Xiaomi Corporation (“Xiaomi” or the “Group”; stock code:1810), an internet company with smartphone and smart hardware connected by an Internet of Things (“IoT”) platform at its core, announced its audited consolidated results for the year ending on December 31, 2020.
In 2020, Xiaomi’s total revenue for the year amounted to RMB245.9 billion, representing an increase of 19.4% year-over-year; adjusted net profit for the year was RMB13.0 billion, representing an increase of 12.8% year-over-year, exceeding market expectations. In the fourth quarter of 2020, the Group’s revenue amounted to RMB70.5 billion representing an increase of 24.8% year-over-year; adjusted net profit was RMB3.2 billion representing an increase of 36.7% year-over-year.
2020 Financial Highlights:
• Total revenue was approximately RMB245.9 billion, up 19.4% YoY;
• Gross profit was approximately RMB36.8 billion, up 28.7% YoY;
• Non-IFRS adjusted net profit was RMB13.0 billion, up 12.8% YoY, beating market consensus;
• Earnings per share was RMB0.849.
4Q2020 Financial Highlights
• Total revenue at historical quarterly high of approximately RMB70.5 billion, up 24.8% YoY;
• Gross profit at approximately RMB11.3 billion, up 44.4% YoY;
• Non-IFRS adjusted net profit was RMB3.2 billion, up 36.7% YoY.
Xiaomi Corporation said, “In 2020, our global business recovered from the impact of the COVID-19 pandemic and maintained steady growth. Since the outbreak of COVID-19, Xiaomi collaborated closely with upstream and downstream business partners to accelerate the resumption of work and production. During the pandemic, our products and services have helped people enrich their lives and stay connected, and demand for our products has remained healthy. Due to the easing of lockdown restrictions in major markets during the second half of 2020, our business performance has managed to stage an impressive rebound. We continued to execute our “Smartphone × AIoT” (AI + IoT) strategy and our solid performance for the year demonstrates the resilience and competitiveness of our business model.”
Annual Performance Review
Further solidified strong position in the premium smartphone market
In 2020, Xiaomi’s smartphone revenue amounted to RMB152.2 billion for the year, representing an increase of 24.6% year-over-year. In 2020, the Group’s global smartphone shipments totalled 146.4 million units, an increase of 17.5% year-over-year. In the fourth quarter of 2020, smartphone revenue amounted to RMB42.6 billion, representing an increase of 38.4% year-over-year. In the quarter, the Group’s global smartphone shipments reached 42.3 million units, representing a year-over-year increase of 29.7%. According to Canalys, in the fourth quarter of 2020, Xiaomi continued to rank 3rd globally in terms of smartphone shipments with a market share of 12.1% and achieved the highest year-over-year growth among the top five smartphone companies globally.
The Group’s smartphone business grew significantly in mainland China. According to Canalys, in the fourth quarter of 2020, smartphone shipments in mainland China market increased by 51.9% year-over-year, achieving the highest year-over-year growth among the top five smartphone companies. Xiaomi’s mainland China market share climbed to 14.6% in the fourth quarter of 2020 from 9.2% in the fourth quarter of 2019.
During the period, the Group continued to execute its dual brand strategy. In 2020, Xiaomi sold approximately 10 million premium smartphones globally with retail prices at or above RMB3,000 in mainland China and EUR300, or equivalent, in overseas markets. In December 2020, Mi 11’s debut achieved widespread popularity as shipments surpassed 1 million units in the first 21 days following its release. On the other hand, the Redmi brand remains committed to making advanced technology accessible to the mass market. Redmi Note 9 series has been well received by the market, selling more than 30 million units globally between its debut on March 12, 2020 and December 31, 2020.
Due to increased sales of premium smartphones, Xiaomi’s smartphone ASP increased by 6.1% to RMB1,040 in 2020 and by 6.8% to RMB1,009 in the fourth quarter of 2020, both on a year-over-year basis.
In the online channel, we further strengthened our market position. According to third-party data, our online smartphone market share in mainland China in terms of shipments increased from 18.5% in the first quarter of 2020 to 29.5% in the fourth quarter of 2020. During the Singles’ Day and the Double 12 Shopping Festivals in 2020, Xiaomi and Redmi brand smartphones together ranked 1st in sales volume among Android smartphones on Tmall.com, JD.com, and Suning.com.
Strengthened leading position in AIoT
In 2020, the Group vigorously propelled the “Smartphone × AIoT” strategy as revenue from IoT and lifestyle products segment reached RMB67.4 billion representing an increase of 8.6% year-over-year. In the fourth quarter of 2020, revenue from IoT and lifestyle products segment was RMB21.1 billion, representing an increase of 8.0% year-over-year.
In 2020, global shipments of Xiaomi’s smart TVs reached 12.0 million units ensuring the business maintained its leading position in the market. According to All View Cloud (“AVC”), in the fourth quarter of 2020, the Group’s TV shipments ranked No.1 in mainland China for the 8th consecutive quarter and ranked among the top five globally.
As a leader in the smart TV industry, Xiaomi has focused on strengthening our market position in the premium and ultra-large screen categories while expanding our global footprint. According to AVC, in the fourth quarter of 2020, Xiaomi and Redmi TVs ranked No.1 by retail sales volume in the over 70-inch TV market in mainland China, with a market share of 27.7%. In overseas markets, following the successful launch of our smart TVs in India, Indonesia and Russia, Xiaomi also introduced smart TVs to France, Poland and other key markets in 2020 as it further captured the large overseas market opportunity.
Xiaomi has devoted more resources to IoT products that enhance interconnectivity in the smart home and continued to introduce products that were well-received by the market. In 2020, global shipments of our AI speakers exceeded 10 million units while those of WiFi routers exceeded 15 million units. According to “IDC’s PRC Quarterly Smart Home Device Tracker, 2020 Q3,” in the third quarter of 2020, Xiaomi ranked among the top three in terms of shipments in mainland China across multiple smart device categories including air purifiers, robot vacuum cleaners, smart security cameras, and smart lighting.
Revenue from IoT and lifestyle products in overseas markets continued a strong growth trajectory. As of December 31, 2020, the Group have sold our IoT and lifestyle products in more than 80 countries and regions. Since the fourth quarter of 2020, Xiaomi has introduced a series of new products to overseas markets such as Mi Electric Scooter Pro 2 Mercedes-AMG Petronas F1 Team Edition. Going forward, the Group aims to strengthen its position in overseas markets and bring a wide range of cool and innovative products to global users. Leveraging its brand and distribution channels, Xiaomi aims to drive cross-selling between IoT products and smartphones and capture a greater share of the large overseas IoT market.
The Group continued to execute “Smartphone × AIoT” strategy building a global smart living ecosystem centered around smartphones. As of December 31, 2020, the number of connected IoT devices (excluding smartphones and laptops) on our AIoT platform reached 324.8 million units, representing a year-over-year increase of 38.0%. The number of users with five or more devices connected to our AIoT platform (excluding smartphones and laptops) reached 6.2 million representing a year-over-year increase of 52.9%. In December 2020, our AI Assistant (“小愛同學”) had 86.7 million MAU, an increase of 43.5% year-over-year and the MAU of our Mi Home App reached 45.0 million representing a year-over-year increase of 22.1%.
Internet business surges in profitability
In 2020, revenue from the Group’s internet services segment amounted to RMB23.8 billion representing an increase of 19.7% year-over-year. In the fourth quarter of 2020, revenue from internet services amounted to RMB6.2 billion representing an increase of 8.4% year-over-year.
In 2020, Xiaomi’s global internet user base continued to grow rapidly. In December 2020, the MAU of MIUI increased by 28.0% year-over-year to 396.3 million while the MAU of MIUI in mainland China reached 111.0 million. In January 2021, the MAU of MIUI in mainland China further climbed to 114.5 million as the Group’s mainland China smartphone shipments continued to grow. At the same time, TV internet users continued to expand rapidly. In December 2020, MAU of smart TVs and Mi Box reached 40.9 million representing an increase of 48.0% year-over-year. As of December 31, 2020, the number of paid TV subscribers increased by 14.4% year-over-year to 4.3 million.
In 2020, advertising revenue amounted to RMB12.7 billion representing an increase of 19.2% year-over-year. In the fourth quarter of 2020, advertising revenue reached a quarterly record high of RMB3.7 billion representing an increase of 23.1% year-over-year. Xiaomi will continue to place user experience as a top priority as it improves algorithms and content recommendations.
In the fourth quarter of 2020, overseas internet services revenue increased by 55.1% year-over-year to RMB0.9 billion, accounting for 14.1% of total internet services revenue. Xiaomi will continue to expand our overseas user base and enrich internet service offerings to drive growth in the overseas internet services business.
Further strengthened channel capabilities in overseas markets
In 2020, Xiaomi’s revenue from overseas markets increased 34.1% year-over-year to RMB122.4 billion, accounting for 49.8% of total revenue. In the fourth quarter of 2020, our revenue from overseas markets rose 27.6% to RMB33.8 billion, accounting for 47.9% of total revenue. As of December 31, 2020, the Group’s products have been sold in more than 100 countries and regions around the world. According to Canalys, Xiaomi ranked among the top five vendors in terms of smartphone shipments in 54 countries and regions globally in the fourth quarter of 2020.
Xiaomi continued to gain strong momentum in major markets around the world in 2020. According to Canalys, in the fourth quarter of 2020, Xiaomi ranked top 3 for the 3rd consecutive quarter in Europe in terms of smartphone shipments with a market share of 15.3%. The Group also ranked No.1 in Central and Eastern Europe for the first time as smartphone shipments increased 17.5% year-over-year to reach 24.7% market share. In Western Europe, Xiaomi retained a position among the top three smartphone companies as smartphone shipments increased 57.3% year-over-year, with a 10.9% market share. In particular, Xiaomi’s smartphone shipments in Spain ranked No.1 for the 4th consecutive quarter with a market share of 27%. Additionally, the Group’s smartphone shipments increased by 86.2% in France, by 61.6% in Italy and by 139.8% in Germany, all on a year-over-year basis in the fourth quarter of 2020.
In India, Xiaomi ranked No.1 for the 13th consecutive quarter in the fourth quarter of 2020 in terms of smartphone shipments, with a market share of 27.4%, according to Canalys. In the fourth quarter of 2020, the Group also experienced meaningful growth in other emerging markets. According to Canalys, Xiaomi’s smartphone shipments ranked 4th in Latin America in the fourth quarter of 2020, with a year-over-year growth of 215.4%. Market share in the region increased to 9.1% in the fourth quarter of 2020 from 2.7% in the same period of 2019. In the fourth quarter of 2020, smartphone shipments also attained a top 4 position in the Middle East and Africa.
In 2020, Xiaomi further strengthened channel capabilities in overseas markets. The Group sold more than 16.0 million smartphones via online channels in overseas markets excluding India, an increase of over 90.0% year-over-year. In addition, the Group shipped more than 9 million smartphones through carrier channels in overseas markets excluding India, an increase of over 380.0% year-over-year.
Stepped up investment in R&D
Technology innovation is the cornerstone for Xiaomi’s sustainable growth and the Group will never cease to pursue cutting-edge technologies. In January 2021, Xiaomi was listed among the “Top 100 Global Innovator” by Clarivate Analytics for the 3rd consecutive year. In January 2021, the Group was awarded the “2020 Xiaomi Million Dollar Technology Award” to the engineering teams that contributed to the development of 120W fast charging technology and MIUI privacy protection features, expressing our appreciation for and encouragement towards our engineering talents. In 2021, Xiaomi will continue to expand investments and recruit more engineers to strengthen research and development capabilities.
