Core Viewpoint - Xiaomi Group has announced a significant fundraising plan involving the placement of 800 million existing shares at a price of HKD 53.25 per share, aiming to raise approximately HKD 425 billion for business expansion, R&D investment, and other general purposes. Following the announcement, the stock price dropped over 6% on the same day [1][2][3]. Group 1: Fundraising Details - The share placement represents about 3.2% of Xiaomi's existing issued share capital and 1.2% of voting rights [3]. - The placement price reflects a discount of approximately 6.6% compared to the last trading day's closing price of HKD 57.00 [2]. - The funds raised will be allocated to accelerate business expansion, R&D investment, and other general corporate purposes [4]. Group 2: Business Expansion and R&D - Xiaomi aims to expand its business into high-end and ultra-high-end markets, with plans to develop products priced between HKD 6,000 to over HKD 10,000 [4]. - The company is also focusing on diversifying its product range beyond smartphones and automobiles to a full ecosystem [4]. - Xiaomi's R&D investment for 2024 is projected to reach HKD 24.1 billion, a year-on-year increase of 25.9%, with a total expected investment exceeding HKD 100 billion from 2021 to 2025 [4]. Group 3: Financial Performance and Cash Reserves - For the fiscal year 2024, Xiaomi reported a total revenue of HKD 365.9 billion, a 35% year-on-year increase, and an adjusted net profit of HKD 27.2 billion, up 41.3% [5]. - As of December 31, 2024, Xiaomi's total cash reserves amounted to HKD 175.1 billion, including cash and cash equivalents of HKD 33.7 billion and total investment value of HKD 71.4 billion [5].

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Group 1 - Xiaomi Group plans to raise up to $5.3 billion through a share placement to expand its business, with share prices ranging from HKD 52.80 to HKD 54.60 [1] - As of March 24, Xiaomi's stock price has increased over 240% since August last year, closing at HKD 57 per share, with a market capitalization of HKD 1.43 trillion [1] - Xiaomi's cash and cash equivalents amounted to CNY 33.7 billion as of December 31, 2024, with total investments in approximately 430 companies valued at CNY 68.3 billion [1] Group 2 - In 2024, Xiaomi's total revenue grew by 35% year-on-year to CNY 365.9 billion, and adjusted net profit increased by 41.3% to CNY 27.2 billion [2] - Xiaomi's R&D expenditure reached CNY 24.1 billion in 2024, reflecting a year-on-year growth of 25.9%, with a projected total R&D investment exceeding CNY 100 billion from 2021 to 2025 [2] - The company aims to target high-end to ultra-high-end products, expand its product range beyond smartphones and cars, and grow its international retail presence, having opened its first direct store in Japan [2]

Core Insights - Xiaomi reported 4Q24 results that exceeded expectations, highlighting the strength of its competitive position in the market [1] - The company's segments, including smartphones, IoT, and electric vehicles (EVs), are performing well, contributing positively to its ecosystem [1] Company Performance - Xiaomi's 4Q24 results indicate robust performance across its key product lines, suggesting a strong competitive moat [1] - The growth in smartphones, IoT, and EVs supports the overall ecosystem, enhancing the company's market position [1] Industry Dynamics - The performance of Xiaomi reflects broader trends in the technology and consumer sectors, particularly in North America and Asia [1] - The company's ability to navigate complex industries and identify high-potential investments is crucial for its ongoing success [1]

Summary of Xiaomi Group's Conference Call Company Overview - **Company**: Xiaomi Group - **Date**: March 18, 2025 Key Financial Performance - **Total Revenue**: 365.9 billion RMB, a year-on-year increase of 35% [3] - **Adjusted Profit**: 27.2 billion RMB, a year-on-year increase of 41% [3] - **Core Business Profit**: 33.5 billion RMB, with a profit margin of 10% [4] - **Fourth Quarter Revenue**: 109 billion RMB, a year-on-year increase of 48.8% [3] Smartphone Business - **Smartphone Revenue**: 191.8 billion RMB, accounting for 52.4% of total revenue, a year-on-year increase of 21.8% [10] - **Global Market Share**: Increased to 13.8%, maintaining a top-three position globally [5] - **Quarterly Smartphone Revenue**: 51.3 billion RMB in Q4, a year-on-year increase of 16% [10] - **High-End Market Performance**: Significant breakthroughs in the 4,000 RMB price segment [5] AIoT Business - **AIoT Revenue**: Exceeded 100 billion RMB for the first time, a year-on-year increase of 30% [12] - **Gross Margin**: Reached 20.3%, a historical high [12] - **Smart Home Appliances**: 47.4% year-on-year increase in shipments [12] Internet Services - **Internet Services Revenue**: 34.1 billion RMB, a year-on-year increase of 13% [13] - **Monthly Active Users**: Exceeded 700 million globally, with 173 million in mainland China [13] - **Advertising Revenue**: 24.7 billion RMB, contributing to overall growth [13] Electric Vehicle and Innovation Business - **Revenue from Innovation and EVs**: 32.8 billion RMB, with EV sales contributing 32.1 billion RMB [14] - **Total EV Deliveries**: 136,854 units, with an average price of 2,300 RMB [14] - **Planned Deliveries for 2025**: Targeting 350,000 units [14] Research and Development - **R&D Expenditure**: 24.1 billion RMB in 2024, expected to increase to 30 billion RMB in 2025 [4] - **Five-Year R&D Investment Plan**: Over 100 billion RMB [4] Retail Expansion Strategy - **New Store Openings**: Plans to add 5,000 stores in mainland China, totaling 20,000 [8] - **International Expansion**: Targeting 12,000 "Xiaomi Home" stores globally in the next five years [8] Management and Operational Efficiency - **Management Improvements**: Implementation of GSP management system and IPD processes to enhance operational efficiency [9] Future Outlook - **Profitability Expectations**: Anticipated improvements through higher gross margins and optimized user structure [25] - **Capital Expenditure Plans**: Focused on automotive and AI-related fields in 2025 [22] Social Responsibility and Sustainability - **Awards for Sustainability**: Recognized for corporate social responsibility and sustainability efforts [16] Key Challenges - **Component Pricing**: Fluctuations in component prices affecting cost control [24] Conclusion Xiaomi Group demonstrated robust growth across various segments in 2024, with significant advancements in smartphone sales, AIoT, and internet services. The company is strategically positioned for future expansion and innovation, with a strong focus on R&D and global market penetration.

Financial Data and Key Metrics Changes - In 2024, Xiaomi Group achieved total revenue of JPY365.9 billion, a year-on-year increase of 35% [8] - Adjusted net profit reached JPY27.2 billion, reflecting a year-on-year increase of 41% [8] - The comprehensive gross profit margin for the year was 20.9%, showing stable performance [28] - In Q4 2024, revenue exceeded RMB100 billion for the first time, reaching RMB109 billion, with a year-on-year growth of 48.8% [27] Business Line Data and Key Metrics Changes - Mobile phone revenue for 2024 was RMB191.8 billion, accounting for 52.4% of total revenue, with a year-on-year growth of 21.8% [29] - IoT and consumer products revenue exceeded RMB100 billion for the first time, increasing by 30% year-on-year to RMB104.1 billion [34] - Internet services revenue reached RMB34.1 billion, a new historical high with a year-on-year increase of 13.33% [37] Market Data and Key Metrics Changes - Xiaomi's global smartphone shipments were 168.5 million units, a year-on-year increase of 15.7%, maintaining a market share of 13.8% [30] - In the Chinese market, the proportion of high-end smartphones reached 23.3%, a year-on-year increase of 3 percentage points [32] - The wearable wristband products ranked second globally with a market share of 15.2% [11] Company Strategy and Development Direction - The company is focusing on a "Human, Car, and Home" strategy, aiming for high-end development across all product categories [13][24] - Xiaomi plans to expand its retail network to 20,000 stores by the end of 2025, including 500 overseas stores [19] - The company aims to increase R&D investment to JPY30 billion in 2025, emphasizing technological innovation [14] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of technological innovation and the potential for growth in overseas markets, which are expected to be twice the size of the domestic market [53] - The company anticipates a stable operating environment with some price volatility in components, but expects overall growth in the high-end product segment [75] - Management expressed confidence in achieving higher profitability in the automobile business in the coming years, despite current losses [82] Other Important Information - Xiaomi's R&D expenditure reached RMB24.1 billion in 2024, an increase of 25.9% compared to the previous year [41] - The company was recognized as a Chinese ESG model enterprise, reflecting its commitment to social responsibility [44] Q&A Session Summary Question: Regarding the EV business and production capacity - Management confirmed that they are improving production capacity and have set a target of delivering 350,000 units [52] Question: Plans for overseas expansion and resource allocation - Management indicated that overseas markets present significant growth potential, with ongoing expansion of Xiaomi Home stores in various countries [55] Question: AI adoption and investment - Management acknowledged that true AI adoption is still a few years away, with significant investment planned for AI technologies [61] Question: Impact of national subsidies on growth - Management clarified that national subsidies had minimal impact on Q4 growth, particularly for mobile phones [72] Question: Future profitability of the automobile business - Management stated that while the automobile business is currently in a heavy investment phase, they expect improvements in gross margins and profitability in the future [82] Question: Growth in the Internet business - Management attributed the growth in the Internet business to an expanding user base and increased advertising revenue [84] Question: Retail network expansion speed and future forecast - Management confirmed plans to expand the retail network significantly, aiming for 20,000 stores by 2025 [92] Question: Opportunities in large home appliances - Management expressed optimism about growth potential in large home appliances, emphasizing their competitive edge in smart technology [102]

Core Insights - Xiaomi Group reported its strongest annual performance ever for 2024, with total revenue reaching RMB 365.9 billion, a year-on-year increase of 35.0%, and adjusted net profit rising by 41.3% to RMB 27.2 billion [1] - In Q4 2024, Xiaomi's quarterly revenue surpassed RMB 100 billion for the first time, reaching RMB 109 billion, marking a 48.8% year-on-year growth [1] Business Performance - All business segments of Xiaomi experienced high growth, driven by the successful launch of its automotive business and the synergy of its "people, vehicles, and home" ecosystem [2] - The smartphone segment generated revenue of RMB 191.8 billion, reflecting a 21.8% year-on-year increase, with a global market share of 13.8%, maintaining a top-three position for 18 consecutive quarters [2] - Xiaomi's high-end smartphone shipments accounted for 23.3% of total shipments in mainland China, with market shares in the RMB 4,000-5,000 and RMB 5,000-6,000 price segments reaching 24.3% and 9.7%, respectively [2] Innovation and R&D - Revenue from Xiaomi's electric vehicle and innovative businesses reached RMB 32.8 billion, exceeding expectations, with total deliveries of the Xiaomi SU7 surpassing 136,000 units [3] - The IoT and lifestyle products segment crossed RMB 100 billion in revenue for the first time, achieving RMB 104.1 billion, a 30.0% increase year-on-year [3] - Xiaomi's R&D expenditure for 2024 was RMB 24.1 billion, a 25.9% increase, with a total of 21,190 R&D personnel and over 42,000 global patents, including more than 1,000 in the automotive sector [3] Ecosystem Development - Xiaomi is constructing its first smart home appliance factory, completing its "people, vehicles, and home" ecosystem with full control over the R&D and manufacturing of high-end products [4] - AI plays a crucial role in Xiaomi's high-end strategy, with 25% of the planned RMB 30 billion R&D investment for 2025 allocated to AI [5] - The Xiaomi automotive division has achieved significant AI upgrades, with cumulative intelligent driving mileage exceeding 100 million kilometers [5] AI Integration - The second-generation MiLM2 model has improved capabilities by over 45% across ten dimensions, integrating seamlessly with various Xiaomi smart devices [6] - Major financial institutions, including Morgan Stanley and Goldman Sachs, have expressed optimism about Xiaomi's ecosystem and its potential for growth, highlighting the unique advantages created by AI integration [6]

Financial Performance - Xiaomi's total revenue reached RMB 365.9 billion, a 35.0% year-over-year increase[10] - Adjusted net profit was RMB 27.2 billion, up 41.3% year-over-year[10] - The gross profit margin was 20.9%[10] - R&D expenses are expected to exceed RMB 100 billion from 2021 to 2025[18] Smartphone Business - Global smartphone shipments ranked No 3 with a 13.8% market share in 2024[13] - Mainland China smartphone market share increased by 1.7 percentage points year-over-year[13] - Premium smartphones accounted for 23.3% of total smartphone units sold in Mainland China, an increase of 3.0 percentage points[13] - Smartphone revenue reached RMB 191.8 billion, up 21.8% year-over-year[105] AIoT and Smart EV - IoT and lifestyle products revenue reached RMB 104.1 billion, up 30.0% year-over-year[108] - Smart EV and other new initiatives revenue reached RMB 32.8 billion[10, 112] - Delivered 136,854 vehicles in 2024 and targets 350,000 vehicle deliveries in 2025[13, 72]

Core Insights - Xiaomi reported a significant increase in annual revenue, driven by strong smartphone sales and an expansion into the electric vehicle (EV) market [1][2] - The company's total revenue for the last year was 365.9 billion yuan ($50.6 billion), marking a 35% increase from the previous year [2] - In the fourth quarter of 2024, revenue grew by 48.8% year-on-year, surpassing Bloomberg's forecast of 43% [2][3] Revenue Breakdown - Revenue from electric vehicles and other new initiatives reached 32.8 billion yuan last year, while traditional smartphone sales accounted for the majority at 333.2 billion yuan [4] - The company aims to deliver 350,000 vehicles in 2025, having already delivered 136,854 units of the SU7 Series in 2024 [3][4] Market Context - Xiaomi's performance is seen as a barometer for consumer sentiment in China, especially as the government implements measures to stabilize the economy and boost consumer spending [2][6] - State subsidies for personal electronics and home appliances are expected to benefit Xiaomi, given its strong market presence in these categories [6]

Financial Performance - For the fiscal year ending December 31, 2024, Xiaomi Corporation reported total revenue of RMB 365.9 billion, a year-on-year increase of 35.0%[6]. - The adjusted net profit for the same period reached RMB 27.2 billion, marking a 41.3% increase compared to the previous year[6]. - In Q4 2024, Xiaomi's total revenue surpassed RMB 100 billion for the first time in a single quarter, reaching RMB 109 billion, a 48.8% year-on-year growth[7]. - The net profit for the year increased by 34.9% from RMB 17.5 billion for the year ending December 31, 2023, to RMB 23.6 billion for the year ending December 31, 2024[71]. - The adjusted net profit for the year ended December 31, 2024, was RMB 27.2 billion, compared to RMB 19.3 billion for the previous year[35]. - The total revenue for the year ended December 31, 2024, increased by 35.0% to RMB 365.9 billion, compared to RMB 271.0 billion for the year ended December 31, 2023[37]. - The company reported a profit of RMB 23,578,449 thousand for the fiscal year ending December 31, 2024, reflecting a significant increase in operational performance[164]. - Total comprehensive income for the year amounted to RMB 24,338,685 thousand, up from RMB 18,510,061 thousand in 2023, reflecting a growth of 31.4%[189]. Revenue Breakdown - The company's smartphone business generated revenue of RMB 191.8 billion in 2024, up 21.8% year-on-year, with a gross margin of 12.6%[17]. - The IoT and lifestyle consumer products segment achieved revenue of RMB 104.1 billion, a 30.0% year-on-year increase, with a gross margin of 20.3%[21]. - The revenue from the "Smart Electric Vehicles and Innovative Businesses" segment was RMB 32.8 billion for the fiscal year 2024[7]. - The "Mobile × AIoT" segment revenue grew by 22.9% year-on-year to RMB 333.2 billion, with a gross margin of 21.2%[16]. - The internet services revenue reached RMB 34.1 billion in 2024, a year-on-year increase of 13.3%, with a gross margin of 76.6%[25]. - Revenue from the smart electric vehicle and innovative business segment for Q4 2024 was RMB 16.7 billion, with 69,697 units of the Xiaomi SU7 series delivered, resulting in an ASP of RMB 234,322 per vehicle[83]. User and Market Metrics - The number of active users globally reached 702.3 million by December 2024, reflecting a 9.5% year-on-year increase[8]. - Xiaomi's AIoT platform connected 904.6 million IoT devices by the end of 2024, a 22.3% year-on-year growth[8]. - The company achieved a smartphone market share of 13.8% globally, an increase of 1.0 percentage points year-on-year[8]. - In the high-end smartphone segment in mainland China, Xiaomi's shipment volume accounted for 23.3% of total smartphone shipments, up 3.0 percentage points year-on-year[12]. - The company's offline retail store count in mainland China approached 15,000 by the end of 2024, with a market share of 10.3% in offline smartphone channels[14]. Research and Development - Xiaomi's R&D expenditure for 2024 was RMB 24.1 billion, a 25.9% increase from the previous year, with R&D personnel accounting for 48.5% of total employees[10]. - R&D expenses increased by 25.9% from RMB 19.1 billion for the year ending December 31, 2023, to RMB 24.1 billion for the year ending December 31, 2024, primarily due to increased spending related to innovative businesses such as smart electric vehicles[61]. - R&D expenses increased by 36.1% from RMB 5.5 billion in Q4 2023 to RMB 7.4 billion in Q4 2024, driven by higher personnel costs and R&D related to smart electric vehicles[103]. Cost and Profitability - Total sales cost increased by 35.5% from RMB 213.5 billion to RMB 289.3 billion, with smartphone and IoT sales costs rising significantly[50]. - Gross profit increased by 33.2% from RMB 57.5 billion to RMB 76.6 billion, while gross margin slightly decreased from 21.2% to 20.9%[56]. - The gross margin for the "Smart Electric Vehicle and Innovative Business" segment was 18.5% for 2024, improving to 20.4% in Q4 2024[28]. - The gross margin for IoT and consumer products improved from 16.3% to 20.3%, driven by higher margins from wearables and smart appliances[58]. Cash Flow and Investments - Cash and cash equivalents as of December 31, 2024, amounted to RMB 33.7 billion[166]. - The net cash generated from operating activities was RMB 39,295,499 thousand, down from RMB 41,300,495 thousand in 2023, a decrease of 4.9%[195]. - The net cash used in investing activities for Q4 2024 was RMB 29.1 billion, primarily due to an increase in long-term bank deposits of RMB 18.2 billion and short-term investments of RMB 8.6 billion[172]. - The total value of investments as of December 31, 2024, was RMB 71.4 billion, reflecting a 1.7% year-on-year increase[177]. Debt and Financing - The company issued USD 600 million 3.375% senior notes due 2030, guaranteed unconditionally by the company[167]. - The company also issued USD 800 million 2.875% senior notes due 2031 and USD 400 million 4.100% green senior notes due 2051, both guaranteed by the company[168]. - As of December 31, 2024, total borrowings amounted to RMB 30.6 billion[174]. - The company reported a net cash outflow from financing activities of RMB 3,998,976 thousand in 2024, compared to RMB 504,972 thousand in 2023, indicating increased investment in growth initiatives[195].