Xiaomi has reassured investors with strong quarterly profits

China’s smartphone giant Xiaomi has reassured investors with strong quarterly profits after an unexpectedly difficult IPO in Hong Kong last month. The eight-year-old company, now valued at $55.7 billion, reported a net profit of Rmb14.6 billion ($2.1 billion) in the three months to the end of June, compared with a loss of Rmb7 billion in the previous three months. Xiaomi has had a rocky six months: it reported a $1 billion quarterly loss ahead of its IPO in June, and the IPO achieved a valuation of $54 billion, half the initial target of $100 billion. Shares subsequently fell below their IPO price… but have recovered over the past three days. Revenues rose 68 per cent year-on-year in the second quarter, helped by strong smartphone sales and increases in the average selling price of handsets… Over the past year, Xiaomi had expanded to Spain, Italy and France… International sales accounted for 36.3 per cent of revenues in the past quarter… Smartphones are Xiaomi’s largest business, accounting for roughly two-thirds of the group’s total Rmb45.2 billion in revenue in the past quarter. The remainder comes from smart devices and its internet services division.

 

Yuan Yang, Xinning Liu and Cat Rutter Pooley

 

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