Xiaomi Hit by Smartphone Slump and New Product Investment; FVE Down to HKD 12.40

Xiaomi’s 2022 result was negatively affected by one of the weakest smartphone markets in many years and continued investment into new products such as electric vehicles that are yet to launch. The volatility in this industry was highlighted with Xiaomi’s 34% revenue growth and 79% operating profit growth (ex-investment gains and losses) in 2021, followed by a revenue decline of 15% and operating profit down 72% year on year in 2022, with fourth-quarter 2022 revenue down 23%. Full-year research and development expenses were up 22% to CNY 16 billion driven in part by spending CNY 3.1 billion on smart electric vehicles and other growth initiatives such as robotics. Xiaomi is on track for its first smart EV to be mass produced in the first half of 2024.