Huami Corporation Reports Third Quarter 2018 Unaudited Financial Results

BEIJING,Nov.26,2018 -- 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 30,2018.

ThirdQuarter 2018 Financial and Operating Highlights

Revenues[1] reached RMB1,074.7 million (US$156.5 million),representing an increase of 126.7% from the third quarter of 2017.

Gross margin was 26.7%,no material change from the third quarter of 2017.

Net income attributable to Huami Corporation was RMB113.8 million (US$16.6 million),compared with RMB50.2 million for the third quarter of 2017.

Adjusted net income attributable to Huami Corporation[2] was RMB134.2 million (US$19.5 million),up 93.1% from the third quarter of 2017.

Adjusted basic and diluted net income per American depositary share ("ADS") attributable to ordinary shareholders of Huami Corporationwas RMB2.23 (US$0.32) and RMB2.11 (US$0.31),respectively,compared with RMB1.27 and RMB1.22,for the third quarter of 2017. Each ADS represents four (4) Class A ordinary shares.

Total units shipped reached 8.2 million,compared with 3.9 million in the third quarter of 2017.

First Nine Months of 2018 Financial and Operating Highlights

Revenues reached RMB2,420.8 million (US$352.5 million),representing an increase of 86.8% from the first nine months of 2017.

Gross margin reached 26.0%,increasing from 25.3% for the first nine months of 2017.

Net income attributable to Huami Corporation was RMB214.1 million (US$31.2 million),compared with RMB95.4 million in the first nine months of 2017.

Adjusted net income attributable to Huami Corporation was RMB328.3 million (US$47.8 million),up 128.1% from the first nine months of 2017.

Adjusted basic and diluted net income per ADS attributable to ordinary shareholders of Huami Corporation was RMB5.92 (US$0.86) and RMB5.30 (US$0.77),compared with RMB2.44 and RMB2.33,for the first nine months of 2017. Each ADS represents four (4) Class A ordinary shares.

Total units shipped reached 18.3 million,compared with 11.6 million in the first nine months of 2017.

[1]The Group adopted ASC 606 by using modified retrospective method since January 1,2018.

[2]Adjusted net income is a non-GAAP measure,which excludes share-based compensation expenses. See "Reconciliation of GAAP and Non-GAAP Results" at the end of this press release.

"Our third quarter results reflect our strong and growing market position and the enthusiastic reception of our products across the global smart wearables market," saidWang Huang,Chairman and CEO. "We were particularly pleased with the revenue growth we experienced in overseas markets,especially strong sales in the emerging markets as we executed focused sales strategies in these markets. We continue to develop cutting-edge products whose features excite and benefit consumers. During the quarter we launched a new generation Amazfit Health Band 1S,which allows us to provide cloud-based health monitoring services to users,future empowered by our newly developed Huangshan-1 AI Chip. We also introduced a new smartwatch,Amazfit Verge,that fully integrates with the Xiaomi IOT systemvia Xiao'ai intelligent voice assistant and we will further explore wearable technology scenarios in IOT industries. Meanwhile,the new Xiaomi-branded product Mi Band 3 along with its NFC version (with access to public transportation in 160+ cities),is experiencing a strong sales momentum,which also drove our growth of this quarter. The newly launched products and technologies create a foundation for our continued leadership in the development of advanced products in the smart wearables industry. We are excited to continue our growth and strengthen our market position through robust research and product development,including expansion of our value-added services,and the continued exploration of new markets and partners around the globe."

David Cui,Chief Financial Officer,said,"Strong year-over-year revenue growth of 126.7% supported continued improvement in our profit as we enjoy the benefits of our growing scale. Revenue generated from self-branded products grew to 34.5% of the total revenue for the first nine month sales and international version sales contributed 42.7% of the total shipment for the third quarter. We shipped 8.2 million units in the quarter,up 110.3% from the third quarter of 2017,driven by strong market reception for our Amazfit products and continued strong sales of the Mi Band 3 that was launched in the second quarter of 2018. Our growing share of the global smart wearables market,combined with strong alliances with industry leaders and solid momentum on many fronts,gives us confidence in our outlook for the fourth quarter and positions us well as we head into 2019."

Third Quarter 2018Financial Results

Revenues increased by 126.7% to RMB1,074.7 million (US$156.5 million) from RMB474.1 million for the third quarter of 2017,primarily due to the increase in the sales of Xiaomi wearable products and self-branded products,driven by increasing market recognition of our products.

Cost of revenues increased by 126.9% to RMB787.8 million (US$114.7 million) from RMB347.2 million for the third quarter of 2017. The increase was in line with the rapid sales growth of Xiaomi wearable products and self-branded products.

Gross profit increased by 126.1% to RMB286.9 million (US$41.8 million) from RMB126.9 million for the third quarter of 2017. Gross margin of 26.7% was in line with the third quarter of 2017.

Total operating expenses increased by 121.0% to RMB160.3 million (US$23.3 million) from RMB72.5 million for the third quarter of 2017.

Research and development expensesincreased by 70.1% toRMB60.0 million(US$8.7 million) fromRMB35.2 millionfor the third quarter of 2017,primarily due to the increase in R&D personnel expenses and the recruitment of new employees.

General and administrative expensesincreased by 148.3% toRMB68.0 million(US$9.9 million) fromRMB27.4 millionfor the third quarter of 2017,primarily due to the increase in personnel-related cost,the foreign exchange rate fluctuation,and the professional service fees associated with business expansion and being a public company.

Selling and marketing expensesincreased by 226.8% toRMB32.3 million(US$4.7 million) fromRMB9.9 millionfor the third quarter of 2017,primarily due to an increase in advertisement promotion expenses forself-branded products,and an increase in salary compensation.

Operating incomewasRMB126.6 million(US$18.4 million),compared with RMB54.4 millionfor the third quarter of 2017.

Income before income taxwasRMB129.4 million(US$18.8 million),compared with RMB57.7 millionfor the third quarter of 2017.

Income tax expenseswereRMB21.1 million(US$3.1 million),compared withRMB7.5 millionfor the third quarter of 2017.

Net incomeattributable to Huami CorporationtotaledRMB113.8 million(US$16.6 million),compared withRMB50.2 millionfor the third quarter of 2017.

Net income attributable to ordinary shareholders of Huami Corporationincreased toRMB109.1 million(US$15.9 million),compared withRMB14.8 millionfor the third quarter of 2017.

Basic and diluted net income per ADS attributable to ordinary shareholders of HuamiCorporationwasRMB1.89(US$0.28)andRMB1.79(US$0.26),compared withRMB0.85andRMB0.82,for the third quarter of 2017. Each ADS represents four (4) Class A ordinary shares.

Adjusted net income attributable to Huami Corporation,which excludes share-based compensation expenses,increased by 93.1% toRMB134.2 million(US$19.5 million) fromRMB69.5 millionfor the third quarter of 2017.

Adjusted basic and diluted net income per ADS attributable to ordinary shareholders of HuamiCorporationwasRMB2.23(US$0.32)andRMB2.11(US$0.31),compared withRMB1.27andRMB1.22,for the third quarter of 2017. Each ADS represents four (4) Class A ordinary shares.

As ofSeptember 30,2018,the Company had cash and cash equivalents ofRMB967.4 million(US$140.9 million),compared withRMB366.3 millionas ofDecember 31,2017.

First Nine Months of 2018 Financial Results

Revenues increased by 86.8% to RMB2,420.8 million (US$352.5 million) from RMB1,296.2 million for the first nine months of 2017,due to the increase in shipment volume of both Xiaomi wearable products and self-branded products and others,driven by increasing market recognition of our products.

Cost of revenues increased by 84.9% to RMB1,790.3 million (US$260.7 million) from RMB968.4 million for the first nine months of 2017. The increase was in line with the rapid sales growth of Xiaomi wearable products and self-branded products.

Gross profit increased by 92.3% to RMB630.5 million (US$91.8 million) from RMB327.9 million for the first nine months of 2017. Gross margin increased to 26.0% from 25.3% for the first nine months of 2017. The increase was driven by improved economies of scale and the rapid growth in sales of self-branded products.

Total operating expenses increased by 79.4% to RMB396.0 million (US$57.7 million) from RMB220.7 million for the first nine months of 2017. The Company's successful IPO and the amendment of certain vesting schedules of previously granted options triggered an acceleration of expense recognition in the first nine months of 2018. Excluding share-based compensation expenses,the increase is primarily due to an increase in personnel-related costs,advertisement promotion expenses,and professional service fees.

Research and development expensesincreased by 64.1% toRMB178.2 million(US$25.9 million) fromRMB108.6 millionfor the first nine months of 2017,primarily due to the increase in R&D personnel expenses and the recruitment of new employees.

General and administrative expensesincreased by 81.9% toRMB150.0 million(US$21.8 million) fromRMB82.5 millionfor the first nine months of 2017,primarily due to the increase in personnel-related cost and professional fees to meet the need of business expansion and being a public company.

Selling and marketing expensesincreased by 128.4% toRMB67.8 million(US$9.9 million) fromRMB29.7 millionfor the first nine months of 2017,primarily due to the increase in salary compensation to retain sales and marketing personnel,and the increase in advertisement promotion expenses on the self-branded products.

Operating incomewasRMB234.5 million(US$34.1 million),compared withRMB107.1 millionfor the first nine months of 2017.

Income before income tax was RMB247.2 million (US$36.0 million),compared with RMB112.0 million for the first nine months of 2017.

Income tax expenseswereRMB39.7 million(US$5.8 million),compared withRMB15.5 millionfor the first nine months of 2017.

Net incomeattributable to Huami CorporationtotaledRMB214.1 million(US$31.2 million),compared withRMB95.4 millionfor the first nine months of 2017.

Net income attributable to ordinary shareholders of Huami Corporationincreased toRMB195.4 million(US$28.5 million),compared withRMB20.8 millionfor the first nine months of 2017.

Basic and diluted net income per ADS attributable to ordinary shareholders of HuamiCorporationwasRMB3.83(US$0.56)andRMB3.43(US$0.50),compared withRMB1.39andRMB1.33,for the first nine months of 2017. Each ADS represents four (4) Class A ordinary shares.

Adjusted net income attributable to Huami Corporation,increased by 128.1% toRMB328.3 million(US$47.8 million) fromRMB144.0 millionfor the first nine months of 2017.

Adjusted basic and diluted net income per ADS attributable to ordinary shareholders of HuamiCorporationwas RMB5.92(US$0.86)andRMB5.30(US$0.77),compared withRMB2.44andRMB2.33,for the first nine months of 2017. Each ADS represents four (4) Class A ordinary shares.

Outlook

For the fourth quarter of 2018,the management of the Company currently expects:

- Net revenues to be betweenRMB1.12 billionandRMB1.15 billion,which would represent an increase of approximately 48.8% to 52.8% fromRMB752.6 millionfor the fourth quarter of 2017.

The above outlook is based on the current market conditions and reflects Company management's current and preliminary estimates of market and operating conditions and customer demand,which are all subject to change.

Conference Call

The Company's management will hold a conference call at7:30 a.m. Eastern Time on Monday,November 26,2018 (8:30 p.m. Beijing Time on November 26,2018) to discuss financial results and answer questions from investors and analysts. Listeners may access the call by dialing:

US (Toll Free):

+1-888-346-8982

International:

+1-412-902-4272

Mainland China (Toll Free):

400-120-1203

Hong Kong (Toll Free):

800-905-945

Hong Kong:

+852-3018-4992

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 one hour after the end of the conference until December 2,2018 by dialing the following telephone numbers:

US (Toll Free):

+1-877-344-7529

International:

+1-412-317-0088

Replay Passcode:

10126209

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 2017,Huami shipped 18.1 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. In addition to designing,manufacturing and selling smart bands and watches under its own Amazfit brand,Huami is the sole partner of Xiaomi,a leading mobile internet company and global consumer electronics brand,to design and manufacture Xiaomi-branded smart bands,watches (excluding children watches and quartz watches),scales and associated accessories.

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.

We believe that adjusted net income helps identify underlying trends in our business that could otherwise be distorted by the effect of certain expenses that we include in net income. We believe that adjusted net income 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 financial and operational decision-making.

Adjusted net income,should not be considered in isolation or construed as an alternative to net income,basic and diluted net income per share attributable to ordinary shareholders of Huami Corporation or any other measure of performance or as an indicator of our operating performance. Investors are encouraged to review the historical non-GAAP financial measures to the most directly comparable GAAP measures. Adjusted net income,presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently,limiting their usefulness as comparative measures to our data. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure.

Exchange Rate

The Company's business is primarily conducted inChinaand the significant majority of revenues generated are denominated in Renminbi ("RMB"). This announcement contains currency conversions of RMB amounts into U.S. dollars ("US$") solely for the convenience of the reader. Unless otherwise noted,all translations from RMB to US$ are made at a rate ofRMB6.8680toUS$1.00,the effective noon buying rate for September 28,2018 as set forth in the H.10 statistical release of the Federal Reserve Board. No representation is made that the RMB amounts could have been,or could be,converted,realized or settled into US$ at that rate on September 28,or at any other rate.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Statements that are not historical facts,including statements about the Company's beliefs and expectations,are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement,including but not limited to the following: the cooperation with Xiaomi,the recognition of the Company's self-branded products; the Company's growth strategies; trends and competition in global wearable technology market; changes in the Company's revenues and certain cost or expense accounting policies; governmental policies relating to the Company's industry and general economic conditions inChinaand the global. Further information regarding these and other risks is included in the Company's filings with the United States Securities and Exchange Commission. All information provided in this press release and in the attachments is as of the date of this press release,and the Company undertakes no obligation to update any forward-looking statement,except as required under applicable law.

For investor and media inquiries,please contact:

InChina:

Huami Corporation

Grace Yujia Zhang

Tel: +86-10-5940-3255

E-mail: ir@huami.com

The Piacente Group,Inc.

Ross Warner

Tel: +86-10-5730-6201

E-mail: huami@tpg-ir.com

Inthe United States:

The Piacente Group,Inc.

Brandi Piacente

Tel: +1-212-481-2050

E-mail: huami@tpg-ir.com

HUAMI CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("US$")

except for number of shares and per share data,or otherwise noted)

As of December 31,

As of September 30,

2017

2018

RMB

RMB

US$

Assets

Current assets:

Cash and cash equivalents

366,336

967,362

140,851

Restricted cash

3,185

3,020

440

Term deposit

-

288,456

42,000

Accounts receivable

32,867

38,535

5,611

Amounts due from related parties,current

578,454

663,260

96,573

Inventories

249,735

423,535

61,668

Short-term investments

13,721

49,665

7,231

Prepaid expenses and other current assets

51,062

45,730

6,658

Total current assets

1,295,360

2,479,563

361,032

Property,plant and equipment,net

28,755

35,366

5,149

Intangible asset,net

5,339

9,000

1,310

Goodwill

5,930

5,930

863

Long-term investments

85,238

152,788

22,246

Deferred tax assets

41,895

67,305

9,800

Other non-current assets

3,000

64,113

9,335

Total assets

1,465,517

2,814,065

409,735

HUAMI CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("US$")

except for number of shares and per share data,

2017

2018

RMB

RMB

US$

Liabilities

Current liabilities:

Accounts payable

707,782

849,736

123,724

Advance from customers

10,683

21,031

3,062

Amount due to related parties,current

8,143

8,513

1,240

Accrued expenses and other current liabilities

93,798

135,294

19,699

Income tax payables

21,600

38,682

5,632

Notes payable

5,243

5,034

733

Bank borrowings

30,000

20,000

2,912

Total current liabilities

877,249

1,078,290

157,002

Deferred tax liabilities

2,470

5,317

774

Amount due to a related party,non-current

3,076

3,185

464

Other non-current liabilities

4,940

56,249

8,190

Total liabilities

887,735

1,143,041

166,430

HUAMI CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("US$")

except for number of shares and per share data,

2017

2018

RMB

RMB

US$

Mezzanine equity

Series A convertible redeemable participating preferred shares

26,770

-

-

Series B-1 convertible redeemable participating preferred shares

26,906

-

-

Series B-2 convertible redeemable participating preferred shares

295,942

-

-

Total mezzanine equity

349,618

-

-

Equity

Ordinary shares

56

151

22

Additional paid-in capital

72,427

1,196,715

174,245

Accumulated retained earnings

131,192

378,615

55,127

Accumulated other comprehensive income

22,100

96,086

13,990

Total Huami Corporation shareholders' equity

225,775

1,671,567

243,384

Non-controlling interests

2,389

(543)

(79)

Total equity

228,164

1,024

243,305

Total liabilities,mezzanine equity and equity

1,735

HUAMI CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("US$")

except for number of shares and per share data,or otherwise noted)

For the Three Months Ended September 30,

2017

2018

RMB

RMB

US$

Revenues

474,079

1,074,707

156,480

Cost of revenues

347,174

787,811

114,707

Gross profit

126,905

286,896

41,773

Operating expenses:

Selling and marketing

9,896

32,341

4,709

General and administrative

27,376

67,971

9,897

Research and development

35,245

59,958

8,730

Total operating expenses

72,517

160,270

23,336

Operating income

54,388

126,626

18,437

Other income and expenses:

Realized gain from investments

2,335

-

-

Interest income

691

1,648

240

Other income

328

1,086

158

Income before income tax

57,742

129,360

18,835

Income tax expenses

(7,535)

(21,095)

(3,071)

Income before income from equity method investments

50,207

108,265

15,764

(Loss)/income from equity method investments

(280)

4,399

641

Net income

49,927

112,664

16,405

Less: Net loss attributable to non-controlling interest

(263)

(1,148)

(167)

Net income attributable to Huami Corporation

50,190

113,812

16,572

Less: Accretion of Series A Preferred Shares

968

-

-

Less: Accretion of Series B-1 Preferred Shares

803

-

-

Less: Accretion of Series B-2 Preferred Shares

8,823

-

-

Less: Undistributed earnings allocated to participatingpreferred

shares and nonvested restricted shares

24,833

4,759

693

Net income attributable to ordinary shareholders ofHuami

Corporation

14,763

109,053

15,879

Net income per share attributable to ordinary

shareholders of Huami Corporation

Basic income per ordinary share

0.21

0.47

0.07

Diluted income per ordinary share

0.20

0.45

0.07

Net incomeper ADS (4 ordinary shares equal to 1 ADS)

ADS – basic

0.85

1.89

0.28

ADS – diluted

0.82

1.79

0.26

Weighted average number of shares used in computingnet

incomeper share

Ordinary share – basic

69,271,901

231,062,447

231,447

Ordinary share – diluted

77,438,973

244,537,743

244,743

HUAMI CORPORATION

Reconciliation of GAAP and Non-GAAP Results

(Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("US$")

except for number of shares and per share data,

2017

2018

RMB

RMB

US$

Net income attributable to Huami

Corporation

50,190

113,812

16,572

Share-based compensation expenses

19,333

20,404

2,971

Adjusted net income attributable to Huami

Corporation

69,523

134,216

19,543

Less: Accretion of Series A Preferred Shares

968

-

-

Less: Accretion of Series B-1 Preferred Shares

803

-

-

Less: Accretion of Series B-2 PreferredShares

8,823

-

-

Less: Undistributed earnings allocated to

participating preferred shares and nonvested

restricted shares

36,959

5,613

817

Adjusted net income attributable to ordinary

shareholders of Huami Corporation

21,970

128,603

18,726

Adjusted net income per share attributable to

ordinary shareholders of Huami Corporation

Adjusted basic income per ordinary share

0.32

0.56

0.08

Adjusted diluted income per ordinary share

0.30

0.53

0.08

Adjusted net incomeper ADS (4 ordinary

sharesequal to 1 ADS)

ADS – basic

1.27

2.23

0.32

ADS – diluted

1.22

2.11

0.31

Weighted average number of shares used in

computing net income per share

Ordinary share – basic

69,447

Ordinary share – diluted

77,743

Share-based compensation expenses included

are follows:

Cost of revenues

-

5

1

Selling and marketing

-

61

9

General and administrative

14,049

19,340

2,816

Research and development

5,284

998

145

Total

19,333

20,404

2,971

HUAMI CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("US$")

except for number of shares and per share data,or otherwise noted)

For the Nine Months Ended September 30,

2017

2018

RMB

RMB

US$

Revenues

1,296,248

2,420,766

352,470

Cost of revenues

968,369

1,790,311

260,674

Gross profit

327,879

630,455

91,796

Operating expenses:

Selling and marketing

29,680

67,785

9,870

General and administrative

82,474

150,044

21,847

Research and development

108,590

178,151

25,939

Total operating expenses

220,744

395,980

57,656

Operating income

107,135

234,475

34,140

Other income and expenses:

Realized gain from investment

2,335

-

-

Interest income

1,463

5,023

731

Other income

1,066

7,714

1,123

Income before income tax

111,999

247,212

35,994

Income tax expenses

(15,462)

(39,713)

(5,782)

Income before loss from equity method investments

96,537

207,499

30,212

(Loss)/income from equity method investments

(1,422)

3,663

533

Net income

95,115

211,162

30,745

Less: Net loss attributable to non-controlling interest

(263)

(2,932)

(427)

Net income attributable to Huami Corporation

95,378

214,094

31,172

Less: Accretion of Series A Preferred Shares

2,786

177

26

Less: Accretion of Series B-1 PreferredShares

2,324

368

54

Less: Accretion of Series B-2 PreferredShares

25,551

4,049

590

Less: Undistributed earnings allocated to

participatingpreferred shares and nonvested restricted shares

43,884

14,090

2,052

Net income attributable to ordinary shareholders

ofHuami Corporation

20,833

195,410

28,450

Net income per share attributable to

ordinaryshareholders of Huami Corporation

Basic income per ordinary share

0.35

0.96

0.14

Diluted income per ordinary share

0.33

0.86

0.13

Net incomeper ADS (4 ordinary shares equal to 1 ADS)

ADS – basic

1.39

3.83

0.56

ADS – diluted

1.33

3.43

0.50

Weighted average number of shares used in

computingnet incomeper share

Ordinary share – basic

59,795,978

204,101,485

204,485

Ordinary share – diluted

68,395,489

216,264,202

216,202

HUAMI CORPORATION

Reconciliation of GAAP and Non-GAAP Results

(Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("US$")

except for number of shares and per share data,

2017

2018

RMB

RMB

US$

Net income attributable to Huami

Corporation

95,378

214,094

31,172

Share-based compensation expenses

48,575

114,211

16,628

Adjusted net income attributable to Huami

Corporation

143,953

328,305

47,800

Less: Accretion of Series A Preferred Shares

2,049

590

Less: Undistributed earnings allocated

toparticipating preferred shares and

nonvestedrestricted shares

76,822

21,770

3,170

Adjusted net income attributable to ordinary

shareholders of Huami Corporation

36,470

301,941

43,960

Adjusted net income per share attributable

toordinary shareholders of Huami Corporation

Adjusted basic income per ordinary share

0.61

1.48

0.22

Adjusted diluted income per ordinary share

0.58

1.32

0.19

Adjusted incomeper ADS (4 ordinary shares

equal to 1 ADS)

ADS – basic

2.44

5.92

0.86

ADS – diluted

2.33

5.30

0.77

Weighted average number of shares used in

computing net income per share

Ordinary share – basic

59,202

Share-based compensation expenses included

are follows:

Cost of revenues

-

415

60

Selling and marketing

-

4,172

607

General and administrative

42,147

71,403

10,396

Research and development

6,428

38,221

5,565

Total

48,575

114,211

16,628

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