Xiaomi Corp. delivered a 68 per cent jump in quarterly sales in its maiden financial results report, as the Chinese smartphone giant makes strides overseas while fending off a challenge from local rivals such as Oppo.
The results -- its first since raising US$5.4 billion in an initial public offering -- could help Xiaomi get past an anti-climactic July debut. Net income came to 14.7 billion yuan (US$2.1 billion) in the three months ended June, as it revalued preferred stock after the IPO. That compares with a 12 billion yuan net loss a year earlier. Revenue climbed to 45.2 billion yuan, according to a company filing.
Xiaomi, which depends on smartphone sales to ramp up users for its suite of online services, is trying to couch itself as a high-growth internet company -- a narrative consistently touted by billionaire co-founder Lei Jun. The internet services business accounted for about 9 per cent of revenue in the quarter. That segment’s growth however is one reason it managed to price its IPO at multiples far higher than celebrated tech names such as Tencent Holdings Ltd. and Facebook Inc.
It’s now accelerating its global expansion amid stiffer competition at home. The company recently set up a manufacturing site in India and opened stores in countries such as France and Israel to bolster overseas sales.
“Xiaomi is rooted in an internet mindset,” CCB International analysts Ronnie Ho and Rocky Zhang wrote in a report ahead of the earnings release. “By leveraging its rapidly growing hardware ecosystem, Xiaomi can acquire users at a profit in contrast to global internet companies experiencing rising traffic acquisition costs.”
Xiaomi’s stock closed up about 1.6 per cent.