Xiaomi: This year's mobile phone shipments or more than 200 million units, the progress of the car business exceeded expectations

On March 22, Xiaomi Group (1810. HK, Xiaomi Group-W) announces its full-year results for 2021.

From the data point of view, Xiaomi handed over a good answer sheet last year, and the rapid growth of its net profit became the focus of attention from the outside world: last year, the total revenue of Xiaomi Group reached 328.3 billion yuan, an increase of 33.5% year-on-year, and the market expected 326.3 billion yuan; pre-tax profit was 24.4 billion yuan, and the adjusted net profit reached 22 billion yuan, an increase of 69.5% year-on-year, and the market expected 21.7 billion yuan.

In the fourth quarter of 2021, Xiaomi's total revenue reached 85.6 billion yuan, an increase of 21.4% year-on-year, and the market expected to be 81.797 billion yuan; in the fourth quarter of 2021, the pre-tax profit was 3.9 billion yuan, and the market was expected to be 4.232 billion yuan. Adjusted net profit reached RMB4.5 billion, up 39.6% year-on-year.

On March 22, Xiaomi closed at HK$14.2, up more than 6%. On the day of the earnings report, Xiaomi CEO Lei Jun tweeted that he would continue to work the road of exploring hardcore technology.

Xiaomi President: The challenge of out-of-stock is still there, but this year's mobile phone shipments may exceed 200 million units

From the perspective of revenue structure, Xiaomi's revenue is mainly divided into four parts: smart phones, IoT and consumer products, Internet services and other businesses.

From the analysis of its main business smartphones, xiaomi smartphone global shipments and market share in 2021 hit a record high, last year's smartphone revenue reached 208.9 billion yuan, an increase of 37.2% year-on-year; global shipments reached 190 million units, an increase of 30% year-on-year.

According to Canalys data, in terms of smartphone shipments, Xiaomi's smartphone shipments ranked third in the world in 2021, with a market share of 14.1%, and the fastest year-on-year growth rate among the top five smartphone manufacturers in the world.

At the same time, according to the surging news reporter, Xiaomi's net profit growth last year performed better, which is related to the initial results of its high-end strategy. According to the financial report, last year, Xiaomi's global shipments of high-end smartphones priced at 3,000 yuan or more in Chinese mainland and overseas prices of 300 euros or more exceeded 24 million units, doubling the growth of the whole year of 2020.

In terms of shipments, the proportion of Xiaomi's high-end smartphones has increased from about 7% in 2020 to about 13%. Among them, the shipment of high-end smartphones priced at 300 euros or more abroad increased by more than 160% year-on-year.

In the subsequent conference call, Wang Xiang, president of Xiaomi Group, said that from the perspective of supply, geopolitical uncertainties and risks still exist, and the supply situation in the first quarter is the least optimistic, but it will improve after the second quarter of this year. He also said that this year's mobile phone shipments may exceed 200 million units.

However, the financial report also shows that although the adjusted net profit in the fourth quarter of last year increased by a large year-on-year, the operating profit and profit during the period declined year-on-year. In this regard, Xiaomi CFO Lin Shiwei explained that this is due to the volatility caused by investment. According to the financial report, Xiaomi's investment income decreased by 44.9% from 7 billion yuan in the fourth quarter of 2020 to 3.9 billion yuan in the fourth quarter of 2021, mainly due to the decrease in fair value gains on unlisted investments in the fourth quarter of 2021. "The volatility is short-term and overall our investments have been very successful."

Overseas revenue is close to 50% of total revenue, and it will continue to exert efforts

It is worth noting that Xiaomi's financial report shows that the company's overseas revenue has approached 50% of the total revenue.

Last year, Xiaomi's overseas market revenue reached 163.6 billion yuan, an increase of 33.7% year-on-year, accounting for 49.8% of the total revenue. In the fourth quarter of 2021, Xiaomi's overseas market revenue reached 41.6 billion yuan, an increase of 23.4% year-on-year, accounting for 48.7% of total revenue.

In the conference call, Lin Shiwei said that Xiaomi's smartphone channel capabilities in overseas markets have been further enhanced. In 2021, Xiaomi's overseas market operator channels (excluding India, Sri Lanka, Nepal and Bangladesh markets) shipped more than 25 million smartphones, an increase of more than 120% year-on-year. Among them, Xiaomi's carrier channel market share in Europe increased from 7.9% in 2020 to 16.8% in 2021.

Wang Xiang said that in the future, xiaomi still has a lot of room for growth in overseas markets, including Europe, Latin America and the Asia-Pacific market, which have great potential. "I still see a lot of growth opportunities in the global market, of course, we have to pay attention to the risks and challenges that may be brought about by the shortage of stocks."

The car business exceeded expectations

It is worth noting that in the financial report, Xiaomi said that since the announcement of the car-making plan in March 2021, Xiaomi's smart electric vehicle business has progressed more than expected. Up to now, the scale of the automotive business R&D team has exceeded 1,000 people, and it will continue to expand R&D in core areas such as autonomous driving and intelligent cockpit in the future; it is expected to be officially mass-produced in the first half of 2024.

In the subsequent conference call, Wang Xiang emphasized the statement that "the car-making business exceeded expectations", saying that the current progress is very smooth, and said that the progress of the car-making business is the focus of all employees of Xiaomi Group. However, he declined to disclose more information about the statement that "the Xiaomi Automobile Engineering prototype will be unveiled in the third quarter".

Xiaomi CEO Lei Jun has invested a lot of energy in building cars. Public information shows that Lei Jun has successively withdrawn from the positions of legal representative, executive director or chairman of a number of Xiaomi affiliated companies. In this regard, Xiaomi once responded that the reason for Lei Jun's withdrawal from the directors of affiliated companies is to focus on building cars, and executives can already share some of the relevant work and responsibilities.

In the next five years, we will continue to increase investment in research and development

Xiaomi's advertising revenue still maintains rapid growth.

Last year, Xiaomi's advertising business revenue reached 18.1 billion yuan, a year-on-year growth rate of 42.3%, the financial report said, mainly due to the continuous expansion of user scale, the proportion of high-end mobile phones and the enhancement of commercialization capabilities.

In the fourth quarter of 2021, advertising revenue reached 4.9 billion yuan, an increase of 34.0% year-on-year, of which overseas Internet revenue was RMB1.6 billion, an increase of 79.5% year-on-year, accounting for 21.5% of Internet service revenue, and its proportion continued to increase.

From the perspective of active users, in December 2021, the number of monthly active users of Xiaomi's global MIUI reached 508.9 million, an increase of 28.4% year-on-year, and the number of new monthly active users of MIUI in 2021 reached 112.5 million.

While advertising revenue is increasing, Xiaomi emphasizes R&D investment. In 2021, Xiaomi's R&D expenditure reached RMB13.2 billion, an increase of 42.3% year-on-year. The five-year compound growth rate from 2017 to the present is 43%. Xiaomi said that it will continue to increase investment in research and development in the next five years, and it is expected to exceed 100 billion yuan. In 2019, Xiaomi has built a Yizhuang smart factory with an annual output of one million ultra-high-end mobile phones. This was followed by the establishment of a second smart factory in Changping, which is scheduled to be put into operation by the end of 2023.

In terms of talent incentives, Xiao also said that it has issued a million dollar award for three consecutive years, and in 2021, it also launched the "Young Engineer Incentive Plan", with more than 700 young engineers receiving a total of 16.042 million shares.