(Yicai Global) March 23 -- Chinese smartphone giant Xiaomi said it has increased its investment in upstream and downstream companies over the past year, profiting from the sale of shares of businesses that have gone public and benefiting from tech synergy. 

By the end of last year, the Beijing-based company had invested in over 390 companies, with a total book value of CNY60.3 billion (USD9.5 billion), a yearly rise of 25.7 percent. 

Xiaomi disclosed the data in its annual earnings report issued yesterday. In 2021, it made a net profit of CNY3.3 billion (USD517.9 million) from disposal of investments, adding that as well as financial gains the investment program has brought business synergy that has boosted the development of its smart manufacturing. 

The net amount of cash that Xiaomi used in investment-related activities last year rose to CNY45 billion (USD7.1 billion), more than double the level in 2020. The company said this was possible as it raised nearly USD3.1 billion via the private placement of shares at the end of 2020. 

A number of companies backed by Xiaomi have successfully gone public or are preparing for listings, Yicai Global learned. Roborock Technology [SHA:688169], a maker of cleaning robotics, went public on Shanghai’s Star market in February 2020. Xiaomi made CNY1.7 billion from selling shares in the company in the second quarter of last year.  

Companies that are preparing to list include water purifier firm Deerma Technology, personal care consumer electronics maker Soocas Technology, and chip designer Dioo Microcircuits. Backing from Xiaomi has hugely boosted the performance of these firms, Yicai Global also learned.  

Xiaomi’s net profit fell 5.1 percent to CNY19.3 billion (about USD3.0 billion) last year due to changes in the fair value of investment income, but revenue surged 34 percent from 2020 to reach CNY328.3 billion (USD51.6 billion).

The Hong Kong-listed shares of Xiaomi [HKG: 1810] closed up 4.1 percent at HKD14.78 (USD1.89) today. 

Editors: Dou Shicong, Tom Litting