Smartphones may be as good as it gets for Xiaomi. Revenue at the $32 billion Chinese group's handset unit grew a tad in the most recent quarter despite shrinking global demand for mobile devices. But a push into internet services has been disappointing: Boss Lei Jun is struggling to wring more money out of its evergrowing number of users.
Even as top-line growth slows, Tuesday's results show resilience in Xiaomi's core. The company's flagship Mi 9 phone and other models eked out 5% year-on-year increase in revenue for the three months to June. India remained a bright spot: Xiaomi has fended off compatriot Huawei and the $240 billion Samsung Electronics to retain a leading 28% market share, according to research firm IDC. Xiaomi's other gadgets, including electric scooters, air conditioners and internet-connected TVs, also helped the company swing to an overall operating profit from a loss a year earlier.
Investors are losing faith. Xiaomi has lost more than half its market value since its shares peaked in July 2018. But the stock still trades at some 15 times forward earnings, Refinitiv data shows, above the roughly 10 times electronics peers like PC-maker Lenovo and appliance specialist Haier Electronics fetch.