Xiaomi Reports Strong Growth in 2021 With Some Q4 Margin Contraction; FVE Down to HKD 21

Xiaomi’s 2021 results were strong despite being negatively affected by component shortages, increased logistics and transportation costs, and falling market prices for investments. Full-year revenue grew 33% year on year with operating profit (ex-investment gains and losses) up 79% year on year. The company increased global smartphone market share to 14.1% in 2021 from 11.5% in 2020 to attain a clear number three ranking by volume. In the absence of Huawei, the company’s smartphone market share grew faster than any of the other five major smartphone brands. Fourth quarter did see a slowdown with revenue growing at 18.4% year on year and operating profit up 63% year on year but down 33% sequentially. In the fourth quarter, the company also invested in sales and marketing expenses (up 23% year on year) and research and development expenses (up 24% year on year). Smartphone gross margins fell to 10.1% in the fourth quarter from 10.5% in fourth-quarter 2020 and an average of 12.5% over the first nine months of 2021, but were likely affected by the sales in this quarter, particularly Double 11 in China.