Financial Data and Key Metrics - Revenue for Q1 2024 reached JPY75.5 billion, a 27% year-on-year growth [5] - Adjusted net profit was JPY6.5 billion, a 100.8% year-on-year increase [5] - Gross profit margin grew to 20.3% [5] - Cash resources stood at JPY127.3 billion [5] - Core profit achieved new highs [5] Business Line Data and Key Metrics - Smartphone business accounted for 61% of total revenue, with a 3.6% year-on-year growth [13] - IoT business revenue was JPY20.4 billion, up 21% year-on-year, with gross margin improving to 19.9% [14] - Internet services revenue reached JPY8 billion, a 45% year-on-year increase [15] - Overseas Internet business grew by 40%, contributing RMB2.5 billion [15] Market Data and Key Metrics - In the Middle East, market share grew by 7.1% to 20.9% [6] - Africa market share reached 10.6%, up 4.5% [6] - Southeast Asia market share was 16.5%, while Latin America reached 15.3%, up 2% [6] - Xiaomi ranked top three in 63 countries and top five in 67 markets [5] Company Strategy and Industry Competition - Xiaomi EV business launched successfully, with over 7,500 deliveries in April and 10,000 by mid-April [7] - The company plans to expand Xiaomi Home stores to 20,000 by 2026 [10] - Premiumization strategy in Mainland China has been completed, targeting the 4,000 to 5,000 market sector [10] - Xiaomi aims to achieve 100% renewable power usage by 2035 and carbon neutrality by 2040 [16] Management Commentary on Operating Environment and Future Outlook - Despite external uncertainties, Xiaomi's business remains stable and efficient [4] - The company is confident in overcoming challenges such as rising core component costs [12] - Xiaomi expects to deliver excellent results in 2024 due to improved capabilities [12] Other Important Information - Xiaomi repurchased RMB2.25 billion worth of shares, exceeding the total for 2023 [15] - The company has set ESG targets, including 30% reduction in emissions by 2030 and 100% renewable energy usage by 2035 [16] Q&A Session Summary Question: Synergy between EV, smartphone, and IoT businesses [20] - Xiaomi leverages its experience in consumer electronics and technology to enhance EV business [21] - The company focuses on customer stickiness and ecosystem integration to drive synergies [22] Question: Smartphone gross margin and cost control [23] - Xiaomi manages cost pressures through strategic inventory management and product structure optimization [24] - The company's scale and efficiency help mitigate the impact of rising component costs [25] Question: New retail expansion and overseas Internet business growth [27] - Xiaomi plans to expand its retail stores to 20,000 by 2026, focusing on upgrading existing stores and improving efficiency [28] - Overseas Internet business growth is driven by increased shipments and new customer acquisitions [33] Question: IoT gross margin and overseas expansion [35] - Xiaomi's IoT strategy focuses on self-research and product optimization, leading to improved gross margins [36] - The company plans to expand IoT products globally, focusing on compliance and market matching [39] Question: EV business delivery challenges and gross margin [41] - Xiaomi faces delivery challenges due to high demand, with delivery times extending to 30 weeks [42] - The company aims to double productivity by June to meet delivery targets [43] - Gross margin for EV business is expected to be between 5% to 10%, with more accurate targets to be set in Q2 [60] Question: Smartphone premiumization and inventory levels [45] - Xiaomi's premiumization strategy has shown success, with market share growth in the 5,000 to 6,000 price segment [46] - Inventory growth is attributed to strategic stocking, founder edition EV production, and preparation for peak seasons [47] Question: Middle East market growth and AI strategy [49] - Xiaomi's Middle East market grew by 113.3%, driven by strategic adjustments and human resource optimization [50] - The company focuses on AI integration in products and manufacturing efficiency, with plans to leverage AI for future growth [55] Question: IoT channel strategies in North America and Japan [57] - Xiaomi's IoT strategy in overseas markets focuses on cost efficiency and value for money, leveraging its own network and local platforms [58]
XIAOMI(XIACY) - 2024 Q1 - Earnings Call Transcript