Huami’s revenue and profit growth fell in the fourth quarter, and the intelligent equipment market was surrounded by strong rivals

Analysts pointed out that based on the layout of major manufacturers, huami is facing not a single equipment competitor, but a complete IOT ecology. As far as huami’s current product matrix is concerned, the competition situation is quite difficult. Recently, huami technology, a Xiaomi ecological chain enterprise, released its second quarter financial report. According to the financial report, huami’s revenue in the second quarter was 1.137 billion yuan, an increase of 9.5% over the same period last year; the net profit attributable to its parent company was 13.3 million yuan, down 85% from 89.4 million yuan in the same period last year. < p > < p > as the first enterprise in Xiaomi ecological chain to enter the US stock market, huami’s performance in recent years is not satisfactory. On the one hand, huami’s revenue growth is continuing to slow down, and its profit has also declined significantly. Its own brand, amazfit, is still excessively dependent on the revenue brought by Xiaomi. < / P > < p > on the other hand, huami’s intelligent wearable device market competition is increasingly fierce, surrounded by strong enemies at home and abroad. Analysts pointed out that based on the layout of major manufacturers, huami is facing not a single equipment competitor, but a complete IOT ecology. As far as huami’s current product matrix is concerned, the competition situation is quite difficult. According to huami financial report, from the third quarter of 2019 to the second quarter of this year, the revenue growth rate of huami is 73.31%, 72.42%, 36.13% and 9.5%, respectively. It can be seen that huami’s revenue growth is gradually slowing down, and this quarter’s revenue growth is falling to single digits. According to financial reports, huami’s gross profit margin in the second quarter was 22.3%, down from 26.7% in the same period last year. According to the financial report, the main reason for the decline in gross profit margin is that although the high proportion of huami brand products has a positive impact on the gross profit margin, the increase in sales of Xiaomi brand products with lower profit margin has affected the gross margin. < p > < p > affected by the decline of gross profit rate, huami’s net profit growth rate also continued to decline. According to the financial report, huami’s net profit in the second quarter decreased by 85% year-on-year to 13.3 million yuan; from the third quarter of 2019 to the second quarter of this year, the growth rate of huami’s net profit was 78.66%, 64.52%, 74.54% and-85.0%, respectively. Internet analyst Gong Jinhui believes that although Xiaomi bracelet has contributed considerable shipping volume and revenue to huami, the profit margin of millet products is low. In addition, the negative impact of the epidemic on its supply chain, production and sales led to the lowest net profit of huami since its listing. < p > < p > huami’s financial report is not good-looking, but also a blow to investors’ confidence. After the release of the financial report, huami’s share price fell nearly 10% to US $13.21; as of August 18, the US stock closed down 8.69% to US $13.35, with a total market value of 827 million. < / P > < p > at present, huami’s revenue mainly comes from the sales of its own brand wearable devices, amazfit, and the expenses for Xiaomi Bracelet OEM. In this quarter, although huami did not disclose the proportion of its own brand revenue, according to the data disclosed by huami in 2019, the proportion of private brand revenue was 27.8%, down 5.3% year-on-year, which means that it still mainly relies on the revenue brought by Xiaomi. < p > < p > in October this year, the three-year strategic cooperation agreement between huami and Xiaomi is about to expire. It is not known how huami will choose in the future. However, from the current situation, huami is still unable to get rid of Xiaomi and realize “de millet”. < p > < p > industry insiders believe that Xiaomi’s self-developed smart watches have been in direct competition with huami, which puts huami in a dilemma. If the cooperation with Xiaomi is terminated and the income of OEM Xiaomi bracelet is lost, it will be difficult for huami to face the market competition at home and abroad; if the cooperation continues, huami’s own development will also be restricted. < p > < p > in the second quarter of this year, huami’s intelligent equipment shipment volume was 8.9 million, an increase of 7.2% compared with 8.3 million in the same period of last year. In the first half of this year, huami launched a number of smart devices, including new smart watches and sports headphones, with a total shipment of 16.5 million units, an increase of nearly 20% over the same period last year. < / P > < p > at present, the market competition of intelligent wearable devices is becoming increasingly fierce. According to the latest data of globaldate, the smart wearable market will grow significantly in the next few years, from nearly 27 billion dollars in 2019 to 64 billion dollars in 2024. < p > < p > from the financial report, huami’s current focus is on entering the overseas market. In the second quarter of this year, huami’s sales and marketing expenses increased by 76.6% to 71.3 million yuan on a year-on-year basis, accounting for 6.3% of revenue, up from 3.9% in the same period last year. The reason for this increase is mainly due to huami’s efforts to expand the overseas market of its own brand amazfit products, as well as the increase in promotion activities and personnel related expenses. Thanks to this, huami’s overseas products accounted for 47.9%, which was the highest value after listing. However, huami’s overseas development road can be said to be surrounded by strong enemies. Apple, Samsung and Jiaming are firmly occupying the top three in the intelligent wearable device market. < / P > < p > according to the latest data from strategy analytics, Apple’s watch expanded its leading edge in the first quarter of this year, with a shipment of 7.6 million units and a market share of 55%. Samsung of South Korea ranked second with 1.9 million shipments, with a market share of 13.9%. Garmin, the third largest company in the United States, shipped 1.1 million units with a market share of 8%. In China, Huawei, Xiaomi and apple are the top three enterprises. Gong Jinhui said that Huawei and Xiaomi have greater brand influence in the consumer market, and the impact of marching into the wearable equipment field is not small for huami, which also makes it not have enough voice in product negotiation. < / P > < p > “based on the layout of major manufacturers, huami is no longer facing a single equipment competitor, but a complete IOT ecology. As far as huami’s current product array is concerned, the competition situation is quite difficult. ” Analysts pointed out. < p > < p > in order to reverse the decline, improve the competitiveness of products, and strengthen the research and development of future products, huami is increasing R & D investment. According to the financial report, huami’s R & D expenditure in the second quarter was 117 million yuan, an increase of 25% over the same period last year, accounting for 10.3% of revenue, higher than 9% in the same period last year. < / P > < p > for huami, if it wants to occupy a place in the intelligent wearable market, it should not rely too much on Xiaomi, but should have more core competitiveness. Increasing investment in technology and products is only one aspect. How to achieve technological breakthrough and form its own product matrix is the key point.