Xiaomi's second-quarter net profit rose by 20%, exceeding expectations. It first disclosed revenue from electric vehicles with 27,000 SU7 deliveries

Xiaomi (01810) recorded an adjusted net profit of 6.2 billion yuan in the second quarter of this year, an increase of 20% year-on-year, higher than the estimated 4.9 billion yuan; revenue increased by 32% year-on-year to 88.9 billion yuan, also exceeding expectations. Xiaomi disclosed its automotive-related performance for the first time, with revenue from smart electric vehicles in the last quarter reaching 6.2 billion yuan, delivering a total of approximately 27,300 new Xiaomi SU7 series cars at an average price of about 228,600 yuan.

Starting from the second quarter of this year, Xiaomi has updated its business segments, with performance presented in two segments: "Mobile Phones x AIoT" and "Innovative Businesses such as Smart Electric Vehicles." "Mobile Phones x AIoT" includes smart phones, IoT (Internet of Things) and lifestyle consumer products, internet services, and other related businesses. "Innovative Businesses such as Smart Electric Vehicles" include smart electric vehicles and other related businesses.

Automotive Business Records Loss of 1.8 Billion, Expected to Narrow in the Future

Since the launch of the Xiaomi SU7 at the end of March this year, sales have been impressive. According to performance disclosures, revenue from innovative businesses such as smart electric vehicles reached 6.4 billion yuan in the last quarter, with smart electric vehicle revenue accounting for 6.2 billion yuan and a segment gross profit margin of 15.4%. However, the segment's adjusted net loss was 1.8 billion yuan. Xiaomi Group CEO Lu Weibing stated that Xiaomi's automotive business is still in its early stages, with losses mainly attributed to three reasons: Xiaomi's automotive scale is still relatively small, and the automotive industry requires economies of scale; significant investment is needed for the first car model, which will take time to digest; and the Xiaomi SU7 is a pure electric sedan, resulting in higher costs.

Lu Weibing added that with the increase in Xiaomi's automotive scale, capacity expansion, and improved delivery capabilities, he believes that the losses in Xiaomi's automotive business will further narrow. He emphasized that the second quarter of this year was the first quarter of performance for Xiaomi's automotive business, expressing confidence in future new orders, deliveries, and gross margin improvements for Xiaomi's automotive business.

Smartphone Shipments Increase by 28%, Average Selling Price Decreases

In the "Mobile Phones x AIoT" business segment, revenue in the last quarter increased by 22.5% year-on-year to 82.5 billion yuan, with a segment gross profit margin of 21.1%. Smartphone revenue reached 46.5 billion yuan, up by 27.1% from the same period last year; due to increased competition and rising prices of core components, the gross profit margin decreased by 1.2 percentage points to 12.1%. Xiaomi's smartphone shipments in the last quarter increased by 28.1% year-on-year to 422 million units; the average selling price decreased from 1,112.2 yuan in the same period last year to 1,103.5 yuan, attributed to intensified competition in the domestic market and increased sales volume in lower-priced emerging markets.

Revenue from IoT and lifestyle consumer products reached 26.8 billion yuan, up by 20.3% year-on-year, benefiting from increased revenue from smart home appliances in the domestic market, overseas tablets, and global wearable products. Internet service revenue increased by 11% year-on-year to 8.3 billion yuan.

In response to the increased research and development expenses related to innovative businesses such as smart electric vehicles, Xiaomi's R&D expenses in the last quarter reached 5.5 billion yuan, an increase of 20.7% from the same period last year. Sales and marketing expenses also increased by 31.8% year-on-year to 5.9 billion yuan