In January 2021, Xiaomi was blacklisted by the United States government. From then on, the Chinese manufacturer could no longer receive American investments. At least for a while, because on March 12, 2021, Xiaomi obtained an injunction against this ban. Yet despite this trade war backdrop, in Q4 2020, Xiaomi’s revenue from overseas markets grew 27.6% to 33.8 billion yuan (some $ 5 billion), or 47.9% of its total revenue.
According to the South China Morning Post, in the same quarter, Xiaomi’s profit increased by 261% to reach 8.8 billion yuan (of the order of 1.3 billion dollars). The company thus exceeded its growth forecast set at 2.5 billion yuan. In 2019, the Chinese manufacturer made a profit of 2.4 billion yuan (nearly 370 million dollars). For the full year of 2020, Xiaomi’s profit also exceeded estimates with growth of 101% to 20.3 billion yuan (about $ 3.1 billion) in profit. These results mark the most profitable year since 2018, the year in which Xiaomi made a profit of 13.6 billion yuan (some $ 2 billion).
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“What happened to Huawei is a warning for Xiaomi”
On the revenue side, in the third quarter of 2020, Xiaomi recorded growth of 24.8% to reach 70.5 billion yuan (nearly 10.8 billion dollars). In 2019, the smartphone maker’s revenue was 56.5 billion yuan (around $ 8.7 billion). However, unlike the profit, the turnover did not reach the estimated 74.6 billion yuan. Over the full year of 2020, revenue increased 19.4 percent to 245.9 billion yuan (approximately $ 37.7 billion).
Despite this growth, on March 24, 2021, Xiaomi’s stock fell 3.7% on the Hong Kong Stock Exchange to reach 25.10 Hong Kong dollars (around 3.23 dollars). However, on January 5, 2021, the stock had reached its all-time high with a valuation of 35.30 Hong Kong dollars. These variations do not prevent the manufacturer from ranking third among smartphone sellers behind Apple and Samsung. According to an IDC study, in the fourth quarter of 2020, Xiamoi held an 11.2% market share with 43.3 million phones sold. On wearables, with its range of Mi Band watches, Xiamoi ranks second behind Apple with 13.5 million units sold and 8.8% of the market share.
These results stem from a strategy seeking to compete with Huawei in both the domestic and international markets, while facing US restrictions. “What happened to Huawei is a warning for Xiaomi”, considers CCS Insight analyst Fiona Vanier who believes that “although Xiaomi has not been sanctioned with the same restrictions as Huawei, like all Chinese manufacturers, it is facing intense surveillance which casts doubt on its outlook ”.