Xiaomi Smartphone Demand Rebounds, Q1 Revenue and Profit Beat Estimates

Joanna Estrada
May 22, 2020

With revenues of $830 million, a year-on-year increase of 38.6%, the division accounts for 11.6% of total revenues, up from 10.1% in Q4 2020 and 9.9% in Q3 2020.

Xiaomi can't shrug off China's shrinking phone market though.

Total first quarter sales to local consumers were down nearly a fifth on the year. While volumes slowed due to the coronavirus outbreak, the company managed to improve its average selling price thanks a greater focus on premium 5G models and continued expansion in Europe. The company said production in mainland China has largely resumed, and smartphone demand has rebounded quickly.

Xiaomi founder and CEO Lei Jun attends a product launch event in Beijing a year ago. Shares of the Chinese tech company are roughly 15% up year to date. Learn more about day trading in the stock market.

Xiaomi's hawkish statement was in contrast to its worldwide competitors like Samsung and Apple.

The Covid-19 outbreak led to a slowdown in sales in China during the quarter and pushed global revenues to 50 percent of Xiaomi's sales for the first time. China smartphone sales plunged 18% during the quarter as the pandemic reached its peak there in February and March, according to IDC.

At £5.72 billion, Xiaomi's Q1 sales were reported significantly stronger than £5.04 billion in the same quarter past year. By comparison, other major rivals like Huawei are still highly dependent for their sales on China - the world's biggest smartphone market. The company's smartphone business, accounting for about 60% of its total sales, rose 12.3% in revenue terms and by a smaller 4.7% in terms of units sold during the quarter, indicating it was getting more money for each smartphone.

Although there was a dip in performance during the third quarter, which could be attributed to a slowdown in smartphone shipments in its Chinese domestic market, Xiaomi is a company which has been on the rise.

According to Canalys, Xiaomi saw an over 25% year over year decline in its shipments to consumers in China in Q1.

Its second key market India has been affected by lockdown restrictions since late March, but the country is starting to show similar signs of recovery since early May, Xiaomi said.

At the time of writing, Xiaomi is valued at £23.68 billion and has a price to earnings ratio of 28.62.

Other reports by Click Lancashire

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