After hours on May 19, 2022, Xiaomi group (1810. HK) released the financial report for the first quarter of 2022, with a revenue of 73.352 billion yuan; The adjusted net profit was 2.859 billion yuan. This is a performance that does not look very bright. Under the influence of objective factors such as the shortage of core parts, the repeated COVID-19 and the international turmoil, the decline of Xiaomi's revenue and net profit is in line with market expectations. Due to the bad situation in the early stage, after the disclosure of Xiaomi Q1 financial report, the share price rose 6% the next day, with a turnover of HK $1.535 billion.
Compared with the short-term performance fluctuation of Xiaomi, the market pays more attention to the long-term value transmitted by this financial report. The day after the release of the financial report, 42 analysts from Bloomberg gave Xiaomi a "buy" rating
Although the mobile phone business is still the most important business of Xiaomi for a long time, Xiaomi does not want to define itself as a mobile phone manufacturer. At the same time, it also wants to become a service provider in the fields of smart home integration, artificial intelligence, Internet of things and so on.
This is Xiaomi's "yangmou", which obtains customers through the sales of mobile phones and other hardware. In Lei Jun's words, it is to "make a friend", and then realize it through the sales of Internet services, IOT and consumer goods.
On Xiaomi's performance and future expectations in this quarter, Hu Qimu, chief researcher of Sinosteel Economic Research Institute, and many other industry experts said in an interview with Phoenix technology that Xiaomi's main business income has not changed much, and there are many growth highlights in high-end strategy, aiot and overseas business, short-term fluctuations do not affect the long-term value**
Xiaomi's high-end strategy has achieved remarkable results
Xiaomi's revenue is mainly divided into three parts, namely smart phones, IOT and consumer goods, and Internet services. In the first quarter of 2022, Xiaomi's total revenue reached 73.4 billion yuan. From the perspective of revenue structure, the proportion of these three large businesses has not changed much. The revenue of smartphone business is 45.8 billion yuan, and the proportion of revenue is still more than 60%.
However, Xiaomi's smartphone business is under pressure. In the first quarter of 2021, Xiaomi's smartphone shipment was 49.4 million units, while in the first quarter of 2022, Xiaomi's smartphone shipment was only 38.5 million units, more than 10 million units less than the previous quarter, a year-on-year decrease of 22.1%.
In this regard, Liu Jingzhao, an analyst of the overseas team of CSC, told Phoenix technology that Xiaomi's mobile phone business was under pressure in the first quarter, which was more affected by objective factors such as low-end chip gap, European geopolitics and repeated domestic epidemics .
At the earnings call, Wang Xiang, President of Xiaomi group, also said that the epidemic had an impact on Xiaomi's production, sales, logistics and offline stores. At the same time, there was a shortage of low-end chips in the first quarter, which also affected mobile phone sales to a certain extent. Wang Xiang revealed that the supply gap of mobile phones caused by the lack of low-end chips is about 10 million.
*The sluggish mobile phone market is a common problem in the industry *. According to canalys data, in the first quarter of 2022, global smartphone shipments reached 311.2 million units, a year-on-year decrease of 11%. The performance of the smart phone market in Chinese Mainland continued to lag behind the global market, with only 75.6 million units shipped, down 18% year-on-year and 13% month on month.
Not only the mobile phone market, but also the whole consumer market has been affected by the short-term impact of the epidemic, and consumer demand has decreased significantly. Fu Jiaqi, a statistician of the trade and Foreign Economic Department of the National Bureau of statistics, said that the expansion of residents' consumption scale and the upgrading of consumption structure will not change. With the effectiveness of epidemic prevention and control, consumer demand will continue to release, the consumer market is expected to continue to recover its growth trend .
Although the domestic market environment is bleak, Xiaomi's mobile phone business benefits from the high-end strategy and the strength of overseas markets, offsetting the decline in revenue caused by the supply gap of low-end phones.
Hu Qimu, chief researcher of Sinosteel Economic Research Institute, told fenghuang.com that although the repeated epidemic and the situation in Europe have disrupted the mobile phone supply chain, increased costs and suppressed shipments, Xiaomi has not hurt its muscles and bones, and its main business income has not changed much .
*In terms of market share, Xiaomi's mobile phone business is basically stable *. Canalys data show that in the first quarter of 2022, Xiaomi mobile phone ranked the third in the world and the top five in the domestic market.
Xiaomi's high-end strategy has also begun to show results The global shipments of high-end smartphones priced at more than 3000 yuan in China and more than 300 euros in foreign countries were nearly 4 million, directly driving the year-on-year growth of 14.1% of ASP. In the smartphone market share in the price range of 4000-6000 yuan, it ranked first among Android smartphone manufacturers.
On May 23, Xiaomi officially announced in-depth cooperation with Leica, a famous German camera brand, and said that they would be committed to the exploration of mobile imaging. They said that the two sides would focus on technology and R & D teams to jointly explore breakthrough and innovative solutions in the mobile field. This is also Xiaomi's effort in mobile photography again after the establishment of mobile film studio. The accumulation of Xiaomi image in hardware over the years has reached a certain height. This strategic cooperation with Leica can be said to be a further "critical moment" of Xiaomi's high-end strategy.
Xiaomi's core competitiveness is ecology
Compared with the pressure on the mobile phone business, Xiaomi's IOT and consumer goods grew well in the first quarter. In the first quarter, the revenue of Xiaomi IOT and consumer goods business was 19.477 billion yuan, a year-on-year increase of 6.8%, accounting for 26.6% of the overall revenue, with a gross profit margin of 15.6%, the highest in the history of a single quarter .
*Hu Qimu, chief researcher of Sinosteel Economic Research Institute, told Phoenix Technology that global mobile phone shipments have been declining since 2016, and there is not much room for growth in this market. The increment must come from Xiaomi's Internet of things ecology and new retail *.
"In fact, all mobile phone brands should follow this route in the future. Because in the era of Internet of things, mobile phones are only one of terminals, the Internet integration and service capability behind smart terminals is the core competitiveness of enterprises ." Hu Qimu said, "the picture of the industrial chain in the field of Internet of things is very broad. From hardware such as chips, sensors and intelligent terminals, to software such as systems and platforms, and then to integrated services, many enterprises only do some of them, while Xiaomi is one of the few enterprises with ecological ability."
Xiaomi's core competitiveness lies in ecology On the one hand, Xiaomi's ecological chain is open, free to come and go, and full of competition. It has established a market-oriented elimination mechanism to ensure the continuous improvement of the product power of ecological partners; On the other hand, the unique advantages of Xiaomi business model enable partners to empower each other, save losses in all links through intensive expenditure, with strong economies of scale .
Since 2018, in order to adapt to the rapid development of IOT industry, Xiaomi has proposed "Ai + IOT", "all in IOT" to "mobile + aiot" and then "mobile x aiot".
In Lei Jun's plan, the core business of mobile phones and the ecological layout of aiot are "equations that can cause mass energy conversion". Mobile phone has always been the core business of Xiaomi, which is related to the success or failure of Xiaomi's business and the cornerstone of Xiaomi's business model. And "mobile phone" × The core strategy of "aiot" emphasizes the multiplication effect, making aiot ecology become the catalyst and combustion promoter of mobile phone business and the moat of Xiaomi business model.
From the perspective of industry prospect, the core driving force of IOT is closely related to the change of social consumption structure. As the post-90s and post-00s enter the society and move towards family life, the age group of social consumption structure has changed. The consumption concept driven by these young people will drive the rise of a number of IOT industries.
Liu Jingzhao, an analyst of CSCI's overseas team, believes that the long-term development of IOT industry has two directions: one is 2B, such as deeper cooperation with hotels, shopping malls and real estate companies; The other is the whole house intelligence. Now young people are more and more looking forward to the whole house intelligent hardware products with central control. Driven by these two directions, IOT industry has long-term and sustainable growth capacity .
Liu Jingzhao analyzed, "In the short term, IOT industry will be very flexible and fresh blood will pour in continuously; but in the medium and long term, with the continuous maturity of technology, the importance of ecology will be reflected. For example, we will continue to add smart home in our home, but we certainly don't want to install an app for floor sweeping robot, air conditioner and washing machine respectively, but prefer to be controlled uniformly through a central control platform. These small household appliance enterprises must join in the end Into an ecosystem . At present, there are few enterprises that can do ecology, only a few such as Xiaomi, Huawei and Baidu. "
Thanks to the collaborative strategy between mobile phones and aiot, as of March 31, 2022, the number of Xiaomi aiot connected devices (excluding smartphones, tablets and laptops) reached 478 million, a year-on-year increase of 36.2%. The number of users with five or more devices connected to Xiaomi aiot platform reached 9.5 million, a year-on-year increase of 38.7%. In March 2022, the number of monthly live users of Xiaoai classmate increased by 23.9% year-on-year to 115 million, and the number of monthly live users of Mijia app increased by 33.8% year-on-year to 65.8 million.
Around smart phones, Xiaomi's aiot business can build a more perfect smart life experience, which are the most imaginative parts of Xiaomi's future development
The number of monthly active users of MIUI exceeded 500 million, with a year-on-year increase of 100 million
Xiaomi's biggest advantage is that it occupies the hardware traffic entrance. As major Internet companies respond to the new policies on data security and personal information protection, the online advertising business has been affected by rectification. However, Xiaomi has achieved a wave of rapid growth by virtue of hardware advantages and counter attack, which shows how solid the hardware foundation of Xiaomi is**
According to the financial report, Xiaomi's Internet service business maintained stable growth. In the first quarter, Xiaomi's Internet service revenue reached 7.113 billion yuan, a year-on-year increase of 8.2%, accounting for 9.7% of the overall revenue, an increase of 1.2% over the same period in 2021.
It is noteworthy that the growth of Xiaomi's overseas Internet business is the fastest. In Q1 2022, Xiaomi's overseas Internet business revenue reached RMB 1.6 billion, a year-on-year increase of 71.1%, and its proportion in the overall Internet service revenue continued to rise to 21.9%, a record high.
Fu Jinhua, a macroeconomic researcher at the China Economic Digital Economy Research Center, told Phoenix technology that Xiaomi's overseas business is bound to exceed its domestic business in the future. The orderly expansion of overseas markets can not only meet the needs of the optimization and upgrading of domestic industrial structure, but also open up the demand of high-quality users to increase the blue ocean, open up the customization of high-end Internet service products in Europe, and establish mobile phones, advertising and game business lines in Southeast Asia and Latin America. Xiaomi's international business product line will become more and more clear.
In addition, by March 2022, the number of global MIUI monthly active users of Xiaomi had reached 529 million, a year-on-year increase of 104 million . The number of monthly active users of MIUI in Chinese Mainland was 136million, an increase of 17million year-on-year. The number of monthly active users of MIUI in mainland China has increased month on month for six consecutive quarters.