Huami, a wearable high-tech device maker which is part of Chinese electronics giant Xiaomi’s ecosystem, could not escape a financial quandary in the third quarter, as it enjoyed modest growth in revenue and shipments but suffered a dramatic drop in profit.

During the three-month period, Huami generated 2.2 billion yuan ($329.2 million) in revenue, representing a year-on-year increase of 20%, and shipped 15.9 million wearable products in total, including smart watches, smart bands and ear buds, compared with 13.7 million shipments in the same period of 2019, according to the company’s quarterly earnings report released on Monday.

Yet the figure for Huami’s quarterly net profit plummeted about 60% year-on-year to 81.1 million yuan, which could be attributed to significant growth in expenses. During the quarter, Huami’s spending on marketing and R&D reached 115.6 million yuan and 172.9 million yuan, up 104.2% and 38.8% year-on-year, respectively.

Huami’s chief financial officer Leon Deng said that the company will put expenses under control by “focusing on projects with higher return on investment,” without providing further details.

The company predicted that its fourth-quarter revenue will likely reach between 1.95 billion yuan and 2.15 billion yuan, compared with 2.11billion yuan in the same period of last year.

Contact reporter Ding Yi (yiding@caixin.com)

Related: Smart Wearable Device Maker Huami’s Profits Slump in Second Quarter Despite Revenue Growth