Four Growth Engines in Place: Huami Technologies Enters Its Golden Era of Expansion

VCBeat (WeChat ID: vcbeat) has learned that on August 19, Huami Technology (NYSE: HMI), a global leader in smart wearable devices, released its financial report for the second quarter of 2019, delivering satisfactory results. The report showed that the company’s revenue in the second quarter reached RMB 1.0387 billion (USD 151.3 million), a year-on-year increase of 36.6%, with revenue exceeding expectations for two consecutive quarters. Shipments reached 8.3 million units, representing a year-on-year increase of over 50% (53.7%) from 5.4 million units in the second quarter of 2018; compared with the first quarter, the growth rate of shipments accelerated significantly.

Judging from the overall financial data for the first half of 2019, Huami also delivered impressive performance. Its revenue in the first half reached RMB 1.8383 billion (USD 267.8 million), a year-on-year increase of 36.6%. The net profit attributable to Huami Technology was RMB 164.6 million (USD 24 million), representing a year-on-year increase of over 60% (64.1%) compared with RMB 100.3 million in the first six months of 2018.

However, the biggest surprise in the financial report was the revenue forecast for the third quarter: Huami Technology expects its revenue to reach RMB 1.64 billion to RMB 1.67 billion, representing a year-on-year growth of 52.6% to 55.4% compared with RMB 1.07 billion in the third quarter of 2018.

This projected growth rate of over 50% marks a significant increase compared to the 36.6% rise recorded in the first half of this year. Growing evidence suggests that Huami Technology is entering a “golden age” of sustained high growth.

The primary driver of revenue growth in the second quarter was the strong performance of the Mi Band 4 and the company’s proprietary brands. Huang Wang revealed in the financial report that the new-generation Mi Band 4, released in the second quarter, achieved tremendous success, with its initial sales volume being the highest among all products in the series.

According to media reports, the Xiaomi Mi Band 4 created a sensation upon its release, with global shipments exceeding one million units within just eight days—an average of 5,000 units per hour—setting a new record for the fastest shipment rate in the history of the Xiaomi Mi Band series. In contrast, it took 17 days after launch for its predecessor, the Xiaomi Mi Band 3, to surpass the one-million-unit milestone. Compared to the previous generation, the Xiaomi Mi Band 4 not only delivers significant performance improvements but also integrates Xiaomi’s intelligent voice assistant, “Xiao Ai,” for the first time in its NFC-enabled version, thereby better supporting smart lifestyle scenarios.

During the earnings conference call, Huang Wang expressed strong confidence in the market appeal of the Mi Band. He stated that Huami would continue to replicate the successful model of the Mi Band and maintain close collaboration with Xiaomi on new products. “We will not change our long-term cooperation plan with Xiaomi and look forward to developing and producing more next-generation Mi Band products tailored to global niche markets and diverse customer segments.”

Huami Technology’s Chief Financial Officer (CFO), Cui Dawei, also confirmed during the conference call that the company is currently co-developing the Mi Band 5 with Xiaomi.

The continuous enrichment of the product line and the strong performance of its self-owned brand, AMAZFIT, were also significant factors driving Huami Technology’s revenue growth in the second quarter.

At the Summer 2019 New Product Launch Event on June 11, Huami Technology officially unveiled two flagship products targeting smart calling and health monitoring: the Amazfit Smartwatch 2 series, which supports standalone eSIM calling with all three major carriers and features a ceramic body and a 2.5D water-like display; and the Amazfit Health Watch, the first product in China’s mainstream smartwatch market to support ECG (electrocardiogram) monitoring. Both products are now commercially available and have attracted widespread attention.

In addition, Huami launched the Amazfit GTR series of smartwatches in July. The product perfectly blends traditional watch aesthetics with modern smart features, returning to a classic timepiece appearance while offering an ultra-long 24-day battery life and 12 professional sports modes. Coupled with the previously released Amazfit Smartwatch Youth Edition and Amazfit Mi Band Lite, Huami Technology was fully poised to capitalize on the burgeoning smartwatch market.

Huang Wang stated that Huami Technology has been continuously expanding and diversifying its product lineup. The multiple smartwatch models launched in late June and July have undergone changes and enhancements in design, functionality, and other aspects to cater to personalized customer needs. It is expected that Huami Technology will release more new Amazfit smartwatches in the coming months.

Globally, the emerging brand AMAZFIT is also gaining increasing favor among consumers. According to a recent independent market research report, the brand’s smartwatches currently rank fifth in global shipment volume.

As the world’s first AI chip in the field of smart wearables, “Huangshan No. 1” holds extraordinary significance for Huami Technology.

Not long ago, the Amazfit Huami Health Band (Huangshan-1 Edition) was officially released. This product is the first mass-produced device to adopt the Huangshan-1 chip. Leveraging algorithms such as its built-in RealBeats AI biometric data engine, it enables on-device biometric recognition, as well as real-time local detection of ECG and PPG arrhythmias. Also available on the market is the Amazfit Huami Health Watch, which similarly utilizes the Huangshan-1 chip. It is the first smartwatch in China’s mainstream market to support ECG monitoring and features standalone NB-IoT connectivity.

The official launch of these two products marks the true mass production and commercial deployment of the world’s first wearable AI chip. Coupled with the initial formation of Huami Technology’s medical and research teams and the commencement of VIP health services, this signifies the maturation of Huami’s “Chip + Device + Cloud” strategy.

In Huang Wang’s view, Huami has never been merely a smart hardware company. Instead, it aims to build a strategic closed loop integrating “chip, device, and cloud” by continuously innovating hardware technology, enhancing software experiences, leveraging its accumulation in the upstream semiconductor chip industry, and developing health cloud services. This approach fulfills its corporate mission of harnessing the power of technology to enable people worldwide to enjoy better sports, health, and medical services.

Leveraging innovative smart wearables to drive healthcare services offers immense potential. According to Morgan Stanley’s statistics, the global healthcare market reached $7.523 trillion in 2017, nearly six times the size of the smartphone market that year.

Huami Technology continues to increase its investment in brand and marketing, helping its proprietary brand AMAZFIT achieve broader global recognition.

By the end of 2018, Huami Technology’s AMAZFIT branded products had entered more than 60 countries and regions worldwide, including the United States, Japan, and Germany.

In the first half of this year, Huami Technology achieved a milestone breakthrough in its globalization efforts: the proportion of overseas shipments exceeded 50% for the first time, reaching 51.3%. Last year, this figure stood at 44.2%.

Currently, in addition to leveraging e-commerce channels for overseas sales, Huami Technology is actively expanding its offline distribution network and participating in major technology exhibitions to further enhance brand visibility and strengthen channel penetration.

“We believe that sustained investment, strong alliances, improved operational efficiency, and continuous expansion in the global market will help us achieve healthy growth and robust financial performance, both in the short and long term,” emphasized Huang Wang, Chairman and CEO of Huami Technology. He noted that Huami Technology’s growth strategy is firmly in place, driven by international expansion, product diversification, and especially new product launches. “We have full confidence in the second half of 2019.”