Xiaomi growth outshined by Huawei
The company managed to improve its gross margins despite smartphone revenues dropped
Stocks impacted: Xiaomi Corp. (1810.HK)
Chinese smartphone maker posted the slowest quarterly revenue growth in its history during the third quarter. Tis is mainly due to generally lower sales in the domestic smartphone market. Also, growth rate was affected by Huawei, as this larger rival continued to increase its market share. At the same time, the world's fourth-largest handset maker by shipment expanded outside China, with total revenues abroad increasing by over 17% CNY 26.1 billion. By the way, Xiaomi’s international business accounted for 48.7 percent of revenues in the third quarter. Meanwhile, revenues for the period were up 5.5% from a year earlier, to CNY 53.7 billion. Smartphone revenues dipped 7.8% but the company managed to improve its gross margins and continued to grow its services business. Net profit was 2.53 billion yuan compared with CNY2.50 billion in Q3 2018. As a reminder, Xiaomi launched a first 5G device in September, and the group’s average selling price was up 4.6% in China during the quarter. The company’s shares added 1.28% on Wednesday and could extend gains in the near term as the results still look positive in general.
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