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Xiaomi's net profit in the first quarter slashed China's monthly smartphone sales are lower than the same period a decade ago

via:凤凰网     time:2022/5/19 23:04:43     readed:209


On May 19, Xiaomi Group released its first quarter results for 2022. According to the financial report, Xiaomi Group's revenue in the first quarter was 73.35 billion yuan, down 4.6% year-on-year; the loss during the period was 531 million yuan, compared with a profit of 7.789 billion yuan in the same period last year; and the adjusted net profit was 2.86 billion yuan, down 52.9% year-on-year.

The reason why Xiaomi's profit performance has dropped sharply is mainly for two reasons.

On the one hand, Xiaomi's smartphone business revenue in the first quarter was 45.8 billion yuan, a year-on-year decrease of 11.1%; smartphone shipments also decreased by 22.1% from 49.04 million units in the first quarter of 2021 to 38.5 million units in the first quarter of 2022. On the other hand, Xiaomi lost about 3.55 billion yuan due to fair value changes due to investment in the first quarter, compared with a profit of 2.063 billion yuan in the same period last year.

"In the first quarter, the epidemic in Hong Kong and Shanghai caused many of Xiaomi's offline stores to be shut down. At the same time, the epidemic has also had an impact on users' consumption desire and logistics and transportation, resulting in a decline in Xiaomi's smartphone sales. Wang Xiang, partner and president of Xiaomi Group, said at the earnings report that the external factors affecting the first quarter will improve in the second quarter, and there is still uncertainty, and Xiaomi will remain observant. However, there will be significant improvements on the supply side, and Xiaomi will maintain close communication with partners at any time.

As of the close of trading on May 19, Xiaomi was trading at HK$11.08 per share, down 4.97%.

The mobile phone business is declining, and the crisis of Chinese stocks has affected investment

In the first quarter of 2022, Xiaomi sold more than 20% fewer mobile phones than the same period last year.

Xiaomi explained in its earnings report that the continuous shortage of core components supply, the recurrence of the new crown epidemic and the global macroeconomic environment have had a greater impact on the demand and supply of the overall smartphone market. According to Canalys data, in the first quarter of 2022, the shipments of the Chinese mainland smartphone market fell by 18.2% year-on-year, and Xiaomi's smartphone shipments in the mainland market fell to fifth place, with a market share of 13.9%.

On the earnings call, Wang Xiang, partner president of Xiaomi Group, said that Xiaomi's mid-to-high-end smart phones accounted for more than 50% of shipments in Chinese mainland offline channels. The epidemic has had an impact on Xiaomi's production, sales, logistics, and offline stores, and Xiaomi's costs and expenses have increased. At the same time, the shortage of low-end chips in the first quarter was very serious, which also affected mobile phone sales to a certain extent.

However, the good online channels and high-end strategy have partially alleviated the decline of Xiaomi's mobile phone business.

According to third-party data, xiaomi's market share of online smartphone channel shipments in Chinese mainland 2022 was 32.3%, ranking first.

At the same time, according to Canalys data, Xiaomi's high-end smartphones priced at RMB 3,000 or more and overseas prices of 300 euros or more Chinese mainland have nearly 4 million units shipped worldwide, and ASP (average selling price of smartphones) increased by 14.1% year-on-year. According to third-party data, in the first quarter of 2022, Xiaomi ranked first among Android smartphone manufacturers in the smartphone market share of the Chinese mainland price range of 4,000 yuan to 6,000 yuan.

It is worth noting that in addition to the decline in mobile phone sales, the sluggish market performance of Chinese stocks in the first quarter is also the main reason for Xiaomi's operating performance.


In the first quarter, the change in the fair value of Xiaomi's investments included in the profit and loss at fair value changed from a gain of 2.1 billion yuan in the first quarter of 2021 to a loss of 3.6 billion yuan, mainly due to the fair value loss generated by the listed equity investment in the first quarter of 2022. Among them, it is mainly the two companies invested by Xiaomi, Kingsoft Cloud and iQiyi, which drag down Xiaomi's overall investment performance.

Based on market capitalization during the first quarter, Kingsoft Cloud and iQiyi lost a total of about $1.298 billion.

The mobile phone industry as a whole goes back a decade

In fact, the decline in mobile phone sales is not limited to Xiaomi.

One verifiable data is that according to CINNO Research, the overall sales volume of China's smartphone market fell by more than 20% year-on-year in February. OPPO, Vivo and Xiaomi fell by 45.7%, 38.6% and 20.1% respectively year-on-year.

On May 16, the China Academy of Information and Communications Technology released a report saying that from January to March, the overall shipment of mobile phones in the domestic market was 69.346 million units, down 29.2% year-on-year. Smartphones, which accounted for about 98% of mobile phone shipments in the same period, also recorded a basically consistent decline.

Similarly, according to Wind's data, in March 2022, the domestic mobile phone market shipped 21.46 million units, down 40.5% year-on-year. If you pull this statistical caliber back to ten years ago, you will find that in March 2012, the domestic mobile phone market shipped 39.586 million units. This means that the overall shipment level of the domestic mobile phone industry is now lower than the same period level ten years ago.


Industry analyst agency IDC data shows that from 2017 to 2020, China's smartphone market shipments fell by 4.9%, 10.5%, 7.8% and 11.2% consecutively, and only achieved 1.1% growth in 2021.

The market generally believes that the reason for this phenomenon is mainly due to the overall macro environment and the impact of the epidemic, resulting in the overall consumer sentiment of the current smartphone market. Data from the National Bureau of Statistics also show that the total retail sales of consumer goods in April fell by 11.1% year-on-year and 0.69% month-on-month, of which retail sales of goods fell by 9.7% year-on-year.

As a result, mobile phone manufacturers have begun to cut orders to the upstream supply chain. Guo Mingxi, an apple analyst at Tianfeng Securities, revealed, "At present, from high-end to low-end brands are cutting orders, and the mobile phone industry is undergoing structural adjustments." "The 2022 shipment plans of China's major Android mobile phone brands have so far cut about 170 million orders (accounting for 20% of the original shipment plan in 2022).

It is conceivable that if the external uncertainties cannot be significantly improved in the second quarter, Xiaomi, including the mobile phone industry as a whole, will further enter a longer downward cycle.

(Author |.) Rao Xiangyu)

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