Huami Corporation (HMI) Reports Q4 EPS of $0.50 on Revenues of $303.3M

Huami Corporation (NYSE: HMI) reported Q4 EPS of $0.50. Revenue for the quarter came in at $303.3 million.

Fourth Quarter 2019 Financial and Operating Highlights

• Revenues reached RMB2,111.4 million (US$303.3 million), representing an increase of 72.4% from the fourth quarter of 2018.
• Gross margin was 23.8%, compared with 25.2% for the fourth quarter of 2018.
• Net income attributable to Huami Corporation was RMB207.2 million (US$29.8 million), compared with RMB126.0 million for the fourth quarter of 2018.
• Basic and diluted net income per American depositary share ("ADS") attributable to ordinary shareholders of Huami Corporation was RMB3.36 (US$0.48) and RMB3.21 (US$0.46), respectively. Each ADS represents four (4) Class A ordinary shares.
• Adjusted net income attributable to Huami Corporation[1] was RMB213.8 million (US$30.7 million).
• Adjusted basic and diluted net income per ADS attributable to ordinary shareholders of Huami Corporation[2] was RMB3.46 (US$0.50) and RMB3.31 (US$0.48), respectively. Each ADS represents four (4) Class A ordinary shares.
• Total units shipped reached 14.7 million, compared with 9.2 million in the fourth quarter of 2018.

"2019 was an outstanding year for Huami marked by accelerated growth, strengthening brand recognition, and robust financial and operational results, as we solidified our leadership position in the global smart wearables industry," said Wang Huang, Chairman and CEO. "In the fourth quarter, we achieved healthy revenue and net income growth, driven by successful new product launches, effective sales and marketing outreach, and our successful efforts to expand internationally through a multi-channel strategy comprised of direct sales and third-party sales channels. In addition, we collaborated closely with Timex on product development, and the product has been launched into the market, while our partnership with Xiaomi continued, leading to the Mi-Band 5's expected release in 2020.

"Most significantly, we started the initial phases of several exciting new business initiatives, including ear buds and interactive treadmills, marking a new chapter for our Company. By creating new product categories, we are further expanding our products and services offerings beyond current smart wearables, which will ultimately dovetail with our vision of a future centering around health and fitness services. Healthcare has always been a focus for the Company since Huami was founded in 2013. With our established corporate mission of 'Connect Health with Technology,' we will continue focusing on healthcare related functionalities through the development of our smart devices, proprietary AI-chip and healthcare services. Despite the COVID-19 virus outbreak that posted world-wide challenges and affected parts of our supply chain, we and our supply chain partners have gradually resumed normal operations since mid-February. We are confident that our growth initiatives coupled with our strong sales and marketing capabilities, will help us achieve another successful year in 2020."

David Cui, Chief Financial Officer, added, "In the fourth quarter of 2019, the Company continued its trend of strong growth momentum, driven by robust unit sales of both self-branded products and Mi-Band 4, most notably during the Double 11 shopping festival this year. We shipped 14.7 million units in the fourth quarter, representing a 59.8% growth from the same quarter last year. Our revenues and net income, attributed to Huami Corporation, increased by 72.4% and 64.5% year-over-year respectively, demonstrating growing brand awareness and adoption of our products by users.

"During the fourth quarter, we continued investing in R&D for innovative products and strengthened our sales and marketing strategy to promote our Amazfit brand. While we do anticipate some impact on first quarter results from the recent nationwide COVID-19 outbreak, we are confident we can sustain growth and profitability in 2020 and beyond through new product initiatives, collaborative opportunities, global expansion, and balanced operational expense control."

Outlook

For the first quarter of 2020, the management of the Company currently expects:

• Net revenues to be between RMB980.0 million and RMB1,010.0 million, which would represent an increase of approximately 22.6% to 26.3% from RMB799.6 million for the first quarter of 2019.

For earnings history and earnings-related data on Huami Corporation (HMI) click here.

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