Chinese smart wearable producer Huami disclosed Monday that it booked RMB 799.6 million (USD 119.1 million) in revenue in the first quarter of this year, up by 36.5% year-on-year, due to an increase in sales of wearable products under Xiaomi brand and products under its own brand Amazfit. The latter rakes in a faster-growing share of the revenue these days.
Its net income reached RMB 75.3 million (USD 11.2 million) in the first quarter, a fourfold increase compared to the RMB14.8 million in the first quarter of 2018. Adjusted net income, excluding one-off items, increased by 2.7% to RMB 95 million (USD 14.2 million).
In a breakdown, the company said it shipped 4.8 million Mi bands and Mi smartwatches, up 13.9% year-on-year. The Mi branded gadgets booked 469.1 million (USD 69.9 million) in revenue, up by 22.8% year-on-year, according to a slide deck published on seekingalpha.com by Huami Corporation in conjunction with its 2019 Q1 earnings call.
Meanwhile, it shipped 0.8 million Amazfit bands and smartwatches, up by 49.3% year-on-year, booking RMB 330.5 million (USD 49.2 million) in revenue, up by 62% year-on-year. Revenue in this segment accounted for 41.3% of the company’s entire revenue in the first quarter.
Huami’s public offering prospectus filed with the US Securities and Exchange Commission on April 24 also shows that its reliance on Xiaomi, which held 14.8% of its outstanding shares before the offering, has been decreasing over the three years.
The smart wearable maker disclosed that it generated 33.1% of its total revenues from sales of its self-branded products in 2018, compared with 21.2% in 2017 and 7.9% in 2016.
In addition to developing its self-branded products, Huami has also entered into a cooperation agreement with US watchmaker Timex.
Huami’s management said that the company is to launch multiple models of Timex branded and potentially co-branded smartwatches later this year. The firm may leverage on Timex sales and marketing channel online and off-line, such as those in India, to sell Amazfit products, said COO Mike Yeung on the earnings call, according to Seeking Alpha.
CFO David Cui, when answering analysts’ questions on how the Sino-US trade dispute may affect Huami’s business, said that Huami’s sales to the US market now only represents a very small portion of total revenues and its products had been levied “zero tariffs” so far. He added that Huami doesn’t rely on the US to source its components.
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