Tuesday, August 4, 2020
Martin Hennecke

Xiaomi surprises as profit rises 10pc
Mainland smartphone maker Xiaomi (1810) posted its first-quarter adjusted net profit rose 10.6 percent year-on-year to 2.3 billion yuan (HK$2.51 billion) on a non-IFRS basis, beating expectations. Total revenue grew 13.6 percent to 49.7 billion yuan, also better than expected, due to phone sales growth. But net profit fell 30.79 percent to 2.16 billion yuan for the first quarter. Smartphone sales saw a 12.3 percent increase to 30.3 billion yuan, while first-quarter shipments rose 4.7 percent to 29.2 million, ranking fourth globally. Xiaomi's overseas revenue rose by 47.8 percent year-over-year to 24.8 billion yuan, marking the first time overseas revenue contributed half of the total income. Xiang Wang, president and acting chief financial officer at Xiaomi, warned that second-quarter profits will be affected as its major outbound markets, including India and some European countries, ordered lockdowns amid the pandemic. Meanwhile, Chinese personal computer maker Lenovo (0992) saw its first-quarter net profit plunged 64 percent year-on-year to US$43 million (HK$335.4 million), but still beat estimates, mainly due to the pandemic's impact on its mobile business. First-quarter revenue also dropped 9.7 percent to US$10.58 billion. Yang Yuanqing, chairman and chief executive of Lenovo, said the company shut down some of its factories in mainland China, especially smartphone factories in Wuhan, the epicenter of the pandemic, during the first quarter, but has since returned to full production capacity.
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