Huami Corporation Reports Third Quarter 2019 Unaudited Financial Results Quarterly Revenues up 73.3% YoY to RMB1,862.5 Million, and Shipments up 67.1% YoY BEIJING

Huami Corporation Reports Third Quarter 2019 Unaudited Financial Results

Quarterly Revenues up 73.3% YoY to RMB1,862.5 Million, and Shipments up 67.1% YoY

BEIJING, Nov. 12, 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 third quarter ended September 30, 2019.

Third Quarter 2019 Financial and Operating Highlights

First Nine Months 2019 Financial and Operating Highlights

Our persistent execution of strategic initiatives focused on product diversification, brand elevation, and international

expansion, continues to pay off, driving outstanding top-line and bottom-line growth in the third quarter, said Wang Huang, Chairman and CEO. Our revenue performance was primarily the result of the

strong sales of both the Mi-Band 4 and our newly released Amazfit products, as both brand categories become increasingly recognized by consumers. Our international shipments keep on climbing, underpinned by our first international product launch

event in Berlin, Germany and numerous global product design awards we received. We view the overseas marketing campaign as an essential strategy for our growth with additional global product launches being planned for future dates.

In the third quarter, we leveraged our expertise in smart wearable hardware and big data analytics to further optimize algorithms for our cloud-based

healthcare services. The accuracy and effectiveness of our healthcare service offering has been testified by top physicians in China. A recent research published at the 2019 Asia Pacific Heart Rhythm Society by Peking University First Hospital,

showed that Huami smart wearables manage to detect atrial fibrillation at an accuracy rate of approximately 94%, similar to the accuracy of professional physicians. Looking ahead, we will continue investing in and improving our R&D capabilities

as well as seek new strategic partnerships, all while maintaining our close relationship with Xiaomi. With all of these efforts, we strive to provide users a better experience in sports and healthcare services, as they integrate our smart products

and services into their daily lives.

David Cui, Chief Financial Officer, said, We are very pleased with the robust financial results in the

third quarter, with revenues growing 73.3% year-over-year and net income attributed to Huami Corporation also increasing strongly year-over-year at 78.7%, as we benefited from strong unit sales, particularly with increasing global demand for both

Mi-Band 4 and our newly launched Amazfit products. During this quarter, we shipped 13.7 million total units, up 67.1% from the same period last year.

Along with revenue expansion, our operating efficiency also improved in the quarter, with operating

expense as a percentage of revenues at 13.5% during the quarter, declining 4.3 and 1.4 percentage points respectively from the second quarter 2019 and the third quarter last year, despite our increasing investment in R&D capabilities and brand

equity during the quarter. As we further diversify our product lines, strengthen our service offerings, form and solidify strategic alliances, and grow our global footprint, we are confident in our ability to continue delivering healthy financial

and operating performance going forward.

Third Quarter 2019 Financial Results

Revenues increased by 73.3% to RMB1,862.5 million (US$260.6 million) from RMB1,074.7 million for the third quarter of 2018, driven by

continued sales growth of Xiaomi and self-branded wearable products, an increase in overall brand recognition and the global rise in the adoption of smart wearable products.

Cost of revenues increased by 76.8% to RMB1,392.7 million (US$194.8 million) from RMB787.8 million for the third quarter of 2018. The

increase was in line with the sales growth of Xiaomi and self-branded wearable products.

Gross profit increased by 63.8% to RMB469.9 million

(US$65.7 million) from RMB286.9 million for the third quarter of 2018. Gross margin of 25.2% for the third quarter of 2019, compared with 26.7% for the third quarter of 2018.

Total operating expenses increased to RMB250.7 million (US$35.1 million) from RMB160.3 million for the third quarter of 2018.

Research and development expenses increased by 107.7% to RMB124.5 million (US$17.4 million) from RMB60.0 million for the third quarter of

2018, primarily due to an increase in the number of R&D staff and a rise in testing costs associated with future products.

administrative expenses increased to RMB69.6 million (US$9.7 million) from RMB68.0 million for the third quarter of 2018, primarily due to an increase in personnel-related expenses and professional fees related to business expansion,

offset by a decrease in share-based compensation.

Selling and marketing expenses increased by 75.1% to RMB56.6 million (US$7.9 million) from

RMB32.3 million for the third quarter of 2018, primarily due to an increase in advertising and promotional expenses for new self-branded products and growth in personnel-related expenses.

Operating income was RMB219.1 million (US$30.7 million), compared with RMB126.6 million for

the third quarter of 2018.

Income before income tax was RMB228.1 million (US$31.9 million), compared with RMB129.4 million for the third

Income tax expenses were RMB27.5 million (US$3.9 million), compared with RMB21.1 million for the third quarter

Net income attributable to Huami Corporation totaled RMB203.3 million (US$28.4 million), compared with RMB113.8 million

for the third quarter of 2018.

Net income attributable to ordinary shareholders of Huami Corporation increased to RMB203.3 million (US$28.4

million), compared with RMB109.1 million for the third quarter of 2018.

Basic and diluted net income per ADS attributable to ordinary

shareholders of Huami Corporation was RMB3.31 (US$0.46) and RMB3.15 (US$0.44), 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 56.3% to RMB209.8 million

(US$29.4 million) from RMB134.2 million for the third quarter of 2018.

Adjusted basic and diluted net income per ADS attributable to ordinary

shareholders of Huami Corporation was RMB3.41 (US$0.48) and RMB3.25 (US$0.45), respectively. Each ADS represents four (4) Class A ordinary shares.

As of September 30, 2019, the Company had cash and cash equivalents of RMB1,719.8 million (US$240.6 million), compared with RMB1,441.8 million

as of December 31, 2018.

First Nine Months 2019 Financial Results

Revenues increased by 52.9% to RMB3,700.8 million (US$517.8 million) from RMB2,420.8 million in the first nine months of 2018, due to the

growth of Xiaomi and self-branded wearable products, an increase in overall brand recognition and the global rise in the adoption of smart wearable products.

Cost of revenues increased by 52.8% to RMB2,736.2 million (US$382.8 million) from RMB1,790.3 million in the first nine months of 2018. The

increase was in line with accelerating sales growth of both Xiaomi and self-branded wearable products.

Gross profit increased by 53.0% to

RMB964.6 million (US$135.0 million) from RMB630.5 million in the first nine months of 2018. Gross margin increased to 26.1% from 26.0% in the first nine months of 2018.

Total operating expenses increased to RMB575.8 million (US$80.6 million) from RMB396.0 million in the first nine months of 2018.

Research and development expenses increased by 63.2% to RMB290.7 million (US$40.7 million) from RMB178.2 million in the first nine months of 2018,

primarily due to an increase in personnel-related expenses and a rise in testing costs associated with future products.

General and administrative

expenses increased by 10.6% to RMB165.9 million (US$23.2 million) from RMB150.0 million in the first nine months of 2018, primarily due to an increase in personnel-related expenses, professional fees related to business expansion,

offsetting by the decrease of share-based compensation.

Selling and marketing expenses increased by 75.9% to RMB119.2 million (US$16.7 million) from

RMB67.8 million in the first nine months of 2018, primarily due to an increase in advertising and promotional expenses for self-branded products as well as personnel-related expenses.

Operating income was RMB388.8 million (US$54.4 million), compared with RMB234.5 million in the first nine months of 2018.

Income before income tax was RMB414.9 million (US$58.0 million), compared with RMB247.2 million in the first nine months of 2018.

Income tax expenses were RMB50.6 million (US$7.1 million), compared with RMB39.7 million in the first nine months of 2018.

Net income attributable to Huami Corporation totaled RMB368.0 million (US$51.5 million),

compared with RMB214.1 million in the first nine months of 2018.

Net income attributable to ordinary shareholders of Huami Corporation

improved to RMB365.9 million (US$51.2 million), compared with a net loss of RMB0.3 million in the first nine 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 RMB6.03 (US$0.84) and RMB5.73 (US$0.80),

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 26.9% to RMB416.6 million (US$58.3 million) from RMB328.3 million in the first nine months of 2018.

Adjusted basic and diluted net income per ADS attributable to ordinary shareholders of Huami Corporation was RMB6.83 (US$0.96) and RMB6.49 (US$0.91),

respectively, compared with RMB5.92 and RMB5.30, respectively, in the first nine months of 2018. Each ADS represents four (4) Class A ordinary shares.

For the fourth 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 7:30 a.m. Eastern Standard Time on Tuesday, November 12, 2019 (8:30 p.m. Beijing Time on November 12, 2019) to discuss financial results and answer questions from investors and analysts. Listeners may access the call

Participants should dial-in at least 10 minutes before the scheduled start time and

ask to be connected to the call for Huami Corporation.

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 November 19, 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