Xiaomi Hits Two-Year High Despite Sluggish 2nd Quarter as Huawei Ban Could Boost Market Share(Yicai Global) Aug. 27 -- Xiaomi's slow profit growth in the second quarter failed to curb investor enthusiasm as the Chinese smartphone maker could benefit from the woes of domestic rival Huawei Technologies.
Xiaomi's stock price [HKG: 1810] soared 11.4 percent to close at HKD21.35 (USD2.75) today, the highest since July 2018, the month the Beijing-based company went public at an initial offering price of HKD17.
In mid-August, Morgan Stanley raised its target price for the tech company by 11 percent to HKD20, citing the potential for an expanding market share on the home turf as China's biggest phone seller Huawei is facing chip supply problems amid a US ban on it buying American technologies.
Xiaomi's net profit fell 7.2 percent to CNY3.4 billion (USD493.7 million) in the quarter ended June 30 from a year ago, it said in an earnings report published late yesterday. Revenue rose 2.9 percent to CNY53.5 billion (USD7.8 billion).
Overseas markets make up almost half of Xiaomi's revenue so the advancing pandemic was bad news. Smartphone sales abroad slid to 28.3 million units in the second quarter from 32.1 million a year earlier.
In April and May "several of our key markets implemented strict lockdown measures and our sales were greatly impacted," the firm said in the report.
Xiaomi's smartphone business accounted for 59.1 percent of total revenue, down from 61.6 percent a year earlier. The Internet of Things and lifestyle products had a 28.5 percent tally, falling from 28.8 percent. Internet services were the most resistant to the pandemic, rising to 11 percent from 8.8 percent.
Xiaomi has been giving special attention to India, its major overseas market, amid the Indian government's ban of nearly 60 Chinese apps, including ByteDance's TikTok, due to national security concerns.
Xiaomi will continue to provide products in India, value cooperation with Indian partners, and commit to promoting mutual understanding and trust between the peoples of the two countries, President Wang Xiang said on a recent teleconference.
Editor: Emmi Laine
