Shares in Huami Corp. (NYSE: HMI) increased more than 8 percent, closing at $7.95 apiece Monday on its strong quarterly revenue and its product diversification plan.
The smart wearable technology firm saw its revenue for the first quarter reach $119.1 million with a 37 percent increase from the same period of 2018. The company, a partner of smartphone giant Xiaomi Corp. (HKEX: 1810), attributed its growth to the segment of Xiaomi wearable products and self-branded Amazfit products.
Huami self-branded products showed a 62 percent increase in revenue compared with the first quarter of 2018, and contributed 41 percent of total revenues in the first quarter.
“In the first quarter, with enhancements to and the expansion of, our overseas sales channels and strategies, international version product shipments continued climbing,” Wang Huang, the chief executive officer of Huami said.
The quarterly net income gained 3 percent at $14.2 million, or 22 cents per American depositary share, according to the report. Huami shipped 5.6 million units of products with 17 percent increase, compared with amount of 4.8 million in the first quarter of 2018.
Apart from its smart wristwatches, Huami is known for its exclusive cooperation with Xiaomi. Because smartwatches labeled as Xiaomi are manufactured by Huami.
Xiaomi is Huami's sole customer and holds a 19.3 percent stake in the company according the the Huami prospectus. “Our well-established strategic partnerships remain strong and stable,” Huang said.
Huami said the company had already started to negotiate deep collaboration with a world-class watchmaker, Timex Group USA, Inc., which is headquartered in Middlebury, Connecticut in the field of wristwatches.
“So the benefit for Huami obviously is that we will roll out multiple models of Timex branded and potentially co-branded smartwatches,” Mike Yeung, the chief operation officer of Huami, said. He added that Huami would potentially use multiple brands that's under Timex control, such as Guess.
“We continued the diversification of our product line, specifically with our self-branded products,” David Cui, the chief financial officer of Huami, said.
The company also announced to launch multiple models of Amazfit watches with full Amazon Alexa integration covering different market demands and price ranges. Huami sought cooperation with the U.S. market.
“In the U.S., we already have reviews with famous off-line sales channels such as - via Best Buy,” Cui said in the conference call Monday. Huami’s investors includes a trio of U.S. venture capital firms of Sequoia Capital, Morningside Venture Capital and Banyan Capital in series B funding, with funds totaling $35 million.
Looking forward, the company said in the release Monday that it expects its net revenues to be between approximately $144 million to $146 million, or year-over-year increase of approximately 30 percent to 33 percent for the second quarter of 2018.