Xiaomi Group-W (01810.HK) announced its performance for the three months and six months ending June 30, 2024 on August 21. In the second quarter of 2024, the group achieved significant growth in both revenue and profit once again. In the second quarter of 2024, Xiaomi Group's total revenue reached 88.9 billion yuan, hitting a historical high, with a year-on-year growth of 32.0%. By business segment, in the second quarter of 2024, the group's 'Phone x AIoT' segment revenue was 82.5 billion yuan, and the revenue from the 'Smart Electric Vehicle and Other Innovative Businesses' segment was 6.4 billion yuan. In the second quarter of 2024, the group's adjusted net profit was 6.2 billion yuan, a 20.1% year-on-year increase, including an adjusted net loss of 1.8 billion yuan for the Smart Electric Vehicle and Other Innovative Businesses.

The group continues to advance the 'Mobility, Vehicles, and Home Ecosystem' group strategy. In the second quarter of 2024, the group's global smartphone shipments reached 42.2 million units, a 28.1% year-on-year increase. According to Canalys data, the group ranked among the top three in global smartphone shipments this quarter, with a market share of 14.6%, the fastest growth rate among the top five brands. The group's global smartphone shipments have ranked among the top three globally for sixteen consecutive quarters. Meanwhile, the group's user ecosystem continues to expand. In June 2024, the group achieved a new historical high in global monthly active users, reaching 675.8 million, an 11.5% year-on-year increase. As of June 30, 2024, the group's AIoT platform had connected IoT devices (excluding smartphones, tablets, and laptops) to 822.2 million units, a 25.6% year-on-year increase. On March 28, 2024, the group officially launched its first car product, the Xiaomi SU7 series, completing an essential part of the group's product ecosystem matrix. In the second quarter of 2024, the Xiaomi SU7 series delivered 27,307 new vehicles.

The group continues to deepen its high-end strategy, constantly improving product capabilities. In July 2024, the group introduced the new generation Xiaomi MIX Fold 4, achieving a lighter and thinner experience on top of flagship performance. The group also launched the first folding Xiaomi MIX Flip, combining fashion and technology while delivering flagship performance. With the gradual iteration of the group's high-end methodology, enhancement of high-end product capabilities, and accumulation of user mindshare, the group is experiencing positive changes in high-end smartphone competition. In the second quarter of 2024, in mainland China, the group's high-end smartphone shipments accounted for 22.1% of the total smartphone shipments, an increase of 2.0 percentage points year-on-year. According to third-party data, in the second quarter of 2024, the group's market share increased year-on-year in the price segments of 3,000-4,000 yuan, 4,000-5,000 yuan, and 5,000-6,000 yuan in mainland China, with market shares of 16.8%, 20.1%, and 8.9% respectively.

The year 2024 marks a further expansion and upgrade of Xiaomi's New Retail strategy. In the second quarter of 2024, the group's offline retail stores in mainland China continued to grow. As of June 30, 2024, the group had over 12,000 offline retail stores in mainland China. According to third-party data, in the second quarter of 2024, the group's market share in offline channels for smartphones in mainland China reached 10.4%, an increase of 2.5 percentage points year-on-year. During the 2024 618 Shopping Festival, the group's overall cumulative payment exceeded 26.3 billion yuan, setting a new record in Xiaomi's annual promotional activities.

The group continues to deepen its global presence, focusing on global market growth opportunities. In the second quarter of 2024, the group's overseas market revenue was 38.1 billion yuan, accounting for 42.8% of total revenue. According to Canalys data, in the second quarter of 2024, the group's smartphone shipments ranked among the top three in 58 countries and regions globally, among the top five in 70 countries and regions, and for the first time, among the top two in smartphone shipments in the Latin American region. With the increasing recognition of the group's global brand and the enhancement of its global operational capabilities, the group's overseas AIoT business is steadily growing. According to Canalys data, in the second quarter of 2024, the group's tablets ranked among the top five globally with a significant increase in market share to 6.0%; the group's TWS earbuds ranked among the top three in global shipments; and the group's wearable wristband devices also ranked among the top three globally.

The second quarter of 2024 was the first complete delivery quarter after the launch of the Xiaomi SU7 series, where the group fulfilled its user promise of 'Launch to Market, Market to Delivery, and Delivery to Volume' by delivering 27,307 new Xiaomi SU7 series vehicles. To meet user demand, the group is boosting production capacity. In June 2024, the group's Xiaomi automotive factory began double-shift production, and in July 2024, the production line underwent optimization and maintenance. The group aims to achieve the target of delivering a total of 100,000 new Xiaomi SU7 series vehicles by November 2024, and sprint towards a new goal of delivering 120,000 new Xiaomi SU7 series vehicles by the end of 2024. Concurrently, the group is expanding the new retail network for Xiaomi cars to continuously improve brand strength. As of June 30, 2024, the group had 87 automotive sales outlets covering 30 cities in mainland China.

The group steadily advances its 'New Decade Goals': making massive investments in core foundational technologies to become a new generation global leader in hardcore technology. In the second quarter of 2024, the group's R&D expenses reached 5.5 billion yuan, a 20.7% year-on-year increase. As of June 30, 2024, the group had 18,290 R&D personnel, accounting for 48.7% of the total workforce. Additionally, the group continues to expand its intellectual property capabilities, having obtained over 0.04 million patents globally as of June 30, 2024. In July 2024, the group officially announced the new Xiaomi smartphone smart factory. The entire factory located in Changping District, Beijing, has a total investment of 2.4 billion yuan, with an annual capacity of 10 million flagship devices. It achieves 100% automation through in-house manufacturing equipment development and completes the industry-leading end-to-end industrial big data infrastructure construction, realizing 100% digitalization in industrial production. The Xiaomi smartphone smart factory marks another significant step forward in Xiaomi's hardcore technology journey.

The group continues to expand asia vets to comprehensively empower, and is committed to using asia vets to enhance product capabilities and user experience. In July 2024, the group first released a large voice model and first installed it on Xiaomi SU7 series, providing car wake-up defense function for Xiaomi SU7 series. At the same time, the group upgraded the multimodal recognition and understanding capabilities of Xiao Ai, providing users with functions such as AI document Q&A, AI smart editing, and so on. Finally, the group will upgrade the full model Xiao Ai for mobile phones, tablets, televisions, speakers and other products, providing users with a more intelligent experience.

The group efficiently executes the core business strategy of "steady progress". In the second quarter of 2024, the group's overall gross margin reached 20.7%. In terms of business segments, in the second quarter of 2024, the "Mobile × AIoT" segment of the group had a gross margin of 21.1%, and the gross margin of the group's "smart electric vehicles and other innovative businesses" segment was 15.4%. The group continues to reduce costs and increase efficiency. In the second quarter of 2024, the group's overall operating expense ratio was 14.2%, a decrease of 1.0 percentage point year-on-year. Among them, the operating expense ratio of the "Mobile × AIoT" segment was 11.7%, a year-on-year decrease of 1.1 percentage points. In the second quarter of 2024, the group's adjusted net income reached RMB 6.2 billion, an increase of 20.1% year-on-year. Ample cash is an important foundation for the sustainable development of the group's core business and new businesses. As of June 30, 2024, the group's cash reserve was RMB 141 billion. The group is also actively repurchasing stocks in the open market. The group has obtained board approval for a HKD 10 billion repurchase quota on June 6, 2024. Since the beginning of this year, the group's share buyback amount has reached approximately HKD 3.68 billion, or approximately 248 million shares of stock.