Xiaomi made headlines when it announced a five percent cap on profits last year (even though that comes with a few caveats). You’d think the firm wouldn’t be making much in the way of a profit as a result, but the company beat estimates for its Q4 2018 results.
Xiaomi’s net profit for the quarter surged to 1.85 billion yuan (~$275.59 million), according to Reuters. The news outlet added that this figure exceeded a 1.7 billion yuan (~$253.2 million) average forecast by ten analysts. The company also took to Twitter to report a 6.6 billion yuan net profit for the fiscal year, claiming year-on-year growth of 59.5 percent.
The Chinese brand added that its hardware business had a net profit margin of under one percent for the 2018 fiscal year. This is well below the five percent cap on net profits it imposed on itself last year. And with CEO Lei Jun reportedly saying that the price of its smartphones could increase in the near future, it seems like Xiaomi has plenty of headroom before hitting the five percent cap.
Xiaomi reported quarterly revenue of 44.4 billion yuan (~$6.6 billion), up 27 percent from Q4 2017. And it recorded full fiscal year revenue of 174.9 billion yuan (~$26 billion), up 52.6 percent from a year ago.
Xiaomi’s plans for expansion
CFO Shou Zi Chew told journalists that sales from regions outside China accounted for 40 percent of revenue in Q4 2018. And the executive confirmed that Xiaomi will expand to more international markets in 2019.
But which markets are potentially in the company’s cross-hairs, then? Well, Zi Chew told CNBC that the company is looking to expand its offerings to Latin America and Africa.
Xiaomi is already in several Latin and South American nations, such as Chile and Mexico, but there certainly seems to be room to grow here as well.
The company’s devices are also available in various African countries, albeit via distributors for the most part. And with news of an African department being set up earlier this year, it definitely looks like we might see a concerted push into numerous African markets.