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Can Xiaomi's net income increase by 70%? Can Xiaomi be bullish?

$XIAOMI-W (01810.HK)$On March 22, 2022, Xiaomi Group announced its full-year performance for 2021. Despite facing numerous challenges in the global economy, Xiaomi achieved stable growth throughout the year with its resilient business model. In 2021, Xiaomi Group's total revenue reached RMB 328.3 billion, a year-on-year increase of 33.5%. Adjusted net income reached RMB 22 billion, a year-on-year increase of 69.5%.

During the reporting period, Xiaomi continued to deepen its presence in the global market. In 2021, Xiaomi's global smartphone shipments and market share reached a historic high, with global smartphone shipments reaching 0.19 billion units, a year-on-year increase of 30.0%. According to Canalys, in terms of smartphone shipments, Xiaomi ranked first in 14 global markets and top five in 62 global markets, ranking second in the European market. Overseas internet services and overseas IoT business maintained rapid growth momentum.

Can Xiaomi's net income increase by 70%? Can Xiaomi be bullish?


Thanks to its leading advantage in the Internet of Things and a large user base, Xiaomi's smart TV achieved counter trend growth in the global TV market in 2021, with global shipments reaching 12.3 million units. According to AVC Cloud, Xiaomi TV has maintained its position as the number one in China and top five globally for three consecutive years.

The most significant feeling from Xiaomi's financial report this time is that it is not easy. How should we analyze and determine Xiaomi's financial report and future?

Can Xiaomi's net income increase by 70%? Can Xiaomi be bullish?


First of all, the real performance is the most valued thing in the capital market. Previously, we repeatedly mentioned that for the current capital market, it does not believe in tears or stories. The only thing it believes in is the real performance. Therefore, we have seen that since the beginning of this year, as long as major technology stocks can present good performance, the capital market will provide positive feedback. However, once the performance is not good, no matter how dazzling your story is, the capital market's performance will be very poor. This can be said to be a major trend in the current capital market. Therefore, under such a background, Xiaomi's outstanding profit performance undoubtedly gives confidence to the capital market.
Can Xiaomi's net income increase by 70%? Can Xiaomi be bullish?



Secondly, let's take a look at the current overall development of Xiaomi's smartphones, which is actually quite good. Xiaomi's smartphones, as its core business, have developed a comprehensive advantage in the field of smartphones over these years. Especially in overseas markets, Xiaomi has established a continuous advantage in the smartphone industry. Therefore, in such a context, the global shipment of over 24 million units is undoubtedly an important manifestation of Xiaomi's high-end development. As Xiaomi's main line of business, smartphones are definitely worthy of our attention.

Thirdly, from the perspective of long-term market development, Xiaomi's ecosystem has gradually formed. Whether it is Xiaomi's current development or its future car business, it is actually a process of continuous advancement based on Xiaomi's ecological chain. This is a very important market development direction for Xiaomi. We can say that Xiaomi's ecosystem has built a major market advantage.

Can Xiaomi's net income increase by 70%? Can Xiaomi be bullish?


Fourthly, a very important point for Xiaomi this time is its software business. What does the term "software business" mean? We can see that Xiaomi's user scale expansion is very clear, and its internet commercialization capability is constantly strengthening. Xiaomi's internet business revenue has reached 28.2 billion, which is undoubtedly not easy. We know that the reason why Apple has had such good development in recent years is because it has leveraged its internet business in the process of its own business development, and obtained a strong market moat. Xiaomi is undoubtedly also building its own moat, which may be the biggest highlight of Xiaomi at present.
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