Xiaomi overseas sales have returned to pre-pandemic levels, its acting CFO said on Wednesday, as it announced profit had more than doubled in the second quarter on the back of strong growth in its high-end smartphone business.
Revenue rose 3.1 percent in the quarter ending June 30, while sales rose to CNY 53.54 billion (roughly Rs. 57,738 crores), beating analysts' expectations. Revenue was up from CNY 51.95 billion (roughly Rs. 56,085 crores) in the same period a year earlier.
Overall revenue from the company's smartphones business, which accounts for nearly two-thirds of its revenue, fell 1.2 percent to CNY 31.6 billion (roughly Rs. 34,109 crores). Xiaomi sold 28.3 million handsets in the quarter, down from 32.1 million units a year earlier.
However, sales of premium phones in overseas markets were up by 99.2 percent year on year, with average selling prices rising 11.8 percent in that period.
"This shows our smartphones have achieved a major breakthrough in Q2," Wang Xiang, Xiaomi's acting CFO, said on the earnings call.
The company's high-end phone saw "explosive growth" in Europe, where smartphone shipments were up by 64.9 percent, Wang said.
Profit rose 129.8 percent to CNY 4.49 billion (roughly Rs. 4,847 crores).
Xiaomi reported an adjusted net profit of CNY 3.37 billion (roughly Rs. 3,637 crores), beating the average market estimate of CNY 2.24 billion (roughly Rs. 2,417 crores), according to Refinitiv data.
Xiaomi has relied increasingly on overseas markets such as India to boost growth as it struggles with competition from Huawei, the market leader in China.
The company's revenue from overseas markets grew 10 percent year on year in the second quarter, accounting for 44.9 percent of its total revenue.
While sales in India started to recover as its lockdown was gradually lifted during the second quarter, production constraints have dragged on sales, Wang said. The number of new smartphone activations in July was still 72 percent of pre-pandemic levels, he said.
Xiaomi has also found itself caught in a backlash against Chinese tech firms in India, where the government last month banned several mobile apps from a range of Chinese companies, including two from Xiaomi.
Wang said Xiaomi remained confident in the India market, saying the company would continue "to promote the mutual understanding and trust between people in India and China."
© Thomson Reuters 2020
Which are the best truly wireless earphones under Rs. 10,000? We discussed this on Orbital, our weekly technology podcast, which you can subscribe to via Apple Podcasts, Google Podcasts, or RSS, download the episode, or just hit the play button below.