Xiaomi's net profit for the quarter ending in June was $1.4 billion. This figure exceeded analysts' average forecast, but compared to the same period last year, it fell by 21%, according to Bloomberg.
According to the agency, revenue decreased by 6.1% to $685 million.
The article notes that Xiaomi has suffered greater losses than other leading smartphone manufacturers due to the ongoing shortage of memory chips. Major memory manufacturers, including Samsung Electronics and SK Hynix, have redirected some of their production capacities to the manufacturing of advanced chips for AI-powered data centers. As a result, there has been a shortage of simpler memory chips in the market, and their prices have surged.
Bloomberg points out that investors are doubtful whether Xiaomi can control rising costs due to the increasing prices of components. According to the agency, since the end of June, the company's shares on the Hong Kong stock exchange have risen by nearly 20%, indicating sustained optimism about the company's prospects.
At the same time, according to research firm Counterpoint, in the second quarter, Xiaomi's smartphone shipments decreased more significantly than any of the five largest brands in the world. The company operates across the entire spectrum of demand, from premium foldable smartphones to budget models costing less than $100, which has made it particularly vulnerable to the memory chip shortage.
Additional pressure on Xiaomi's financial results has also come from the founder Lei Jun's transition to electric vehicle production, as well as fierce competition in the Chinese automotive market, Bloomberg reports. In recent weeks, investors have been concerned about the release of two new hybrid models, which were priced lower than market expectations.
