Shulou(Shulou.com)11/24 Report--

On the afternoon of August 29, Xiaomi Group today released its results for the second quarter of 2023 ending June 30: revenue of 67.35 billion yuan, market expectations of 65.13 billion yuan, 70.17 billion yuan in the same period last year, down 4% from the same period last year; second-quarter net profit of 3.67 billion yuan, estimated at 3.16 billion yuan, up 168.5% from the same period last year; and adjusted net profit of 5.14 billion yuan under non-international financial reporting standards, an increase of 147% over the same period last year.

After the release of the results, Xiaomi Group partner and President Lu Weibing, Vice President and CFO Lin Shiwei and other senior executives attended the subsequent earnings conference call to interpret the main points of the results and answered questions from several reporters.

The following is a transcript of the reporter's question-and-answer session in this conference call:

Xinhuanet reporter: from the financial report released today, we can see that Xiaomi's income still declined in the second quarter, but the decline narrowed, the adjusted net profit doubled compared with the same period last year, and the profit also improved significantly. Boss Lu, can you summarize for us how Xiaomi got this report card? In addition, could you ask the management to share the business expectations for the future with us?

Lu Weibing: as I said at the beginning, under the premise that there is no substantial improvement in the external environment, in fact, Xiaomi's business performance has undergone a "qualitative change" (I think), mainly due to some internal changes. that is, our ability has improved.

To sum up. First, our strategic adjustment is particularly timely. In 2022, we put forward the idea of "stable operation" and made it clear that we should attach equal importance to scale and profit. In fact, this puts forward very high requirements for our operation, because Xiaomi's development in the past has always been based on the "scale first" development strategy.

Second, in addition to having a good strategy, we also need to implement it. We can look at it through several indicators: the first is the gross profit margin, in fact, the gross profit margin especially reflects the real industrial capacity of an enterprise. If the industrial capacity is strong, the gross profit margin is high; secondly, the expense rate reflects the operating capacity of an enterprise. Sometimes people will find that the gross profit margin goes up and the expense rate goes up, but this time we see that after Xiaomi's gross profit margin has gone up, we are particularly competitive. It can be said that behind these indicators is the improvement of our ability.

And behind the improvement of ability, there are several strategic main lines of Xiaomi. The first main line, we are firmly committed to research and development. When it was particularly difficult last year, it was actually quite difficult inside Xiaomi last year, but Mr. Lei always told us that "the more difficult it is, the more determined it is to invest in the future and research and development."

We have seen a series of new products launched by us this year, in fact, the technology has changed. Our technology has changed from "catching up and following" in the past to gradually "leading" it now. I believe members can clearly see this.

The second main line, we firmly do high-end. In my opinion, high-end technology and investment in technology should complement each other, so in terms of high-end technology, I think you have seen some very great changes in Xiaomi this year. Xiaomi's high-end transformation is not only done in China, in fact, it is also being done overseas, which has led to the improvement of our overall ASP (average sales price) and gross profit margin.

The third main line, we have been constantly doing management upgrades. It can be said that in the past few years, or every year, we have had one or two large-scale special changes. These special management changes can constantly consolidate Xiaomi's overall organizational capacity.

These are some of the most important things we have done in the past few years. In addition, we can also see the improvement of our gross profit margin or the improvement of operating results, not only in mobile phones, our IoT gross profit margin has actually reached a very high level in history. In other words, compared with the past, the balanced development of our business has been greatly improved.

You can see that Xiaomi's wearable business can basically rank first in China; our TV business continues to be No. 1 in China; the flat panel business that restarted two years ago is now in third place; Xiaomi air conditioners are much better than the market; refrigerator sales are more than double that of last year. So as you can see, we are not just a category in the outbreak, all categories are actually in the outbreak. This also shows that our overall ability is relatively balanced.

Based on the future, I don't think there will be much change. It is enough to continue to adhere to the strategic direction and capacity building set in the past. I believe the key is to "keep doing it". Personally, I think Xiaomi still has a lot of abilities and management skills that can be released. I am also very confident that the change in Xiaomi's operating performance will not be a quarterly change, but a continuous change. Thank you here for your continued attention to us.

Welcome to subscribe "Shulou Technology Information " to get latest news, interesting things and hot topics in the IT industry, and controls the hottest and latest Internet news, technology news and IT industry trends.