(Yicai) Aug. 30 -- Xiaomi’s president said it aims to make its electric vehicle business a world leader after profit at the Chinese smartphone company soared 169 percent in the second quarter from a year ago.

Xiaomi has invested heavily in its EV business, building a production plant and setting up a long-term auto business layout aimed at ranking in the global top five, Lu Weibing said on the firm's earnings conference call yesterday.

Xiaomi Automobile has finished its summer vehicle tests with better-than-expected progress and still plans to enter mass production by the first half of next year, he noted.

Net profit was CNY3.7 billion (USD507.6 million) in the three months ended June 30, the Beijing-based firm’s trading report showed. But dampened by lackluster demand, income from its phone business fell 13.4 percent to CNY36.6 billion (USD5 billion), dragging down total revenue by 4 percent to CNY67.4 billion.

Adjusted net profit surged 147 percent to CNY5.1 billion from a year earlier, the highest since the fourth quarter of 2021, Xiaomi pointed out.

Driven by a strategy to promote premium smartphones, Xiaomi's global handset price rose 2.8 percent to an average CNY1,112 (USD153), while that in the Chinese mainland jumped over 24 percent. The China market share of its phones priced between CNY4,000 and CNY6,000 almost doubled to 12.7 percent.

Selling and marketing expenses shrank 16 percent to CNY4.5 billion, mainly due to lower costs of packaging, transportation, promotion, and advertising. Administrative expenses fell 13 percent to CNY1.1 billion.

Research and development outlays jumped 21 percent to CNY4.6 billion, mostly because of higher costs related to Xiaomi’s smart EV business and other new initiatives.

Indian authorities have frozen, but not confiscated, CNY4.8 billion of Xiaomi’s funds in the country, Lu also said. Xiaomi’s Indian operations have always been legal and compliant, and the firm seeks a legal way to solve the problem while communicating with the Indian government, he added, noting Xiaomi's business adjustment in that market has had good results.

After earlier jumping by as much as 4 percent, Xiaomi’s shares [HKG: 1810] finished 0.7 percent higher at HKD12.46 (USD1.59) apiece in Hong Kong today. The benchmark Hang Seng Index closed flat.

Editor: Martin Kadiev