Chinese firm Xiaomi’s profits soared to 347.5 million yuan ($56.7 million) in net profit last year, according to a regulatory filing, despite the fact the company resorted to very thin margins with its Redmi budget phones.
Established just four years ago, Xiaomi grew to become the third biggest smartphone maker after Apple and Samsung in the world. In India, Xiaomi kicked off flash sales on Flipkart since July and every Tuesday marked its online sales rage, except today owing to a court order stopping its sales after Ericsson moved the court alleging patent violations in Redmi Note phablet.
The filing was necessitated when Xiaomi bought 1.23 stake in Midea Group worth $200 million. Xiaomi spokeswoman Joy Han told Reuters that the filing of Xiaomi Inc. papers were true but refused to reveal further details saying, “Our holding structure is considered a commercial secret.”
Xiaomi has unleashed a price war all over Asia, where it is selling its budget phones with similar features and technological prowess as its rivals Samsung and Apple. Xiaomi has not entered the huge US market still and once its presence is there, the real picture will emerge about the company’s global standing.
Its nearest rival Samsung has reported an operating margin of 18.7% last year, whereas Apple reported 28.7% for its business year ending Sept. 2013. Xiaomi made the filing to the Shenzhen Stock Exchange as it invested in the Midea Group Co Ltd. buying 1.3% stake for 1.27 billion yuan ($200 million). Xiaomi Chairman and Chief Executive Lei Jun alone owns 77.8% ownership of the company that was set up in 2010.