SHANGHAI (Reuters) - Chinese smartphone maker Xiaomi Corp ( 1810.HK ) posted a record fall in fourth-quarter revenue on Friday as the company recovers from a slowdown in consumption and disruptions related to China's coronavirus lockdown.
Early indications suggest China's economy will recover slowly as consumers remain cautious about spending despite the easing of restrictions on domestic and international travel.
Speaking about the company's earnings, Xiaomi Group President Lu Weibing noted that the Chinese consumer electronics industry is currently showing the first signs of recovery, but "it will take some time."
He added that the year-on-year decline could continue in the first half before recovering.
Xiaomi's sales in the fourth quarter of 2022 reached 66.05 billion yuan ($9.6 billion), down 22.8 percent from 85.58 billion yuan last year.
The numbers slightly beat analysts' expectations, but they mark the company's fourth consecutive decline in revenue and the steepest on record.
Net income for the period fell to 1.46 billion yuan, down 67.3% from 4.473 billion yuan last year.
The company's revenue in 2022 was 280.04 billion yuan, down 14.7%, and net profit was 8.52 billion yuan, down 61.4%. Both figures were lower than analysts' expectations.
Overall consumption in China shrank across most product categories in the fourth quarter as the sudden lifting of strict restrictions on the new coronavirus led to a rapid spread of infections across the country.
All major smartphone brands in China saw sales decline during this period, according to research firm Canalys. However, Xiaomi suffered the most, with shipments down 37% year-on-year, according to Canalys.
Smartphone sales in China hit an all-time low in 2022, falling 14% to 287 million units, according to data from Canalys. Shipments fell below 300 million units for the first time in a decade.
Xiaomi is also struggling in India, where it lost out on a growing consumer preference for high-end devices and lost its spot as the best-selling phone brand to South Korea's Samsung ( 005930.KS ) in the fourth quarter.
The company, along with its competitors, could face new security investigations by Indian authorities over national security concerns about pre-installed apps.
India is Xiaomi's largest overseas market and the second largest smartphone market in the world.
Xiaomi also produces electric cars. The company said on Friday that it is on track to mass-produce its first cars in the first half of 2024.
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