(Yicai) Nov. 19 -- Xiaomi said profit rose 9.7 percent in the third quarter from a year ago after handset prices and shipments rose. The Chinese electronics giant also raised its annual delivery target for electric vehicles for the third time this year.

Net profit was CNY5.3 billion (USD732.5 million) in the three months ended Sept. 30, the Beijing-based company said in a financial report released yesterday. Revenue surged 31 percent to CNY92.5 billion (USD12.8 billion).

Adjusted net profit rose 4.4 percent to CNY6.3 billion. The net loss from its innovative businesses, such as smart electric vehicles, shrank to CNY1.5 billion from CNY1.8 billion in the prior quarter.

Higher costs shrank Xiaomi’s gross profit margin to 20.4 percent from 22.7 percent a year earlier, weighing on profit growth, the company said. The phone segment’s GPM narrowed to 11.7 percent from 16.6 percent. 

The mobile phone business fluctuated in the quarter, mainly because of higher memory module costs and the impact of the product release cycle on GPM, President Lu Weibin said during Xiaomi’s earnings conference call. The phone business’ GPM is in a controllable range now and will likely grow this quarter, he noted.

Xiaomi is known mainly for smartphones and other electronic products, but has also diversified into other areas, including most notably electric vehicles. Its venture into EV design and production, the firm’s biggest recent development, is also one of the most widely watched.

Xiaomi has raised its annual EV delivery target to 130,000 units from 120,000, Lu said, adding that deliveries topped 20,000 last month and will likely exceed that again this month. It delivered 39,790 of its first EV, the SU7, in the third quarter, having produced 100,000 as of Nov. 13.

Despite the higher earnings and EV shipments, Xiaomi’s shares [HKG: 1810] finished 1.7 percent lower at HKD28.30 (USD3.64) each today, while the broader Hong Kong market gained 0.4 percent. The stock has soared more than 80 percent since the end of last year.

Net profit climbed 5.3 percent last quarter from the prior one, adjusted net profit rose 1.2 percent, and revenue gained 4.1 percent.

Editors: Xu Wei, Martin Kadiev