Huami (NYSE: HMI), a leading cloud-based healthcare services provider, released its financial report for the second quarter this week, which revealed the company pulled in RMB1.137 billion (USD161 million) in revenue. Huami shipped a total of 8.9 million units, a 7.2% increase YoY.
Huang Wang, Huami Chairman and CEO, said, “I am proud of our teams and our brands that generated revenue growth of 9.5% in the second quarter and 21.1% for the first half of 2020 despite the challenges of the worldwide pandemic.”
He explained that new products launched in the first half of 2020, including smartwatches, earbuds, and other smart health devices, had helped the company grow despite the economic issues caused by the pandemic. He added that designing new smart health devices and applying Huami’s proprietary health data analysis tools for healthcare insurers and providers will remain important strategies going forward.
New technology and smart R&D
Huami’s mission is to connect health with technology. The company is dedicated to developing new products and technologies. In Q2, it launched its second generation AI chip, the Huangshan-2, which hit the market just 18 months after the first generation AI chip was released. The Huangshan-2 features significant improvements in power usage, data collection, and analytical accuracy. Huangshan-2 can reportedly detect atrial fibrillation 7 times faster than Huangshan-1. The Huangshan-2 chips will be released during the first quarter of 2021.
Also in June, the company released the next generations of its biometric sensors and biometric algorithms that monitor a variety of health metrics. Huami said global consumers have responded positively to its health- and fitness-focused products, approving of their affordability and advanced technology features. Huami’s products are now sold in over 70 countries worldwide.
In Q2, the company’s R&D expenses totaled RMB117.2 million, an increase of 25% YoY. Huami believes that smart R&D investment is key to boosting the rapid development of new smart devices.
Overseas shipments and partnerships
Huami CEO Huang said that in the first half of 2020, the company expanded the breadth of its product offerings. In Q1, its Amazfit smartwatches ranked 5th in global smartwatch shipment volume, according to an IDC report. Sales in the US, Western Europe, and Southeast Asia increased by triple digits. During Q2, the newly released Mi-band 5 also became a hit. Huami aims to maintain its momentum and is planning to soon release its new Zepp line of smartwatches .
In June, Huami announced the launch of its Huami AI Research institute, which aims to drive innovation in healthcare big data in the wearable device industry by working with the world’s leading scientists and researchers. In July, Huami established a lab with Zhong Nanshan, China’s Anthony Fauci, to use data from wearable devices to follow up with recovered COVID-19 patients in China.
Also in July, Huami’s wholly-owned subsidiary, PAI Health, announced an agreement with Prudential Corporation Asia to incorporate its science-backed activity metrics into Prudential’s Pulse digital health app.
Impact of Covid-19
Huami’s Q2 financial report also addresses the impact of Covid-19 on the global retail sales across industries. China recovered and opened many retail establishments toward the midpoint of Q2. However, many Asian retailers said that shoppers have been slow to return, which negatively impacted Q2 sales. In the US and Europe, continued Covid-19 outbreaks have kept many stores closed. As a result, global retailers reduced their inventories and orders during the second quarter.
Still, Huami CEO Huang is positive about the business outlook for the second half of 2020. “While the first half of 2020 was a challenging period for all of us, we are proud of our performance in smart wearable product shipments, and the strong execution of our health service strategy. We are confident that our device shipment volume will continue to climb in the second half of the year, and we look forward to delivering value to all of our stakeholders,” he said.
(Top photo from Pixabay)