Smartphone maker Xiaomi says China sales already close to full recovery (updated)

Sky Blue 11

31/03/2020 12:47

* Xiaomi says sales in China rebounding strongly after
coronavirus
    * Smartphone revenue up 23% in Q4, hits 30.8 billion yuan
    * Net income hits 2.34 billion yuan, beating estimates 
    * Full-year profit attributable to shareholders falls by 25%

 (Adds background, context, additional figures)
    SHANGHAI, March 31 (Reuters) - Chinese smartphone maker
Xiaomi Corp  1810.HK  said on Tuesday that it was already seeing
signs of a strong recovery in sales in China as the country
begins to return to normal following the lockdown due to the
coronavirus.
    "The (Chinese) market has entered a full recovery stage, and
the market has already recovered to 80 to 90% of the normal
level," CFO Shou Zi Chew said on an earnings call.
    He said sales in China fell in the first quarter due to the
economic impact of the virus, but did not say by how much.
    Chew said he expected demand for smartphones to be resilient
globally even though the coronavirus was spreading to other
countries. The company will take a hit in global sales during
March and April, he said, but he expects to see signs of
recovery in May.
    "If we take reference from China's experience, I think
smartphone demand is resilient," said Chew. "It is a daily
necessity in life. I think it will rebound quickly."
    Xiaomi reported on Tuesday a 27% jump in revenue for
October-December 2019, above analyst expectations.
    Sales in the fourth quarter jumped to 56.5 billion yuan ($8
billion) from 44.42 billion yuan in the same quarter a year
earlier. That beat analyst expectations of 55.6 billion yuan,
according to Refinitiv data.
    The company derives roughly 60% of its revenue selling
mobile handsets and also sells online ads and other types of
consumer hardware. 
    Revenue from the smartphones' segment jumped 23% in the
fourth quarter to 30.8 billion yuan. 
    Excluding one-time items, Xiaomi earned 2.34 billion yuan in
the fourth quarter, above analysts' estimate of 1.88 billion
yuan.
    For the whole year, Xiaomi's profit attributable to
shareholders fell by a fourth to 10.04 billion yuan. 
    Bigger rival Huawei reported an annual profit increase of
5.6% on Tuesday, its smallest rise in three years, hurt by weak
overseas sales amid an intensifying U.S. campaign to restrict
its global expansion due to security concerns.  urn:newsml:reuters.com:*:nL4N2BO1M7
    Overseas expansion has been a key strategy for Xiaomi in the
past few years, along with its Chinese rivals, as the domestic
smartphone market endured a period of contraction.

 (Reporting by Josh Horwitz, editing by Louise Heavens and Susan
Fenton)
 ((Josh.Horwitz@thomsonreuters.com; +86 21 20830007;))