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Wednesday, December 7, 2022

Xiaomi revenue falls in Q3 as Covid-19 checks bite

Chinese smartphone maker Xiaomi Corp reported a 9.7 percent drop in third-quarter revenue on Wednesday, hit by China’s Covid-19 restrictions and declining consumer demand.

Sales in the third quarter reached 70.17 billion yuan (9.81 billion US dollars), down from 78.063 million yuan in the same quarter a year earlier, below analysts’ expectations of 70.52 billion yuan.

Net income fell 59.1 percent to 2.12 billion yuan during the period from 5.176 million yuan a year ago.

China consumer consumption has remained weak as cities across the country continue to implement lockdowns to prevent the spread of the Omicron variant.

The electronics sector has taken a big hit in turn. Smartphone shipments in the third quarter fell 11 percent in China and 9 percent globally, research firm Canalys said.

Revenue from smartphones, which account for about 60 percent of Xiaomi’s total sales, fell 11.1 percent year-on-year.

In 2021, Xiaomi saw a surge in sales after it wrested market share from rival Huawei Technologies Co Ltd, whose ability to purchase components was affected by US sanctions.

However, the momentum was short-lived. In May, Xiaomi reported its first quarterly revenue decline since its listing in 2018. In August, second-quarter revenue fell 20% year-on-year.

Xiaomi’s share price has fallen by almost 50 percent since the beginning of the year.

The company, in turn, has sought new areas of growth. Last year, it formally announced a foray into electric vehicles, pledging to go into mass production in the first half of 2024. ($1 = 7.1545 Chinese yuan)

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