华米公司 (HMI) 首席执行官黄旺在 2019年 第一季度业绩 - 盈利电话会议记录

[机器翻译] 电话会议 · 2019年06月04日 · 67 次阅读

Huami Corporation (NYSE:HMI) Q1 2019 Results Earnings Conference Call June 3, 2019 8:00 AM ET

华米公司(纽约证券交易所代码:[HMI])2019年第一季度业绩收益电话会议2019年6月3日美国东部时间上午8:00

公司参与者

Grace Zhang - Director of IR
Huang Wang - Founder, Chairman & CEO
David Cui - CFO
Mike Yeung - COO

  • Grace Zhang - IR主任
  • 黄旺 - 创始人,董事长兼首席执行官
  • David Cui - 首席财务官
  • Mike Yeung - 首席运营官

电话会议参与者

Kyna Wong - Credit Suisse
Arthur Lai - Citi
Robert Cowell - 86Research

  • Kyna Wong - 瑞士信贷
  • 亚瑟莱 - 花旗
  • Robert Cowell - 86Research

会议主持员

Hello, ladies and gentlemen. Thank you for standing by for Huami Corporation First Quarter 2019 Earnings Conference Call. At this time, all participants are in listen-only mode. Today’s conference call is being recorded.
I will now turn the call over to your host, Ms. Grace Zhang, Director of Investor Relations for Huami Corporation. Please go ahead, Grace.

你好,女士们,先生们。 感谢您支持华米公司2019年第一季度收益电话会议。 此时,所有参与者都处于只听模式。 今天的电话会议正在录制中。

我现在将电话转交给主持人,华米公司投资者关系总监Grace Zhang女士。 请继续,格蕾丝。

Grace Zhang

Hello, everyone, and welcome to Huami Corporation first quarter 2019 earnings conference call. The company's financial and operating results were issued in our press release via newswire services earlier today and are posted online. You can also view the earnings press release and the slides to which we will refer on this call by visiting the IR section of the company's website at www.huami.com/investor.
Participating in today's call are Mr. Huang Wang, our Chairman of the Board of Directors and Chief Executive Officer; and Mr. David Cui, our Chief Financial Officer. The company's management will begin with prepared remarks, and the call will conclude with a Q&A session. Mr. Mike Yeung, our Chief Operating Officer, will join us for the Q&A session.
Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provision of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the views expressed today. Further information regarding this and other risks and uncertainties is included in the company's annual report on Form 20-F for the fiscal year ended December 31, 2018, and other filings as filed with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements except as required under applicable law.
Please also note that Huami's earnings press release and this conference call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. Huami's press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures.
I'll now turn the call over to our CEO, Mr. Huang Wang. Please go ahead.

各位大家好,欢迎来华米公司2019年第一季度财报电话会议。该公司的财务和经营业绩于今天早些时候通过新闻专线服务在我们的新闻稿中发布,并在线发布。您还可以访问公司网站www.huami.com/investor的IR部分查看收益新闻稿以及我们将在此次电话会议中提及的幻灯片。

参与今天的电话会议的是董事会主席兼首席执行官黄旺先生

黄王

Hello, everyone. Thank you for joining our earnings conference call today. After a successful 2018, strong revenue momentum and sustained profitability continued in the first quarter, reflecting the increasing leveraging of our rising global brand recognition, strategy relationships and customer trust. We are pleased to report another strong quarter with top line result of RMB799.6 million, which represents a 36.5% increase compared to the Q1 2018.
We are delighted to share that during the first quarter of 2019, our Amazfit smartwatch product shipments ranked fifth globally. According to a recent report published by Counterpoint Research, a well-respected global industry analysis firm, during this quarter, total shipments of Amazfit smartwatch products grew 71.3% compared to Q1 2018. It's very clear our leadership in this segment is strengthening.
We believe this growth momentum is sustainable and has improvement potential as we plan to launch multiple Amazfit watch products soon this year covering different price range and the stand-alone communication functions, which we just co-announced with Qualcomm Technologies this morning as well as improved health care and sports features.
Speaking of Amazfit, our products are designed and manufactured to attract the middle to high-end market and committing to experience strong growth. In Q1, our self-branded product and other contributed 41.3% of our total revenues. This enhancement and expansion of our overseas self-distribution channels sales force strategies and brand recognition in the international shipment continue to climb.
In January, we announced our strategic collaboration with McLaren Applied Technologies to develop co-branded wearable smart products that will provide users with a comprehensive view of their biometric and activity data.
In the meantime, our team is diligently working closely with Timex Group to develop products through the partnership we established late last year. Our COO, Mike, and I recently had a meeting with Timex CEO and his management team in their headquarters in Middlebury, Connecticut.
We adjusted the R&D details of our first joint effort products nearing completion and the deep collaboration of Timex full product line. In addition, we also discussed the full product lines US marketing strategy and the working schedule, as well as explore how Timex's strong off-line channels can help strengthen our Amazfit brand in emerging markets, such as India. We have full confidence in our collaboration effort with the Timex Group and are excited to be moving forward with them on multiple fronts.
In the first quarter, we also broadened our IoT life scenarios. Our NFC versions of Huami products now have public transportation connectivities capabilities in over 200 cities in China. Furthermore, Amazfit products are now upgraded with full Amazon Alexa integration, allowing users all the normal functionalities of the voice assistant.
With our achievements in the first quarter, we are excited to continue developing and introducing new products and services, expanding our presence in global markets and further developing our strategic partnership initiatives.

大家好。感谢您今天加入我们的收益电话会议。 2018年成功后,第一季度强劲的收入增长势头和持续盈利能力持续增长,这反映了我们对全球品牌认知度,战略关系和客户信任度的不断提升。我们很高兴报告另一个强劲的季度,最高收入为人民币799.6百万元,与2018年第一季度相比增长了36.5%。

我们很高兴与大家分享,在2019年第一季度,我们的Amazfit智能手表产品出货量在全球排名第五。根据全球行业分析公司Counterpoint Research最近发布的一份报告,本季度Amazfit智能手表产品的总出货量比2018年第一季度增长了71.3%。很明显,我们在这一领域的领导地位正在加强。

我们相信这种增长势头是可持续的并具有改进潜力,因为我们计划在今年推出多款Amazfit手表产品,涵盖不同价格范围和独立通讯功能,我们今天早上与Qualcomm Technologies共同宣布并改进保健和运动功能。

说到Amazfit,我们的产品经过精心设计和制造,以吸引中高端市场并致力于实现强劲增长。在第一季度,我们的自有品牌产品和其他产品占我们总收入的41.3%。这种增强和扩展我们的海外自营渠道销售力量战略和在国际货运中的品牌认知度不断攀升。

1月,我们宣布与迈凯轮应用技术公司展开战略合作,开发联合品牌可穿戴智能产品,为用户提供全面的生物识别和活动数据视图。

与此同时,我们的团队正在努力与Timex集团密切合作,通过我们去年年底建立的合作伙伴关系来开发产品。我们的首席运营官Mike和我最近在康涅狄格州Middlebury的总部与Timex首席执行官及其管理团队会面。

我们调整了我们的第一批联合产品的研发细节即将完成以及Timex全系列产品的深度合作。此外,我们还讨论了美国营销策略和工作时间表的全部产品线,以及探索Timex强大的离线渠道如何帮助加强我们在新兴市场(如印度)的Amazfit品牌。我们对与Timex集团的合作充满信心,并很高兴能够在多个方面与他们共同前进。

在第一季度,我们还拓宽了物联网生活场景。我们的NFC版本华米产品现在在中国200多个城市拥有公共交通连接功能。此外,Amazfit产品现已升级为完整的Amazon Alexa集成,允许用户使用语音助手的所有常规功能。

凭借我们在第一季度取得的成就,我们很高兴继续开发和推出新产品和服务,扩大我们在全球市场的影响力,并进一步发展我们的战略合作伙伴计划。

Last but certainly not least, our relationship with Xiaomi remains strong and stable, and we look forward to launching the Mi Band 4 in two weeks. Based on the market data we gathered, we are very confident about the upcoming launch to capitalize on this product's popularity. We already have millions of new Mi Band 4s ready to ship on the official launch date.
Our long-term plan with Xiaomi and the popular Mi Band series includes producing future generations of the current band product line, such as Mi Band 5, as well as various other models targeting different market segments in both high end and the low end market globally.
At the same time, our Amazfit products are riding the wave of the rapidly rising global smartwatch market. In the next few months, we will launch more than 10 models of Amazfit watch covering different market demands and with prices ranging from RMB299 to RMB2000.
Our long-term strategy is clear and with conviction. We look forward to the rest of 2019 with full confidence. And we believe we will deliver long-term value to our stakeholders.
Thank you again for joining today. I will now turn the call over to our CFO, David Cui.

最后但同样重要的是,我们与小米的关系仍然强劲而稳定,我们期待在两周内推出Mi Band 4。根据我们收集的市场数据,我们对即将推出的产品非常有信心,以利用该产品的受欢迎程度。我们已经有数百万的新Mi Band 4准备在正式发布之日发货。

我们与小米和流行的Mi Band系列的长期计划包括生产当前乐队产品系列的未来几代产品,如Mi Band 5,以及针对全球高端和低端市场不同细分市场的各种其他型号。

与此同时,我们的Amazfit产品正在迅速崛起的全球智能手表市场掀起波澜。未来几个月,我们将推出10多款Amazfit手表,涵盖不同的市场需求,价格从人民币299元到2000元不等。

我们的长期战略是明确的,有信心的。我们充满信心地期待2019年剩下的时间。我们相信,我们将为利益相关者提供长期价值。

再次感谢您今天加入。我现在将把这个电话转给我们的首席财务官David Cui。

David Cui

Thank you, Huang. The company continues its growth momentum with strong year-over-year revenue growth, represented by a 36.5% increase over Q1 2018. Our growth was mainly attributable to global market expansion and overall increased brand recognition.
Our results demonstrate the resiliency of our business model, the strong market appeal of our products and the focus of our management team, all despite uncertainties surrounding macroeconomic trade factors.
Looking at how we started the year and are now looking ahead, we feel we are well positioned to continue delivering sustainable growth through creative alliances, global expansion, operational leverage and operational efficiencies.
In 2019, we are laser-focused on developing and delivering new products, especially those in our self-branded products and others, which as Huang just mentioned, accounted for 41.3% of total revenues in Q1. We plan to continue delivering popular products in both our Amazfit line and with the products we develop with various partners, such as Xiaomi and Timex.
Finally, with the enhancement and expansion of our overseas sales distribution channels, sales force strategies and brand recognition, we anticipate international shipments to accelerate.
And so the lens of this call, I'll highlight the key financial measures for the first quarter 2019, and encourage you to refer to our earnings press release for further details regarding our financial results. Now here are some of the highlights of our very strong first quarter.
Revenues increased by 36.5% to RMB799.6 million from RMB585.9 million for the first quarter of 2018 due to an increase in the sales of both Amazfit products and Xiaomi wearable products, driven by the strong market appeal of our products and our global brand recognition.
Our gross profit increased significantly by 48.3% to RMB217.5 million from RMB146.7 million for the first quarter of 2018. Our gross margin of 27.2% reflected a favorable improvement from our gross margin of 25% in the first quarter of 2018.
The increase, aside from economy of scale, was driven by two main drivers: First, we are positioning Amazfit-branded wearables to target a higher-income demographic compared with Xiaomi wearable products. So our Amazfit-branded wearables generally carry a higher average selling price. As our sales mix changes with the record sales growth of our Amazfit self-branded products, higher gross margins ensue.
The second driver is continuous improvement in supply chain management. Strong supply chain management has always been a hallmark of our operations, and we are continually working to find ways to make it even better.
In 2018, we consolidated and streamlined our logistics and supply network activities by establishing a dedicated supply chain management office in Shenzhen. Here, our relevant teams are under one roof. The ease and speed of communication among teams has further improved our operational efficiency.
Now move to - move on to expenses. Total operating expenses increased by only 1.5% to RMB139.9 million from RMB137.8 million for the first quarter of 2018. Research and development expenses decreased by 2% to RMB72.4 million from RMB73.8 million for the first quarter of 2018, primarily due to a decrease in share-based compensation expenses, which was offset by an increase in personnel related R&D expenses.

谢谢你,黄。公司继续保持增长势头,同比增长强劲,比2018年第一季度增长36.5%。我们的增长主要归功于全球市场扩张和整体品牌知名度的提升。

我们的结果证明了我们的业务模式的弹性,我们产品的强大市场吸引力以及我们管理团队的重点,尽管存在宏观经济贸易因素的不确定性。

看看我们今年如何开始,现在展望未来,我们认为我们已准备好通过创意联盟,全球扩张,运营杠杆和运营效率继续实现可持续增长。

2019年,我们专注于开发和交付新产品,特别是我们的自有品牌产品和其他产品,正如Huang刚刚提到的那样,它们占第一季度总收入的41.3%。我们计划继续在我们的Amazfit系列产品中推出受欢迎的产品,以及我们与各种合作伙伴(如Xiaomi和Timex)共同开发的产品。

最后,随着我们海外销售分销渠道,销售人员战略和品牌认知度的提升和扩大,我们预计国际出货量将加速增长。

因此,本次电话会议的镜头,我将重点介绍2019年第一季度的主要财务指标,并鼓励您参考我们的盈利新闻稿,了解有关我们财务业绩的更多详情。现在,这是我们非常强劲的第一季度的一些亮点。

由于我们的产品和我们的全球品牌的强大市场吸引力,Amazfit产品和小米可穿戴产品的销售增加,收入由2018年第一季度的人民币585.9百万元增加36.5%至人民币799.6百万元承认。

我们的毛利从2018年第一季度的人民币146.7百万元大幅增加48.3%至人民币217.5百万元。我们的毛利率为27.2%,反映我们2018年第一季度的毛利率为25%有利改善。

除了规模经济之外,这一增长主要受两个驱动因素驱动:首先,与小米可穿戴产品相比,我们将Amazfit品牌的可穿戴设备定位于高收入人群。因此,我们的Amazfit品牌可穿戴设备通常具有更高的平均售价。随着我们的销售组合随着我们的Amazfit自有品牌产品的销售增长创纪录而变化,随之而来的是更高的毛利率。

第二个驱动因素是供应链管理的持续改进。强大的供应链管理一直是我们运营的标志,我们一直在努力寻找使其更好的方法。

2018年,我们通过在深圳建立专门的供应链管理办公室,巩固和简化了我们的物流和供应网络活动。在这里,我们的相关团队在同一个屋檐下。团队之间沟通的便捷性和速度进一步提高了我们的运营效率。

现在转向 - 继续开支。营业费用总额由2018年第一季度的人民币137.8百万元增加1.5%至人民币139.9百万元。研发费用由2018年第一季度的人民币73.8百万元减少2%至人民币72.4百万元,主要是由于股票薪酬支出的减少,这与人员相关的研发费用增加所抵消。

It’s important to recognize here that these R&D expenses represent the investment in the development and the refinement of new technologies. We believe that this type of investment is critical and will deliver further benefit.
For instance, we are developing algorithms to monitor both heart rate and the blood oxygen level, which will form the basis to growing functionalities and broaden application scenarios for many of our health tech wearable products. This level of technology development requires an appropriate level of infrastructure and resource commitment.
Our general and administrative expenses decreased by 8.1% to RMB45.3 million from RMB49.3 million for the first quarter of 2018, primarily due to a decrease in stock-based compensation expenses, which was offset by an increase in personnel-related expenses.
As our total revenues and sheer volume of products sold have continued to increase, our selling and marketing expenses have naturally also increased. Selling and marketing expenses increased by 50.5% to RMB22.2 million from RMB14.7 million for the first quarter of 2018, primarily due to an increase in personnel-related expenses and increase in advertising and promotional expenses, specifically for self-branded products.
Our income before income tax grew significantly reaching RMB85.6 million compared with RMB16.5 million for the first quarter of 2018. Of course, as a natural consequence, our income tax expenses also increased and were RMB10.7 million compared with RMB2.7 million for Q1 2018.
This brings us to net income attributable to Huami Corporation, which totaled RMB75.3 million compared with RMB14.8 million for the first quarter of 2018. Net income attributable to ordinary shareholders of Huami Corporation increased to RMB74.1 million.
Further down the P&L, basic and diluted net income per ADS attributable to ordinary shareholders of Huami Corporation was RMB1.25 and RMB1.18, respectively. As a reminder, each ADS represents 4 Class A ordinary shares.
Next, adjusted net income attributable to Huami Corporation, which excludes share-based compensation expenses, increased by 2.7% to RMB95.0 million from RMB92.5 million for Q1 '18.
Finally, adjusted basic and diluted net income per ADS attributable to ordinary shareholders of Huami Corporation was RMB1.57 and RMB1.49, respectively. Relating to cash, as of March 31, 2019, the company had cash and cash equivalents of RMB1.57 billion compared with RMB1.44 billion as of the end of 2018.
And now to our outlook, looking ahead to the second quarter 2019, management currently expects net revenues to be between RMB990 million and RMB1.01 billion, which would represent an increase of approximately 30.2% to 32.9% from RMB760.1 million for the second quarter of 2018.
This concludes our prepared remarks. We will now open the call to questions. Operator, please go ahead.

重要的是要认识到这些研发费用代表了对新技术的开发和改进的投资。我们相信这种投资至关重要,并将带来更多好处。

例如,我们正在开发用于监测心率和血氧水平的算法,这将成为我们许多健康技术可穿戴产品不断增长的功能和拓宽应用场景的基础。这种技术开发水平需要适当水平的基础设施和资源承诺。

我们的一般及行政开支由2018年第一季的人民币49.3百万元减少8.1%至人民币45.3百万元,主要由于股票薪酬开支减少,而人事相关开支则增加所抵销。

由于我们的总收入和销售产品的数量持续增加,我们的销售和营销费用自然也增加了。销售及营销开支由2018年第一季的人民币14.7百万元增加50.5%至人民币22.2百万元,主要由于人事相关开支增加及广告及推广开支增加,特别是自有品牌产品。

我们的所得税前收入大幅增长至人民币85.6百万元,而2018年第一季度为人民币16.5百万元。当然,我们的所得税费用也增加了人民币1.07百万元,而人民币汇率为人民币2.7元。 2018年第一季度的百万

这使我们归属于华米公司的净收入,总计为人民币75.3百万元,而2018年第一季度为人民币14.8百万元。归属于华米公司普通股股东的净利润增加至人民币7,410万元。

在损益表中,华米公司普通股股东应占每股美国存托凭证的基本和摊薄净收益分别为人民币1.25元和人民币1.18元。提醒一下,每个ADS代表4个A类普通股。

其次,归属于华米公司的调整后净收入(不包括股权奖励支出)从18年第一季度的人民币92.5百万元增加2.7%至人民币95.0百万元。

最后,华米公司普通股股东应占每股ADS的调整后基本和摊薄净收益分别为人民币1.57元和人民币1.49元。与现金相关,截至2019年3月31日,公司的现金和现金等价物为人民币15.7亿元,而截至2018年底为人民币14.4亿元。

现在看来,展望2019年第二季度,管理层目前预计净收入在人民币990万元至人民币10亿元之间,较第二季度人民币760.1百万元增加约30.2%至32.9%。 2018年的一季度。

以上是我们准备的评论。我们现在打开问题的电话。接线员,请继续。

问答环节

Thank you. [Operator Instructions] Our first question today comes from [indiscernible] with CIBC. Please go ahead.

谢谢。 [操作员说明]我们今天的第一个问题来自于[音频不清晰]与CIBC。 请继续。

身份不明的分析师

[Foreign Language] Thank you for taking my question. I have one quick question. Since you just mentioned Huami has announced to cooperate with Timex, which is a leading world-class watchmaker, I'm interesting what this cooperation benefit our business for short term and long term. Could you please tell me more detail about this impressing corporation? Thank you.

[外语]感谢您提出我的问题。 我有一个简单的问题。 自从您刚刚提到Huami宣布与世界领先的制表商Timex合作之后,我很有意思这项合作对我们的短期和长期业务有何益处。 你能告诉我关于这个令人印象深刻的公司的更多细节吗? 谢谢。

Mike Yeung

Hi. This is Mike Yeung. I'm the COO of the company. Let me answer this question. So as our CEO, Wang, mentioned, he and I went - met with the, just recently, met with Timex this year, management in US. And it was a very, very positive and constructive meeting.
So the benefit for Huami obviously is that we will roll out multiple models of Timex branded and potentially co-branded smartwatches. And the first of these models, we target to release later this year. And we will also have not only multiple models, but also potentially use multiple brands that's under Timex control, such as, for example, GUESS is also a watch brand that is owned by Timex.
So we will roll out our multiple models, multiple brands. And we will sell not just in the US but also worldwide as well. And especially we can also leverage Timex sales and marketing channel online and off-line.
For example, Timex has a huge off-line channel infrastructure in India. And for example, that's something that Huami can leverage by having those channels to potentially sell Amazfit brand, our self-branded products as well in addition to the Timex-branded products.
And also this partnership will help us not only sell more devices but it will also generate a lot more data that we can potentially use for data and services monetization. Well, yes, so that's the - answers your question.

你好。这是Mike Yeung。我是公司的首席运营官。让我回答这个问题。因此,正如我们的首席执行官王先生提到的那样,他和我去了 - 就在最近,与美国管理层今年会见了Timex。这是一次非常非常积极和建设性的会议。

因此,华米的好处显然是我们将推出多种型号的Timex品牌和潜在的联合品牌智能手表。而这些模型中的第一个,我们的目标是在今年晚些时候发布。我们不仅拥有多个型号,而且还可能使用Timex控制下的多个品牌,例如,GUESS也是Timex旗下的手表品牌。

因此,我们将推出多个品牌,多个品牌。我们不仅会在美国销售,也会在全球范围内销售。特别是我们还可以在线和离线利用Timex销售和营销渠道。

例如,Timex在印度拥有庞大的离线渠道基础设施。例如,除了Timex品牌的产品之外,Huami可以利用这些渠道来销售Amazfit品牌,我们的自有品牌产品。

而且这种合作伙伴关系不仅可以帮助我们销售更多设备,还可以生成更多可用于数据和服务货币化的数据。嗯,是的,所以这就是 - 回答你的问题。

身份不明的分析师

Thank you very much.

非常感谢你。

会议主持员

Our next question today comes from Kyna Wong from Credit Suisse. Please go ahead.

我们今天的下一个问题来自Credit Suisse的Kyna Wong。 请继续。

Kyna Wong

Hello. Mr. Huang and David. Thanks for taking my questions and yeah, this is my first time to dial in and ask the questions. So actually I wanted to check by the implications from your recent trade dispute that is escalating and the impact to the company, like if the wearables have in the mix [ph] tariff list. And besides, I think investor also concerned about the - any risk in getting the band or the reliance in the US content in your products, et cetera. So this is my first question.

你好。 黄先生和大卫。 感谢您提出我的问题,是的,这是我第一次拨入并提出问题。 所以实际上我想检查一下您最近的贸易争端的影响,这些影响正在升级并对公司产生影响,就像可穿戴设备在混合[关税]清单中一样。 此外,我认为投资者也关注 - 在获得乐队或在产品中依赖美国内容的任何风险,等等。 所以这是我的第一个问题。

David Cui

David. I'll answer your question. First of all, our sales to the US market only represents a very small portion of our total revenues. It's very insignificant at this moment. And we also check that even for this small amount of sales, we are not on the tariff target list.
So far is a zero tariff on our products so far. And we do not source that much from the US also on our - for our components, and we do not rely on any US technology that are embedded in our products. So basically in conclusion that we are not so for impacted that much by the current trade situation.

大卫。 我会回答你的问题。 首先,我们对美国市场的销售仅占我们总收入的很小一部分。 这一刻它非常微不足道。 我们还检查即使是这么少的销售额,我们也不在关税目标清单上。

到目前为止,我们的产品到目前为止是零关税。 而且,对于我们的组件,我们也没有从美国采购那么多 - 我们的组件,我们不依赖于我们产品中嵌入的任何美国技术。 所以基本上总的来说,我们并不是因为当前的贸易形势而受到如此大的影响。

Kyna Wong

Thank you. My next question is about the ASP trend. Along with the increase of the sales contributions from Amazfit, your own brand wearables partners, so we should assume that the brand average will come into raising trend or I should also take into account how much the Mi Bands will come into different seasonality this year. And another questions is about the ForEx [ph] impact, if they will also bring into your consideration in the ASP and also the gross margin in the coming quarters? Thanks.

谢谢。 我的下一个问题是ASP趋势。 随着Amazfit销售贡献的增加,您自己的品牌可穿戴合作伙伴,因此我们应该假设品牌平均值将会提升趋势,或者我还应该考虑到Mi Bands今年会有多少季节性变化。 另外一个问题是关于ForEx [ph]影响,如果它们也会引入您在ASP中的考虑以及未来几个季度的毛利率? 谢谢。

David Cui

So the ASP, right. The ASP for Amazfit products, as our CEO just mentioned, that we will launch multiple products later in this year. The retail price range from 200 to 2,000, and we believe the ASP trend should trend up. And because our current ASP is about only 400, so the ASP should trend up.
In terms of the gross margin on our own product, so, so far our strategy is to acquire more market share and grow faster in terms of total shipments and revenues. And that's our priority. And of course, we also maintain or slightly improve our gross margin on our self-branded products.
In terms of the gross margin on Mi Band, future generation Mi Band, and again, we will discuss this with Xiaomi. We will jointly determine our product marketing strategies and the retail price that could impact our gross margin.
Typically again, in the year of launching new products and the margin may fluctuate. But in the long run, we will achieve a higher margin and as our goal, given that the product, the revenue mix will change towards more Amazfit products, which has much higher gross margin as compared to Mi Band. So in the long run, we should have very promising gross margin, yes.

所以ASP,对吧。正如我们的首席执行官刚刚提到的,Amazfit产品的ASP将在今年晚些时候推出多款产品。零售价格从200到2,000不等,我们认为平均售价趋势应该会上升。而且因为我们目前的平均售价仅为400,所以平均售价应该会上升。

就我们自己的产品的毛利率而言,到目前为止,我们的策略是获得更多的市场份额,并在总出货量和收入方面增长更快。这是我们的首要任务。当然,我们也维持或略微提高我们的自有品牌产品的毛利率。

就Mi Band,未来一代Mi Band的毛利率而言,我们将再次与小米讨论这个问题。我们将共同确定可能影响我们毛利率的产品营销策略和零售价格。

通常情况下,在推出新产品的那一年,保证金可能会波动。但从长远来看,我们将实现更高的利润率,并且作为我们的目标,鉴于产品,收入组合将转向更多Amazfit产品,与Mi Band相比,其毛利率更高。所以从长远来看,我们应该有非常有希望的毛利率,是的。

Kyna Wong

Thank you.

谢谢。

会议主持员

Our next question today comes from Arthur Lai with Citi. Please go ahead.

我们今天的下一个问题来自亚瑟莱与花旗。 请继续。

Arthur Lai

[Foreign Language] And so I will translate my question. Number one is the impact from the - if the US ban on the new component has a implication to you [indiscernible] if Huawei can share its potential Xiaomi smartphone market has a impact to you. That's it on my part. Thank you.

[外语]所以我会翻译我的问题。 排名第一的是 - 如果美国对新组件的禁令对您有意义[音频不清晰]华为可以分享其潜力小米智能手机市场对您有影响。 这就是我的意思。 谢谢。

David Cui

Okay. Thank you, Arthur, for your question. For your first question, I mentioned earlier that we source globally but we - the percentage of US components is relatively small, so the impact is not that material. And in terms of IP, in terms of technology, we do not rely on US technology. So that's the first question.
The second question is regarding the changes in the smartphone industry in term - the impact to Huawei. And I would say that at least for the smartwatch market segment, we still see significant growth potential based on the independent market research institutions' report, that the market still have 26% CAGR in the next 5 years. So we still expect that our product sales will at least grow - ride the wave of the market increase.
And in terms of the overseas market, while Huawei we may be impacted, but we are not impacted. Our global sales strategy is not just covering the US market, which is one of our primary target markets. And we - but also our primary market includes Southeast Asia and European countries, it's a global strategy. So we will say we are not impacted, and we still anticipated significant growth in the year and the year to come globally.

好的。亚瑟,谢谢你的提问。对于你的第一个问题,我之前提到我们在全球采购,但我们 - 美国组件的百分比相对较小,因此影响不是那么重要。就IP而言,在技术方面,我们不依赖于美国的技术。这是第一个问题。

第二个问题是关于智能手机行业的变化 - 对华为的影响。我想说,至少对于智能手表市场,我们仍然看到基于独立市场研究机构报告的显着增长潜力,未来5年市场仍有26%的复合年增长率。所以我们仍然期望我们的产品销售至少会增长 - 乘以市场增长的浪潮。

而就海外市场而言,虽然华为可能会受到影响,但我们并未受到影响。我们的全球销售策略不仅涵盖美国市场,而美国市场也是我们的主要目标市场之一。我们 - 我们的主要市场包括东南亚和欧洲国家,这是一个全球战略。因此,我们会说我们没有受到影响,我们仍然预计今年和全球将出现显着增长。

Arthur Lai

Thank you, David.

谢谢你,大卫。

会议主持员

Our next question today comes from Ian Lau [ph] with Industrial Securities. Please go ahead.

我们今天的下一个问题来自工业证券的Ian Lau [ph]。 请继续。

身份不明的分析师

Hi, Thanks for taking the question I heard about your new product launch, which you held yesterday. Just a quick question about your product launch plan the year. So what is the new product for the Q2 and Q3? And how expect the Mi Band 4's performance and shipment when compared with the Mi Band 3? Thanks.

嗨,谢谢您接受我昨天举行的关于您的新产品发布的问题。 这是一年中关于您的产品发布计划的快速问题。 那么Q2和Q3的新产品是什么? 与Mi Band 3相比,Mi Band 4的性能和出货量如何? 谢谢。

David Cui

So the Mi Band, as our CEO mentioned, that will launch very, very soon.

正如我们的首席执行官所提到的那样,Mi Band将很快推出。

黄王

In 2 weeks.

在2周内。

David Cui

In 2 weeks. So we - I cannot discuss too much details about the features, but I can guarantee that there are some very attractive feature improvements, and we are confidence that this Mi Band 4 will be another successful product, and that's Mi Band. And for Amazfit products also starting this month, we will, in theories, we will launch multiple products all within this year, and the products will be primarily smartwatches covering different features, including the stand-alone ease in communication features and that was embedded with the Qualcomm platforms and also with health features and with the different price ranges, targeting different consumers' needs. And some of them are lightweighted. But basically we would - we are very confident that this product will bring our sales to the next level, primarily will be in the 2 half of this year.

在2周内。 所以我们 - 我不能讨论有关这些功能的太多细节,但我可以保证有一些非常有吸引力的功能改进,我们相信这个Mi Band 4将是另一个成功的产品,那就是Mi Band。 对于本月开始的Amazfit产品,从理论上讲,我们将在今年内推出多款产品,产品将主要是智能手表,涵盖不同的功能,包括独立的易于通信功能和嵌入式 高通平台以及健康功能和不同价格范围,针对不同消费者的需求。 其中一些是轻量级的。 但基本上我们会 - 我们非常有信心这款产品将使我们的销售更上一层楼,主要是今年下半年。

身份不明的分析师

Yeah. Thank you very much.

是啊。 非常感谢你。

会议主持员

Our next question today comes from Robert Cowell with 86Research. Please go ahead.

我们今天的下一个问题来自Robert Cowell和86Research。 请继续。

罗伯特考威尔

Hi, management. Thank you for taking my question. I actually have two. The first one I wanted to ask is about your international sales, and specifically if we could get a percentage of international sales. And then also just some color on what channels are driving the international sales?
And then the second question is about your cash balance. So I think another good quarter of strong earnings, and you are continuing to build cash. The company also announced that it's selling new shares in April. So I'm just wondering what are the plans for this cash balance, are there large investments you all want to make or whatnot? Thank you.

嗨,管理层。 谢谢你提出我的问题。 我其实有两个。 我想问的第一个问题是关于你的国际销售情况,特别是如果我们能够获得一定比例的国际销售额。 那么在什么渠道推动国际销售方面还有一些颜色?

然后第二个问题是关于你的现金余额。 因此,我认为另一个好的季度盈利,并且您将继续建立现金。 该公司还宣布将在4月份出售新股。 所以我只是想知道这个现金余额的计划是什么,是否有大量投资你想做什么或什么? 谢谢。

David Cui

Yes. So in terms of the international sales starting later, not last year, we intensified our international sales effort and primarily targeting 3 markets: Southeast Asia, Europe and US markets. So we were already seeing some results so far and we, historically, we rely on export distributors to conduct international business.
Right now, we have some direct sales staff in these primary markets, and we're taking different sales strategies in different markets. For instance we already had very multilayered sales efforts in Europe and in Southeast Asia. We leverage more on the local famous e-commerce platform.
In the US, we already have reviews with famous off-line sales channels such as - via Best Buy. So we are in the progress to build multi tier international sales channels. That's our number one question.
And number two question regarding our cash balance. Yes, we - the amount of cash we have so far, half of them are actually - were raised from our IPO, and the rest of the money are actually the cash generated from operations. And we do need that much cash to expand our sales channel. Also, we need that much cash to beef up our R&D team because we need to launch more and more products, not just this year, but also in 2020 and the year after. And also, we need to break through our health related technologies, including blood oxygen and better our algorithm in our current products also.
And also in addition to that, we also look into potential merger acquisition opportunities. This was mentioned multiple times. We need to expand our upstream and downstream -- to upstream and downstream channels. So this is will - we also need some cash to accomplish the already expanded operations as a working capital.
So in terms of the new share, Robert, you mentioned new share, you mentioned the new share. Our recent offer in April was not really for the company to make money. We didn't really release. We only took about 10% of the proceeds.
So the primary reason for this transaction is really to facilitate our institutional with the investors to accept one their mutual - their leasing [ph] funds may have a due date to exit from their IPO portfolio companies. So that's the primary reason.

是。因此,在国际销售方面起步较晚,而不是去年,我们加强了国际销售工作,主要针对3个市场:东南亚,欧洲和美国市场。所以到目前为止我们已经看到了一些结果,从历史上看,我们依靠出口经销商开展国际业务。

目前,我们在这些主要市场拥有一些直接销售人员,我们在不同的市场采取不同的销售策略。例如,我们已经在欧洲和东南亚进行了多层次的销售工作。我们在当地着名的电子商务平台上利用更多。

在美国,我们已经对着名的离线销售渠道进行了评论,例如 - 通过百思买。因此,我们正在建立多层次的国际销售渠道。这是我们的头号问题。

关于我们的现金余额的第二个问题。是的,我们 - 到目前为止我们拥有的现金数量,其中一半是实际的 - 是从我们的首次公开募股中筹集的,其余的资金实际上是运营产生的现金。我们确实需要那么多现金来扩大我们的销售渠道。此外,我们需要大量现金来加强我们的研发团队,因为我们需要推出越来越多的产品,不仅仅是今年,还有2020年和之后的一年。此外,我们还需要突破我们的健康相关技术,包括血氧和我们当前产品中的更好的算法。

除此之外,我们还研究了潜在的并购机会。这被多次提到。我们需要扩大上游和下游 - 上游和下游渠道。所以这将是 - 我们还需要一些现金来完成已经扩展的运营资金。

所以就新股而言,罗伯特,你提到了新的份额,你提到了新的份额。我们最近在4月提出的报价并不是公司能够赚钱的。我们没有真正发布。我们只收取了约10%的收益。

因此,此次交易的主要原因是为了促进我们的机构与投资者接受他们的共同 - 他们的租赁[ph]基金可能有一个到期日退出他们的IPO投资组合公司。这是主要原因。

罗伯特考威尔

Okay. Thank you very much, David.

好的。 非常感谢,大卫。

会议主持员

As there are no further questions, now I'd like to turn the call back over to Grace Zhang for any closing remarks.

由于没有其他问题,现在我想将电话转回Grace Zhang,以获得任何结束语。

Grace Zhang

Thank you once again for joining us today. If you have further questions, please feel free to contact Huami's Investor Relations department through the contact information provided on our website or The Piacente Group, the company's Investor Relations consultant.
So this concludes this conference call. You may now disconnect. Thank you.

再次感谢您今天加入我们。 如果您还有其他问题,请随时通过我们网站或公司投资者关系顾问皮亚琴特集团提供的联系信息联系华米投资者关系部门。

所以这次电话会议结束了。 您现在可以断开连接。 谢谢。

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