Business Context and Reporting Period
Company: Viomi Technology Co., Ltd.
Filing Type: Form 20-F (Annual Report)
Reporting Period: Fiscal year ended December 31, 2025.
Business Overview: Viomi is a Cayman Islands holding company operating primarily in China through subsidiaries and Variable Interest Entities (VIEs). The company focuses on home water solutions (smart water purifiers, heaters, kettles), consumables (filters), and kitchen appliances. It operates under a "Focus" strategy, having divested its IoT@Home portfolio (excluding range hoods, gas stoves, and water heaters) in August 2024 to Mr. Xiaoping Chen, the founder and CEO. The divested business is reported as discontinued operations.
Key Financial Metrics (2025 vs. 2024)
| Metric | 2025 (RMB '000) | 2025 (US$ '000) | 2024 (RMB '000) | Change |
|---|---|---|---|---|
| Net Revenues | 2,428,226 | 347,232 | 2,118,982 | +14.6% |
| Gross Profit | 615,000 | 87,944 | 548,706 | +12.1% |
| Gross Margin | 25.3% | - | 25.9% | -60 bps |
| Operating Income | 128,554 | 18,384 | 156,334 | -17.8% |
| Net Income (Continuing Ops) | 141,929 | 20,297 | 144,685 | -1.9% |
| Net Income Attributable to Company | 141,644 | 20,256 | 63,414 | +123.4%* |
| Cash & Equivalents | 806,599 | 115,342 | 1,026,188 | -21.4% |
| Total Debt (Short + Long Term) | 116,727 | 16,692 | 155,245 | -24.8% |
*Note: The significant increase in Net Income Attributable to the Company in 2025 compared to 2024 is primarily due to the absence of net losses from discontinued operations in 2025, whereas 2024 included a net loss of RMB 80.9 million from discontinued operations.
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased 14.6% to RMB 2.43 billion. This was driven by a 12.6% increase in Home Water Systems revenue and a 47.6% surge in Kitchen Appliances revenue (primarily sales to Xiaomi). Conversely, Consumables revenue declined 15.2% due to technological iterations extending filter lifespans.
- Operating Expenses: Total operating expenses rose 24.6% to RMB 529.4 million. Selling and marketing expenses increased 31.5% due to brand promotion and channel expansion. R&D expenses increased 15.9% due to higher employee compensation.
- Discontinued Operations: The company ceased consolidating the divested IoT@Home business in September 2024. Consequently, 2025 results contain no discontinued operations, while 2024 included a net loss of RMB 82.3 million from these operations.
- Customer Concentration: Dependence on Xiaomi intensified. Sales to Xiaomi accounted for 89.6% of total net revenue in 2025 (up from 82.7% in 2024).
Guidance, Outlook, and Risks
Outlook & Strategy: Management continues to pursue the "Focus" strategy on home water solutions, leveraging AI technology ("AI for Better Water"). The company plans to expand overseas markets (e.g., Malaysia, North America) and diversify product lines with mineral water purifiers. No specific financial guidance for 2026 was provided in the text.
Material Risks:
- Xiaomi Dependency: 89.6% of revenue comes from Xiaomi. Changes in this relationship or Xiaomi's sales performance could materially impact results.
- VIE Structure & Regulatory Risk: Operations rely on contractual arrangements with VIEs in China. Changes in PRC regulations regarding foreign investment or VIE structures could result in penalties or loss of control.
- Internal Control Weaknesses: Management identified material weaknesses in internal control over financial reporting related to a lack of sufficient resources for U.S. GAAP technical issues and a lack of comprehensive accounting policies. Management concluded internal controls were not effective as of December 31, 2025.
- PCAOB/HFCAA Risk: While the PCAOB currently has access to inspect auditors in China, future determinations could lead to delisting risks under the Holding Foreign Companies Accountable Act (HFCAA).
- PFIC Status: The company likely qualifies as a Passive Foreign Investment Company (PFIC) for U.S. tax purposes, which could result in adverse tax consequences for U.S. holders.
Key Facts for Investor Verification
- Revenue Concentration: Verify the stability of the Xiaomi partnership, as nearly 90% of revenue is derived from this single customer.
- Internal Controls: Review the remediation plan for the identified material weaknesses in internal controls over financial reporting and assess the risk of future restatements.
- Discontinued Operations: Ensure comparisons of profitability exclude the impact of the divested IoT@Home business, which caused significant losses in prior periods.
- Dividend Policy: Note that while special dividends were declared in 2025 and 2026, the company intends to retain earnings for expansion and has no plan for regular cash dividends.
- Regulatory Compliance: Monitor PRC regulatory changes regarding VIE structures, data security, and overseas listings that could impact the company's operational license or ability to raise capital.