India, meanwhile, one of its key overseas markets, the company will invest more in online sales as the government imposes strict lockdowns due to a surge in COVID-19 cases.
This quarter, Xiaomi also announced it would formally begin producing electric cars, with a new division to be led by Xiaomi founder Lei Jun.
The US government also removed the company from a blacklist that would have barred US-based investors from owning shares in the company, reversing one of former US President Donald Trump's last maneuvers against China's tech sector before he left office.
© Thomson Reuters 2021