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Gross profit margin increased from 17.1% a year ago to 22.7%
Guangzhou, China, November 24, 2021 /PRNewswire/ - Viomi Technology Co., Ltd ("Viomi" or "Company") (NASDAQ: VIOT), a leading IoT @ Home technology company in China, today Announces its unaudited financial results for the third quarter ended September 30, 2021.
Financial and operating highlights for the third quarter of 2021
“In the third quarter, we further improved the one-stop IoT home solution platform to realize the AI-driven IoT home scenario. We also continued to optimize our product portfolio, implement the'trend technology' brand marketing and'larger stores,' Better merchants’ channel strategy. In addition, we increased R&D investment, expanded artificial intelligence, algorithm and hardware R&D teams, accelerated artificial intelligence product innovation and technology accumulation, and significantly increased R&D expenses. In order to enhance brand awareness, we also invested Additional funds for advertising and marketing resources in the third quarter. Due to the substantial increase in R&D and marketing expenses, our bottom line has temporarily declined, and our strategic adjustments and resource investment have once again brought about a rebound in gross profit margin, increased brand awareness, and more equipment. Diversified and balanced sales channels handle the sales and services of our smart home products. Our overall business is developing in a high-quality and healthy direction." said Mr. Chen Xiaoping, founder, chairman of the board and CEO of Micron.
"In terms of product development, we have formulated product strategies from three aspects: (i) we have increased our investment in R&D, technological innovation and artificial intelligence applications, and improved our brand influence through product optimization; (ii) We provide users with customized bundling purchase solutions, rather than simply selling a single product; (iii) We focus on scenario innovation, which will improve our smart home category and provide a more comprehensive smart home experience. We will be in the first half of 2021 Launched a series of new artificial intelligence products, including omni-directional air conditioners, high-end sweeping robot Alpha 2 Plus, EyeBot Range rood, 800G-1200G Super series of large-flow water purifiers. In September we also launched the smart wet and dry vacuum cleaner Cyber Series. Product sales performance in the third quarter was strong, driving the gross profit margin to continue to rise. The eLink 2T smart lock uses AI face recognition technology. We will launch exciting new product lines in the next few quarters, including smart homes, smart kitchens , Water purifiers, cleaning products, etc."
“Secondly, in order to enhance brand influence, we invited one of China’s top celebrities, Deng Lun, to become our global brand ambassador, and established our brand positioning as a'trend technology'. In the second half of this year, we expanded our omni-channel marketing and advertising. Activities, including elevator advertising, print media, TV and social media. Our brand's search frequency on major search engines has increased, and our internal data shows that post-90s users and users from new first- and second-tier cities have increased in the past few months inside."
"Third, we have increased our exposure and sales in new content channels such as Pinduoduo, Douyin and Kuaishou. We have established dedicated teams for these new sales channels to increase traffic and attract more young consumers, as well as our "Short video marketing and KOL" live broadcasts have increased brand awareness and promoted sales growth. The revenue contribution of these new channels has also increased in the past few months. "
"In terms of our offline channels, we continue to implement the strategy of'bigger stores, better merchants', and provide our users with a'one-stop smart home' solution, integrating bundling purchases, scene-based shopping experience and installation After-sales service in one. These efforts have also strengthened our brand positioning of'trend technology'. In the second half of the year, we will accelerate the layout of 4s and 5s stores nationwide, and will open more large-scale Viomi experience stores nationwide." Mr. Chen Added.
"We are also expanding overseas business through channel upgrades, diversification of operating models, and category expansion. Recently, we have cooperated with well-known agents in Germany, Russia, Malaysia and Northern Europe to transform our overseas channels from small distributors to high-quality We plan to use their local resources, reputation and import sales experience to optimize our overseas business operations. Following our successful opening of our first self-operated store on Amazon in the United States, we are preparing to open our online store on Amazon in Europe Stores, and will launch sweeping robot products in the near future. Looking to the future, we will expand our global business to more countries and regions to seize the huge growth opportunities in the field of cleaning products."
"We have completed the first step of a one-stop IoT home solution platform and built a comprehensive product line across home scenarios. Now we will focus on product intelligent upgrades and scenario application innovation. Looking forward to next year, we will continue to improve our products Combination to further stabilize the recovery of gross profit margin, increase investment in artificial intelligence applications and technological innovation, enhance the "Trend Micro" brand, improve the overall business operation quality, and create long-term value and returns for the company. Users and shareholders," Mr. Chen concluded .
Net income was RMB 1.0565 billion (US$164 million), compared to RMB 1.486 billion in the third quarter of 2020. Net income was in line with the company's previous guidelines, and the main reason for the decrease was the sharp drop in Xiaomi's sales-brand sweeping robots, and product mix adjustments to expand profit margins in other categories.
-Internet of Things@家投资组合. Revenue from the IoT@Home product portfolio decreased by 39.3% from RMB 1.0602 billion in the third quarter of 2020 to RMB 643.5 million (US$99.9 million). The decrease was mainly due to (i) the sales of Xiaomi brand sweepers and robots; (ii) the adjustment of product mix due to the expansion of profits of some categories.
-Domestic water solution. Revenue from domestic water solutions increased by 7.9% from RMB 145.4 million in the third quarter of 2020 to RMB 157 million (US$24.4 million). The growth was mainly due to the company's product portfolio adjustments in this category, which helped increase sales and demand for new and larger-throughput water purifiers and the expansion of gross profit margins.
-Consumables. Consumables revenue increased by 11.7% from RMB 71.3 million in the third quarter of 2020 to RMB 79.6 million (US$12.4 million), mainly due to increased demand for the company's water purifier filter products.
-Small appliances, etc. Small household appliances and other revenues decreased by 15.9% from RMB 209.9 million in the third quarter of 2020 to RMB 176.5 million (US$27.4 million), mainly due to the company's continued optimization of its product portfolio to achieve higher gross profit margins in this category.
Gross profit was RMB 239.7 million (US$37.2 million), compared with RMB 254.3 million in the third quarter of 2020. Gross profit margin increased from 17.1% in the third quarter of 2020 to 22.7%, mainly due to the company's continued efforts to shift its business and product portfolio to products with higher gross profit margins.
Total operating expenses increased by 28.2% from RMB 226.4 million in the third quarter of 2020 to RMB 290.3 million (US$45.1 million), mainly due to the increase in R&D expenses and sales and marketing expenses.
R&D expenses increased by 56.1% from RMB 52.7 million in the third quarter of 2020 to RMB 82.2 million (US$12.8 million), mainly due to the increase in R&D experts and related salaries and expenses, as well as investment in research and development of new products.
Sales and marketing expenses increased by 20.4% from RMB 152.2 million in the third quarter of 2020 to RMB 183.4 million (US$28.5 million), mainly due to the increase in advertising and marketing activities to enhance the company's brand and market awareness.
General and administrative expenses increased by 15.2% to RMB 24.7 million (US$3.8 million) from RMB 21.4 million in the third quarter of 2020, mainly due to the increase in the estimated provision for accounts and bills receivable and the expansion of workplaces. Lease expenses incurred.
Operating losses were RMB 38.7 million (US$6 million), while operating income for the third quarter of 2020 was RMB 36.4 million. The loss was mainly due to the increase in R&D expenses and S&M expenses.
Non-GAAP operating losses[1] (excluding the impact of equity incentive expenses) was RMB 31.6 million (US$4.9 million), while non-GAAP operating income for the third quarter of 2020 was RMB 58.9 million.
[1] "Non-GAAP operating income (loss)" is defined as operating income (loss) that does not include share compensation expenses. Please refer to "Use of Non-GAAP Measures" and "Reconciliation of GAAP and Non-GAAP Results" elsewhere in this press release.
The net loss attributable to ordinary shareholders of the company was RMB 29.3 million (US$4.5 million), and the net profit attributable to ordinary shareholders of the company in the third quarter of 2020 was RMB 34.9 million.
The non-GAAP net loss attributable to the company’s ordinary shareholders[2] was RMB 22.2 million (US$3.4 million), while the non-GAAP net profit attributable to the company’s ordinary shareholders was 57.4 million in the third quarter RMB 2020.
[2] "Non-GAAP net income (loss) attributable to the company's common shareholders" is defined as the net income (loss) attributable to the company's common shareholders, excluding equity incentive expenses. Please refer to "Use of Non-GAAP Measures" and "Reconciliation of GAAP and Non-GAAP Results" elsewhere in this press release.
As of September 30, 2021, the company had cash and cash equivalents of 771.7 million yuan (US$119.8 million), restricted cash of 25.6 million yuan (US$4 million), and short-term deposits of 67 million yuan (US$10.4). 10,000 yuan) and short-term investments of 463.5 million yuan (71.9 million US dollars), as of December 31, 2020, they were 504.1 million yuan, 70.6 million yuan, zero yuan and 696.1 million yuan, respectively.
For the fourth quarter of 2021, the company currently expects:
-Net income is between RMB 1.2 billion and RMB 1.3 billion.
The company expects the sales of Xiaomi brand vacuum cleaners to continue to decline in the fourth quarter, and its own brand vacuum cleaners business will achieve rapid growth and become one of the main categories.
The above-mentioned outlook is based on current market conditions and reflects the company's current and preliminary estimates of market and operating conditions and customer needs, all of which are subject to change.
The company’s management will hold a conference call at 7:30 am Eastern time on November 24, 2021 (Wednesday) (Beijing time/Hong Kong time at 8:30 pm on November 24, 2021) to discuss financial performance and answer investors and analysis The teacher’s problem. Listeners can answer the call by dialing the following number:
United States (toll free): +1 888-346-8982 International: +1 412-902-4272 Hong Kong (toll free): 800-905-945 Hong Kong +852 3018-4992 China (toll free): 400-120-1203 Conference number : 10161880
The call will be replayed two hours after the call until December 1, 2021 by dialing:
United States: +1 877-344-7529 International: +1 412-317-0088 Replay access code: 10161880
In addition, the live and archived webcast of the conference call will be available on http://ir.viomi.com.
Viomi's mission is to redefine the future home through the concept of IoT@Home.
Viomi has developed a unique IoT @ Home platform, which consists of an innovative IoT-enabled smart home product ecosystem, and a set of complementary consumer products and value-added services. The platform provides consumers with an attractive home entry point, enabling consumers to intelligently interact with a wide range of IoT product portfolios in an intuitive and user-friendly way, making daily life more convenient, efficient and enjoyable, and at the same time making Viomi develops a home user base and captures consumption events driven by various additional scenarios in the home environment.
For more information, please visit: http://ir.viomi.com.
The company uses non-GAAP operating income (loss), non-GAAP net income (loss), non-GAAP net income (loss) attributable to the company, non-GAAP net income (loss) attributable to ordinary shareholders, non-GAAP basic per ordinary share And diluted net income (loss) and non-GAAP basic and diluted net income (loss) per American Depositary Share ("ADS") are non-GAAP financial indicators used to evaluate its operating performance and financial and operational decision-making purposes. Non-GAAP operating income (loss) refers to operating income (loss) that does not include share compensation expenses. Non-GAAP net income (loss) is the net income (loss) excluding stock-based compensation expenses. Non-GAAP net income (loss) attributable to the company is the net income (loss) attributable to the company that does not include share-based compensation expenses. Non-GAAP net income (loss) attributable to ordinary shareholders is the net income (loss) attributable to ordinary shareholders, excluding share-based incentive expenses. Non-GAAP basic and diluted net income (loss) per share is the non-GAAP net income (loss) attributable to ordinary shareholders divided by the weighted average number of ordinary shares used to calculate non-GAAP basic and diluted net income (loss)) per share Ordinary shares. The non-GAAP basic and diluted net income (loss) of each ADS is the non-GAAP net income (loss) attributable to ordinary shareholders divided by the weighted average number used to calculate the non-GAAP basic and diluted net income (loss). Non-GAAP adjustments will not have any tax implications because share-based compensation expenses cannot be deducted for income tax purposes.
The company believes that non-GAAP financial indicators help to identify potential trends in its business by excluding the impact of non-cash expenses and share-based compensation expenses. These indicators provide useful information about the company’s operating performance and enhance the overall understanding of the company’s past Performance and future prospects, and make the key indicators used by the company’s management in its financial and operational decisions more visible.
Non-GAAP financial measures should not be considered in isolation, nor should they be interpreted as operating income (loss), net income (loss) or any other performance indicators or indicators of the company’s operating performance. Investors are encouraged to compare historical non-GAAP financial measures with the most directly comparable GAAP measures. The non-GAAP financial measures provided here may not be comparable to similarly titled measures provided by other companies. Other companies may calculate similarly titled metrics in different ways, which limits their usefulness as comparative metrics for company data. We encourage investors and others to thoroughly review their financial information instead of relying on a single financial indicator. The end of this press release contains a reconciliation between the company's non-GAAP financial measures and the most directly comparable GAAP measure.
The company's business is mainly carried out in China and most of the revenue generated is denominated in Renminbi ("Renminbi"). This announcement contains the currency conversion between RMB amount and U.S. dollar ("US$") for the convenience of readers only. Unless otherwise stated, all conversions of RMB to USD are performed at the exchange rate of RMB 6.4434 to USD 1.00, which is the effective buying exchange rate at noon on September 30, 2021 as stipulated in the H.10 statistical release of the Federal Reserve Committee. It does not mean that the RMB amount may have been or may have been converted, realized or settled into USD at the exchange rate on September 30, 2021 or any other exchange rate.
This announcement contains forward-looking statements. These statements are made in accordance with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terms such as "will", "expected", "anticipated", "future" and other terms. "Intent", "plan", "believe", "estimate", "confident" and similar statements. Among other things, the business prospects and management quotes in this announcement, as well as Viomi's strategic and operating plans, all contain forward-looking statements. Viomi may also disclose to third parties in its periodic reports submitted to the US Securities and Exchange Commission ("SEC"), annual reports submitted to shareholders, press releases and other written materials, as well as by its officers, directors or employees. Statements that are not historical facts, including statements about company beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. Many factors may cause actual results to differ materially from those contained in any forward-looking statements, including but not limited to: the company’s growth strategy; cooperation with Xiaomi and recognition of the company’s brand; trends and competition in the global IoT smart home market ; Development and commercialization of new products, services and technologies; government policies and related regulatory environments related to the company’s industry and/or business operations and overall economic conditions in China and the world, as well as assumptions related to any of the above. More information about these and other risks is contained in the company's filings with the SEC. All information provided in this press release and attachments is as of the date of this press release. Except as required by applicable laws, the company assumes no obligation to update any forward-looking statements.
For investor and media inquiries, please contact:
Viomi Technology Co., Ltd Cecilia Li E-mail: [email protected]
The Piacente Group, Inc. Emilie Wu Tel: +86-21-6039-8363 E-mail: [email protected]
The Piacente Group, Inc. Brandi Piacente Phone: +1-212-481-2050 Email: [Email Protection]
Unaudited Condensed Consolidated Balance Sheet
(All amounts are in thousands, except for stock, ADS, per share and each ADS data)
Accounts and bills receivable from third parties (deducted provision of RMB 9,246 and RMB 28,628 on December 31, 2020 and September 30, 2021, respectively)
Accounts receivable from related parties (deducting the provisions of RMB 61 and RMB 332 as of December 31, 2020 and September 30, 2021, respectively)
Other accounts receivable from related parties (deducting the provision of RMB 9 and RMB 60 as of December 31, 2020 and September 30, 2021, respectively)
Prepaid expenses and other liquid assets
Prepaid expenses and other non-current assets
Real estate, plant and equipment, net
Amounts due to related parties
Accrued expenses and other liabilities
Lease liabilities due within one year
Accrued expenses and other liabilities
Unaudited Condensed Consolidated Balance Sheet (Continued)
(All amounts are in thousands, except for stock, ADS, per share and each ADS data)
Class A ordinary shares (par value of US$0.00001; 4,800,000,000 authorized shares; 104,163,686 shares and 107,381,750 shares issued and tradable as of December 31, 2020 and September 30, 2021, respectively)
Class B ordinary shares (face value of US$0.00001; 150,000,000 authorized shares; 103,554,546 shares and 103,314,546 shares issued and tradable as of December 31, 2020 and September 30, 2021, respectively)
Total equity attributable to shareholders of the company
Total liabilities and shareholders' equity
Unaudited Condensed Consolidated Statement
(All amounts are in thousands, except for stock, ADS, per share and each ADS data)
Cost of revenue (including the related party revenue of RMB 143,072 and RMB 7,690 for the three months ended September 30, 2020 and September 30, 2021, respectively)
Research and development expenses (including RMB 156 and RMB 690 with related parties for the three months ended September 30, 2020 and September 30, 2021, respectively)
Sales and marketing expenses (including RMB 23,210 and RMB 23,579 with related parties for the three months ended September 30, 2020 and September 30, 2021, respectively)
Interest income and short-term investment income, net
Income (loss) before income tax expenses
Less: Net profit attributable to non-controlling shareholders
Net profit (loss) attributable to ordinary shareholders of the company
Unaudited Condensed Consolidated Statement
(All amounts are in thousands, except for stock, ADS, per share and each ADS data)
Net profit (loss) attributable to the company
Other comprehensive (loss) income, net after tax
Total comprehensive income (loss) attributable to the company
Net income (loss) per share attributable to ordinary shareholders of the company
The weighted average number of common shares used to calculate the net income (loss) per share
Net income (loss) per ADS*
ADS weighted average used to calculate the net income (loss) of each ADS
*Each ADS represents 3 common shares.
(1) The distribution of share-based compensation in operating expenses is as follows:
Reconciliation of GAAP and non-GAAP results
(All amounts are in thousands, except for stock, ADS, per share and each ADS data)
Net profit (loss) attributable to the company
Non-GAAP net income (loss) attributable to the company
Net profit (loss) attributable to ordinary shareholders
Non-GAAP net income (loss) attributable to common shareholders
Non-GAAP net income (loss) per common share
The weighted average number of common shares used to calculate non-GAAP net income (loss) per share
Non-GAAP net income (loss) per ADS
ADS weighted average used to calculate the non-GAAP net income (loss) of each ADS
Note: Non-GAAP adjustments have no tax implications, as share-based compensation expenses cannot be deducted for income tax purposes.
Source: Viomi Technology Co., Ltd
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