Following the smartphone and gadget maker's revenue beat and higher-than-expected profits from its recently launched electric-car business, Xiaomi stock surged significantly in Hong Kong.
Xiaomi Showed an Upbeat Earnings Report
The Chinese company's shares were up 7.3% at 18.80 Hong Kong dollars (US$2.41) early on Thursday, putting them on course for their biggest percentage profit in over four months in a single day. In terms of performance, Xiaomi stock outperformed the industry-leading Hang Seng Index.
Xiaomi announced a 39% rise in net profit for the second quarter on a record revenue on Wednesday, citing increases in sales across all of its business segments. The company's first-ever reveal of its electric vehicle operations showed a higher-than-expected net profit margin of 15.4%, making it one of a few Chinese automakers with double-digit gross profit margins. For this period, Tesla's automobile revenue margin was 14.6%.
Xiaomi's Step Into EV Market
The SU7 sedan, which Xiaomi introduced in late March, began receiving deliveries in April, marking Q2's debut as an EV vendor. XPeng, a Chinese EV startup, delivered 30,207 EVs during the quarter, slightly less than the total number of SU7 shipping, reaching 27,307 units.
With a median retail price of 228,644 yuan ($32,058) per EV, the company's EV business generated earnings of 6.2 billion yuan ($0.87 billion) during the quarter.
The company's EV business's net profit margin and a few other novel endeavors reached 15.4%. Meanwhile, the gross profit amounted to 979.8 million yuan ($137.38 million). The car's manufacturer now projects that it will deliver 100,000 vehicles by November, well ahead of schedule. The company's goal for the year is to reach the 120,000 vehicle shipment target.
When Xiaomi began accepting demands for its latest EV in March, more than 50,000 definitive orders were placed in less than 30 minutes, suggesting that there would be an increased demand for the smartphone maker's first EV.
The SU7 is available in three models: Standard, Pro, and Max. The base model costs 215,900 yuan, less than the lowest price of Tesla Inc.'s Model 3 in China.
