Viomi Technology Co Ltd – ADR (NASDAQ:VIOT) Topline Falls

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Viomi Technology Co Ltd – ADR (NASDAQ:VIOT) stock plummets 13.97% (As on Nov 25, 4:39:41 AM UTC-4, Source: Google Finance) after the company in the third quarter of FY 21 has reported the net revenues of RMB1,056.5 million (US$164.0 million), compared to RMB1,486.7 million for the third quarter of 2020. Net revenues were in line with the Company’s previous guidance and the decrease was mainly due to the significant decrease in sales of Xiaomi-branded sweeper robots, as well as product portfolio adjustments for margin expansion in other categories. Non-GAAP net loss attributable to ordinary shareholders of the Company was RMB22.2 million (US$3.4 million), compared to non-GAAP net income attributable to ordinary shareholders of the Company of RMB57.4 million for the third quarter of 2020. As of September 30, 2021, the Company had cash and cash equivalents of RMB771.7 million (US$119.8 million), restricted cash of RMB25.6 million (US$4.0 million), short-term deposits of RMB67.0 million (US$10.4 million) and short-term investments of RMB463.5 million (US$71.9 million), compared to RMB504.1million, RMB70.6 million, nil and RMB696.1 million, respectively, as of December 31, 2020.

Moreover, the revenues from IoT @ Home portfolio decreased by 39.3% to RMB643.5 million (US$99.9 million) from RMB1,060.2 million for the third quarter of 2020. The decline was mainly due to the decrease in sales of Xiaomi-branded sweeper robots and product portfolio adjustments for margin expansion in some categories. The revenues from home water solutions increased by 7.9% to RMB157.0 million (US$24.4 million) from RMB145.4 million for the third quarter of 2020. The growth was mainly driven by the Company’s product portfolio adjustment in this category, which contributed to increased sales of and demand for new and larger flux water purifiers as well as a gross margin expansion. The revenues from consumables increased by 11.7% to RMB79.6 million (US$12.4 million) from RMB71.3 million for the third quarter of 2020, primarily due to increased demand for the Company’s water purifier filter products. The revenues from small appliances and others decreased by 15.9% to RMB176.5 million (US$27.4 million) from RMB209.9 million for the third quarter of 2020, primarily due to the Company’s continued product portfolio optimization to obtain a higher gross margin in this category.

For the fourth quarter of 2021, the Company currently expects net revenues to be between RMB1.2 billion and RMB1.3 billion. The Company expects the sales of Xiaomi-branded sweeper robots continue to decrease in the fourth quarter and the own-branded sweeper robot business to achieve faster growth, which will become one of the main categories.

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