Huami Corporation Reports Second Quarter 2019 Unaudited Financial Results Quarterly Revenues up 36.6% Year-over-Year to RMB1,038.7 Million, Exceeding Guidance Range BEIJING

Huami Corporation Reports Second Quarter 2019 Unaudited Financial Results

Quarterly Revenues up 36.6% Year-over-Year to RMB1,038.7 Million, Exceeding Guidance Range

BEIJING, August 19, 2019 /PRNewswire/ Huami Corporation ( Huami or the Company ) (NYSE: HMI), a biometric and activity

data-driven company with significant expertise in smart wearable technology, today announced its unaudited financial results for the second quarter ended June 30, 2019.

Second Quarter 2019 Financial and Operating Highlights

First Six Months 2019 Financial and Operating Highlights

Solid topline revenue growth and strong profitability continued in the second quarter, as our brand, product lines,

footprint and strategic initiatives, all continued to develop and expand globally, said Wang Huang, Chairman and CEO. Our revenue performance was driven by the extremely successful second quarter launch of the Mi-Band 4, with the best

sales momentum among all generations of the Mi-Band series. In addition, sales of Amazfit brand smart watches continued to outperform, with our self-branded line now ranking fifth globally in shipments, according to a recent independent market

research report. Our overseas expansion was in line with the Company s strategy and expectations.

In the second quarter, we continued to expand and diversify our product lines. In late June and July,

we launched multiple smart watch products with various functionalities designed for different customer demands. Also, our self-developed AI chip Huangshan-1 was successfully incorporated in our healthcare focused smart watch product line and

significantly enhanced the health monitoring functionalities. These newly launched products and technologies create a concrete foundation for our continued leadership in the development of advanced products in the smart wearables industry. With our

growth strategies in place, including international expansion, further product line diversification, and especially new product launches, we have full confidence for the second half 2019.

David Cui, Chief Financial Officer, said, Robust revenue growth momentum continued in the second quarter, increasing 36.6% year-over-year, as the

Company benefited from strong unit sales, particularly with the newly launched Mi-Band 4. During the quarter, we shipped 8.3 million total units, up 53.7% from the same period last year.

We also continued to make strategic and incremental investments in our R&D capabilities, including rigorous product testing for new launches, to

ensure we remain on the cutting edge of smart wearable technology. Additionally, during the second quarter, we made further investments to build our brand equity by increasing our marketing efforts to promote broader awareness and adoption of our

self-branded products. We are confident these investments, along with strong alliances, operational efficiency and a growing global footprint, will help ensure our healthy growth and solid financial performance, in both the short and long

Second Quarter 2019 Financial Results

Revenues increased by 36.6% to RMB1,038.7 million (US$151.3 million) from RMB760.1 million for the second quarter of 2018, driven by the continuous

growth in the sales of Xiaomi wearable products, an increase in brand recognition, and the overall rise of the smart wearable products market.

Cost of revenues increased by 35.2% to RMB761.4 million (US$110.9 million) from RMB563.3 million for

the second quarter of 2018. The increase was in line with the sales growth of Xiaomi wearable products.

Gross profit increased by 40.8% to

RMB277.3 million (US$40.4 million) from RMB196.9 million for the second quarter of 2018. Gross margin of 26.7% for the second quarter of 2019 compares with 25.9% for the second quarter of 2018.

Total operating expenses increased to RMB185.2 million (US$27.0 million) from RMB97.9 million for the second quarter of 2018.

Research and development expenses increased by 111.4% to RMB93.8 million (US$13.7 million) from RMB44.4 million for the second quarter of 2018,

primarily due to an increase in personnel-related expenses, and a rise in intermediate test expenses as several new pipeline products underwent rigorous testing.

General and administrative expenses increased by 55.6% to RMB51.0 million (US$7.4 million) from RMB32.8 million for the second quarter of 2018,

primarily due to an increase in personnel-related expenses, professional fees related to business expansion, and foreign exchange rate fluctuation.

Selling and marketing expenses increased by 95.2% to RMB40.4 million (US$5.9 million) from RMB20.7 million for the second quarter of 2018, primarily

due to an increase in advertising and promotion expenses for self-branded products, and personnel-related expenses.

Operating income was RMB92.1

million (US$13.4 million), compared with RMB99.0 million for the second quarter of 2018.

Income before income tax was RMB101.3 million (US$14.8

million), compared with RMB101.4 million for the second quarter of 2018.

Income tax expenses were RMB12.4 million (US$1.8 million), compared with

RMB15.9 million for the second quarter of 2018.

Net income attributable to Huami Corporation totaled RMB89.4 million (US$13.0 million), compared with

RMB85.5 million for the second quarter of 2018.

Net income attributable to ordinary shareholders of Huami Corporation increased to RMB89.2 million

(US$13.0 million), compared with RMB80.8 million for the second quarter of 2018.

Basic and diluted net income per ADS attributable to ordinary

shareholders of Huami Corporation was RMB1.46 (US$0.21) and RMB1.39 (US$0.20), respectively. Each ADS represents four (4) Class A ordinary shares.

Adjusted net income attributable to Huami Corporation, which excludes share-based compensation expenses, increased by 10.0% to RMB111.7 million

(US$16.3 million) from RMB101.6 million for the second quarter of 2018.

Adjusted basic and diluted net income per ADS attributable to ordinary

shareholders of Huami Corporation was RMB1.83 (US$0.27) and RMB1.73 (US$0.25), respectively. Each ADS represents four (4) Class A ordinary shares.

As of June 30, 2019, the Company had cash and cash equivalents of RMB1,450.1 million (US$211.2 million), compared with RMB1,441.8 million as of

First Six Months 2019 Financial Results

Revenues increased by 36.6% to RMB1,838.3 million (US$267.8 million) from RMB1,346.1 million in the first six months of 2018, due to an increase in

shipment volumes of both Xiaomi and self-branded wearable products, driven by increased brand recognition of our products.

increased by 34.0% to RMB1,343.6 million (US$195.7 million) from RMB1,002.5 million in the first six months of 2018. The increase was in line with accelerating sales growth of Xiaomi wearable products and self-branded products.

Gross profit increased by 44.0% to RMB494.8 million (US$72.1 million) from RMB343.6 million in the first six months of 2018. Gross margin increased to

26.9% from 25.5% in the first six months of 2018. The increase was driven by improved economies of scale and accelerating growth in sales of self-branded products.

Total operating expenses increased to RMB325.0 million (US$47.3 million) from RMB235.7 million in the

first six months of 2018.

Research and development expenses increased by 40.6% to RMB166.1 million (US$24.2 million) from RMB118.2 million in the first

six months of 2018, primarily due to an increase in personnel-related expenses, and a rise in intermediate test expenses as several new pipeline products were undergoing rigorous testing.

General and administrative expenses increased by 17.4% to RMB96.3 million (US$14.0 million) from RMB82.1 million in the first six months of 2018, primarily

due to an increase in personnel-related expenses, professional fees for business expansion, and foreign exchange rate fluctuation.

Selling and marketing

expenses increased by 76.6% to RMB62.6 million (US$9.1 million) from RMB35.4 million in the first six months of 2018, primarily due to an increase in advertising and promotional expenses for self-branded products as well as personnel-related

Operating income was RMB169.7 million (US$24.7 million), compared with RMB107.8 million in the first six months of 2018.

Income before income tax was RMB186.8 million (US$27.2 million), compared with RMB117.9 million in the first six months of 2018.

Income tax expenses were RMB23.0 million (US$3.4 million), compared with RMB18.6 million in the first six months of 2018.

Net income attributable to Huami Corporation totaled RMB164.6 million (US$24.0 million), compared with RMB100.3 million in the first six months of

Net income attributable to ordinary shareholders of Huami Corporation improved to RMB163.2 million

(US$23.8 million), compared with RMB114.1 million net loss in the first six months of 2018, which included the impact of deemed dividend to preferred shareholders.

Basic and diluted net income per ADS attributable to ordinary shareholders of Huami Corporation was RMB2.71 (US$0.39) and RMB2.56 (US$0.37),

respectively, compared with RMB2.40 and RMB2.40 net loss, respectively, in the first six months of 2018. Each ADS represents four (4) Class A ordinary shares.

Adjusted net income attributable to Huami Corporation, which excludes share-based compensation expenses, increased by 6.5% to RMB206.7 million (US$30.1

million) from RMB194.1 million in the first six months of 2018.

Adjusted basic and diluted net income per ADS attributable to ordinary

shareholders of Huami Corporation was RMB3.40 (US$0.50) and RMB3.21 (US$0.47), respectively, compared with RMB3.63 and RMB3.16, respectively, in the first six months of 2018. Each ADS represents four (4) Class A ordinary shares.

For the third quarter of 2019, the

management of the Company currently expects:

The above outlook is based on the current market

conditions and reflects the Company management s current and preliminary estimates of market and operating conditions and customer demand, which are all subject to change.

The Company s management will hold a conference call at 8:00 a.m. Eastern Time on Monday, August 19, 2019 (8:00 p.m. Beijing Time on August 19,

2019) to discuss financial results and answer questions from investors and analysts. Listeners may access the call by dialing:

Participants should dial-in at least 10 minutes before the scheduled start time and ask to be connected to the call for

Additionally, a live and archived webcast of the conference call will be available at http://www.huami.com/investor.

A telephone replay will be available two hours after the call until August 26, 2019 by dialing:

About Huami Corporation

Huami is a biometric and activity data-driven company with significant expertise in smart wearable technology. Since its inception in 2013, Huami has quickly

established its global market leadership and recognition by shipping millions of units of smart wearable devices. In 2018, Huami shipped 27.5 million units of smart wearable devices. Huami has one of the largest biometric and activity databases

in the global smart wearables industry.

Huami s mobile apps work hand in hand with its smart wearable devices and provide users with a comprehensive view and analysis of their biometric and activity data.

Use of Non-GAAP Measures

We use adjusted net income, a

non-GAAP financial measure, in evaluating our operating results and for financial and operational decision-making purposes. Adjusted net income represents net income excluding share-based compensation expenses, and such adjustment has no impact on

income tax. Adjusted net income attributable to ordinary shareholders of Huami Corporation is a non-GAAP measure, which excludes share-based compensation expenses attributable to ordinary shareholders of Huami Corporation and deemed dividend for

preferred shares, and is used as the numerator in computation of adjusted net income per share attributable to ordinary shareholders of Huami Corporation.

We believe that adjusted net income and adjusted net income attributable to ordinary shareholders help identify underlying trends in our business that could

otherwise be distorted by the effect of certain expenses and deemed dividend that we include in net income and net income attributable to ordinary shareholders. We believe that adjusted net income and adjusted net income attributable to ordinary

shareholders provides useful information about our operating results, enhances the overall understanding of our past performance and future prospects and allows for greater visibility with respect to key metrics used by our management in its