The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
Bloomberg
Xiaomi Corp’s shares leapt 11.4% after inroads into the Chinese market for high-end smartphones and strong
growth overseas helped the company report better-than-expected profit.
The stock climbed its most in two years in Hong Kong, taking its 2020 gains to 98% last week. The Chinese smartphone maker more than doubled net income to 4.49 billion yuan ($716 million) in the June quarter, beating the highest analyst estimate. Sales increased 3.1% to 53.5 billion yuan. Xiaomi’s overseas business has recovered to pre-Covid-19 levels, acting Chief Financial Officer Wang Xiang said.
“Driven by a favourable competitive landscape, aggressive building of sales channels,
increased R&D with strong product competitiveness, and continued adoption of 5G in China and overseas market (Europe) in 2021, we expect strong value share gains starting 2H20,†Bocom International analysts
including Chris Yim wrote in a report. Bocom, Morgan Stanley, CICC and Citigroup were among brokerages that lifted their price targets for Xiaomi’s stock.
Smartphone shipments in European countries like France and Spain grew by 64.9% in the quarter, propelling Xiaomi into the No. 3 spot in the region for the first time, the company said, citing consultancy Canalys. The phonemaker also kept its top position in India in the quarter even though the country’s smartphone shipments halved during lockdown measures. That drove a 12% fall in the company’s device shipments globally, according to IDC, just when tensions between Delhi and Beijing threatened to depress sales in its biggest foreign market.
Xiaomi may be able to offset some of the hit through higher-margin phones and market share gains against biggest competitor Huawei Technologies, which is struggling to sustain smartphone output because of US curbs on its in-house chip design and supply. Xiaomi shipped 28.3 million smartphones during the quarter, with average selling prices increasing 11.8% from a year earlier, reflecting inroads into premium devices.