Investing.com– Xiaomi Corp (HK:) shares fell on Wednesday after the Chinese electronics giant clocked underwhelming first-quarter earnings on higher component costs, especially in its smartphone business.
Xiaomi fell nearly 3% to HK$28.88, reaching its lowest point in nearly a month. The stock was among the biggest weights on the index, which fell 0.9%.
Xiaomi clocked a 43% slump in its first-quarter profit to 6.1 billion yuan ($899 million), hit chiefly by higher memory chip costs in its core smartphone unit.
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The unit also faced greater domestic competition from rivals including Apple Inc and Huawei.
While the company’s electric vehicle business did clock strong sales, its heavy investment and slim margins also weighed on overall earnings. Xiaomi has ramped up investment in EVs and artificial intelligence to diversify beyond its core electronics segment.
Xiaomi outlined plans to expand further into overseas markets to offset rising domestic costs and competition. The company flagged little relief from rising memory costs due to outsized demand in the AI industry.
