Xiaomi’s bottom-line more than doubled year-on-year in Q2 on improved profitability of its smartphones and tablets, increased advertising revenue and cost-reduction moves stemming from inventory cuts.

Smartphone revenue fell 13.4 per cent to CNY36.6 billion ($5 billion), with shipments down 15.8 per cent to 32.9 million units.

The company stated the revenue decline was partially offset by a 2.8 per cent rise in smartphone ASP to CNY1,112, driven by a 24 per cent rise in mainland China.

Gross profit at the smartphone business rose 33 per cent to CNY4.9 billion, aided by lower component costs and a rise in the proportion of premium shipments in China from 16.9 per cent to 20.1 per cent.

Its gross profit margin increased 4.7 percentage points to 13.3 per cent.

Xiaomi stated it “continued to execute its key corporate strategy and has steadily advanced” a premium smartphone strategy.

The company noted total inventory dropped 33.5 per cent to CNY38.5 billion, its lowest level in the past ten quarters.

IoT and lifestyle product revenue rose 12.3 per cent to CNY22.3 billion and gross profit 38.2 per cent to CNY3.9 billion.

Advertising revenue increased 13 per cent to CNY5.1 billion, making up the majority of its internet services business.

Net profit was CNY3.7 billion, up from CNY1.4 billion in Q2 2022.

Revenue fell 4 per cent to CNY67.4 billion.

R&D expenses rose 21 per cent to CNY4.6 billion.