Chinese Phone Maker Xiaomi Taps New Finance Chief



(WSJ) Chinese smartphone maker Xiaomi Corp. has appointed a new finance chief as it looks to increase its margins and unlock value from its investments in more than 300 startups.


Beijing-based Xiaomi, whose name translates as “little rice,” Wednesday said Alain Lam plans to succeed Wang Xiang, the company’s acting chief financial officer, in early October. Mr. Wang was appointed in April when former CFO Chew Shou Zi stepped down after nearly five years in the role to become president for international operations.


Xiaomi ranked fourth in terms of global smartphone shipments in the second quarter, according to research firm Canalys.


Mr. Lam joins Xiaomi from Credit Suisse Group AG, where he served as head of technology, media and telecom in the investment banking and capital markets team in the Asia Pacific region. He previously worked at Morgan Stanley covering equity capital markets for technology, media and telecom in Asia Pacific.


His background could indicate an intention to monetize some of Xiaomi’s stakes in technology startups, for example in ByteDance Ltd., the owner of TikTok, or Huami Corp., a maker of smart wearable devices, said Romeo Alvarez, an analyst at advisory firm William O’Neil & Co. These investments are currently viewed as undervalued, he said.


In his new role, Mr. Lam is expected to help improve Xiaomi’s profitability. Better profit margins could come from higher prices for the company’s smartphones—average sale prices jumped more than 12% in the second quarter compared with the prior year period—as well as growing revenue in Xiaomi’s e-commerce and gaming businesses, Mr. Alvarez said.


Xiaomi didn’t immediately respond to a request for comment.


The company faces an uncertain macroeconomic environment in some of its markets because of the coronavirus pandemic.


“The chief challenge is proving the business model outside of China,” said Mark Newman, a managing director at brokerage firm Sanford C. Bernstein.


The company’s profit rose about 30% to 6.6 billion yuan ($966 million) in the six months ended June 30 compared with the prior year period, Xiaomi said Wednesday.


Xiaomi’s market share in China, currently at around 10%, is expected to rise as its main domestic rival Huawei Technologies Co. faces new restrictions by the Trump administration, limiting its access to technology by Alphabet Inc.’s Google and other U.S. companies.


Worsening trade relations between China and India, two of the company’s largest markets, could also hurt the firm. Xiaomi assembles the majority of its devices in India, but continues to import some components from China.


Source: Wall Street Journal by Nina Trentmann

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