Huami Technology today released its second-quarter earnings report for the 2018 fiscal year ending June 30, with revenue of 760.1 million yuan ($114.9 million), a year-on-year increase of 54.8%. At the same time, its net profit was 85.5 million yuan ($12.9 million). Last year, this indicator was 49.7 million yuan ($7.24 million). Based on non-GAAP, the adjusted net profit attributable to Huami was 101.6 million ($15.3 million), an increase of 57.8% over the same period of the previous year.

Second Quarter Results Summary:

• Revenue was 760.1 million ($114.9 million), a year-on-year increase of 54.8%.
• The gross profit margin was 25.9%, which was basically the same as the same period of the previous year.
• Net profit attributable to Huami was 85.5 million ($12.9 million), compared with 49.7 million yuan in the same period last year.
• Based on non-GAAP, the adjusted net profit attributable to Huami was 101.6 million ($15.3 million), an increase of 57.8% over the same period of the previous year.
• Based on non-GAAP, the basic and diluted earnings per share attributable to ordinary shareholders were 1.69 yuan ($0.26) and 1.61 yuan ($0.24), respectively, compared with 1.17 yuan ($0.17) and 1.12 yuan ($0.16) for the same period last year, respectively.
• Total equipment (smart wearables) shipments were 5.4 million units, compared with 4.5 million units in the same period last year.

Summary of results for the first six months of this year:

• Revenue was 1,346.1 yuan million ($203.4 million), a year-on-year increase of 63.7%.
• Gross profit margin was 25.5%, compared to 24.4% in the same period last year.
• Net profit attributable to Huami was 100.3 million yuan ($15.2 million), compared to 45.2 million yuan ($6.59 million) in the same period last year.
• Based on non-GAAP, the adjusted net profit attributable to Huami was 194.1 million yuan ($29.30 million), an increase of 160.8% over the same period of the previous year.
• Based on non-GAAP, the basic and diluted earnings per share attributable to ordinary shareholders were 3.63 yuan ($0.55) and 3.16 yuan (US$0.48), compared with 1.17 yuan and 1.12 yuan for the same period last year, respectively.

Second quarter performance analysis:

• Revenue was 760.1 million yuan ($114.9 million), an increase of 54.8% compared with 491.1 million yuan ($71.58 million) in the same period last year.
• The revenue cost was 563.3 million yuan ($ 85.1 million), an increase of 54.7% compared with 364.1 million yuan in the same period last year.
• Gross profit was 196.9 million yuan ($29.8 million), an increase of 55.0% compared with 127 million yuan ($18.51) in the same period last year. The gross profit margin was 25.9%, which was the same as the same period last year.
• The total operating expenses were 97.9 million yuan ($14.8 million), an increase of 42.2% compared with 68.8 million yuan ($10.03 million) in the same period last year.
• R&D expenditure was 44.4 million yuan ($6.7 million), an increase of 35.1% compared with 32.8 million yuan ($4.78) in the same period last year.
• General and administrative expenses were 32.8 million yuan ($5 million), an increase of 23.3% compared with 26.6 million yuan ($3.88 million) in the same period last year.
• Sales and marketing expenses were 20.7 million yuan ($3.1 million), an increase of 120.5% compared with 9.4 million yuan in the same period last year.
• Operating profit was 99 million yuan ($15 million), while operating profit for the same period last year was 58.2 million yuan ($8.48 million).
• Profit before tax was 101.4 million yuan ($15.3 million), while profit before tax for the same period last year was 58.8 million yuan ($8.57 million).
• Income tax expenses were 15.9 million yuan ($2.4 million) compared to 8.5 million yuan ($1.24 million) in the same period last year.
• Net profit attributable to Huami was 85.5 million yuan ($12.9 million), compared with 49.7 million yuan ($7.24 million) in the same period last year.
• The net profit attributable to Huami ordinary shareholders was 80.8 million yuan ($12.2 million), compared to 14.1 million yuan ($2.06 million) in the same period last year.
• The basic and diluted earnings per share attributable to ordinary shareholders were 1.42 yuan ($0.21) and 1.35 yuan ($0.20), compared with 0.85 yuan ($0.12) and 0.82 yuan ($0.12) in the same period last year, respectively.
• Based on non-GAAP, the adjusted net profit attributable to Huami was 101.6 million yuan ($15.3 million), an increase of 57.8% over the same period of the previous year.
• Based on non-GAAP, the basic and diluted earnings per share attributable to ordinary shareholders were 1.69 yuan ($0.26) and 1.61 yuan ($0.24), respectively, compared with 1.17 yuan and 1.12 yuan for the same period last year, respectively.
• As of June 30, 2018, Huami had cash and cash equivalents of 893.9 million yuan ($135.1 million), and as of December 31, 2017, it was 366.3 million yuan ($53.39 million).

Performance outlook:

Huami expects net revenue for the third quarter of FY18 to reach 820 million to 840 million yuan ($119.5 – 122 million), an increase of 73.0% to 77.2% compared with 474.1 million yuan ($69.10 million) in the same period last year.