Investment Rating - The investment rating for Xiaomi Group is "Buy" [7] Core Insights - The report highlights that the pessimistic expectations regarding storage price increases have been largely digested, suggesting a focus on Xiaomi's substantial progress in AI research and development, including models, embodied intelligence, self-developed chips, and operating systems [3][13] - The revenue forecast for FY2026E-FY2028E has been adjusted to RMB 514.1 billion, RMB 584.5 billion, and RMB 661.4 billion respectively, while the adjusted net profit forecast is set at RMB 33 billion, RMB 41 billion, and RMB 52.5 billion for the same period [13] - The target price for Xiaomi Group has been adjusted to HKD 43.4 based on the SOTP valuation method, maintaining the "Buy" rating [13][17] Financial Summary - Total revenue is projected to reach RMB 365.9 billion in 2024, RMB 457.3 billion in 2025, RMB 514.1 billion in 2026, RMB 584.5 billion in 2027, and RMB 661.4 billion in 2028, reflecting growth rates of 35.0%, 25.0%, 12.4%, 13.7%, and 13.2% respectively [5] - Gross profit is expected to be RMB 76.6 billion in 2024, RMB 101.8 billion in 2025, RMB 105.8 billion in 2026, RMB 121.3 billion in 2027, and RMB 139.7 billion in 2028, with gross margins of 20.9%, 22.3%, 20.6%, 20.7%, and 21.1% respectively [5] - Adjusted net profit is forecasted to be RMB 27.2 billion in 2024, RMB 39.2 billion in 2025, RMB 33.0 billion in 2026, RMB 41.0 billion in 2027, and RMB 52.5 billion in 2028, with corresponding growth rates of 41.3%, 43.8%, -15.8%, 24.4%, and 28.0% [5] Market Performance - The stock price range over the past 52 weeks is between HKD 31.58 and HKD 60.15, with a current market capitalization of HKD 841.25 million [8]

Investment Rating - The report maintains a "Buy" rating for Xiaomi Group-W (01810.HK) [1] Core Views - The company's performance in 2025 met expectations, with revenue of 457.3 billion yuan, a year-on-year increase of 25% [8] - The smartphone business showed signs of pressure, with a revenue decline of 3% year-on-year, while the high-end market share increased significantly [8] - The IoT business achieved a revenue growth of 18% year-on-year, supported by a robust ecosystem [8] - The automotive and innovation segment saw a remarkable revenue increase of 224% year-on-year, indicating strong demand and order reserves [8] - The company is expected to benefit from advancements in AI, with a projected R&D investment exceeding 200 billion yuan over the next five years [8] - The report forecasts net profits of 33.9 billion yuan in 2026 and 37.7 billion yuan in 2027, with a long-term growth outlook supported by AI integration [8] Financial Summary - Total revenue projections for 2024A to 2028E are as follows: 365.9 billion yuan, 457.3 billion yuan, 509.3 billion yuan, 560.2 billion yuan, and 605.0 billion yuan respectively [1] - Net profit projections for the same period are: 23.7 billion yuan, 41.6 billion yuan, 33.9 billion yuan, 37.7 billion yuan, and 45.2 billion yuan respectively [1] - The report indicates a decrease in net profit in 2026, with a forecasted decline of 18.51% [1] - The latest diluted EPS is projected to be 1.61 yuan for 2026, with a P/E ratio of 17.78 [1]

Investment Rating - The report maintains a "Buy" rating for Xiaomi Group-W (01810.HK) [1] Core Views - The company's performance in 2025 met market expectations, with a revenue of 457.3 billion yuan, representing a year-on-year increase of 25% [8] - The smartphone business showed a decline in revenue, but the high-end market share increased significantly, indicating a successful transition towards premium products [8] - The IoT business also demonstrated growth, supported by a robust ecosystem and international channel expansion [8] - The automotive segment saw substantial growth, with a revenue increase of 224% year-on-year, and strong order reserves for future deliveries [8] - The company is expected to benefit from advancements in AI, with significant R&D investments planned for the coming years [8] Financial Summary - Total revenue projections for 2024A to 2028E are as follows: 365.9 billion yuan (2024A), 457.3 billion yuan (2025A), 509.3 billion yuan (2026E), 560.2 billion yuan (2027E), and 605.0 billion yuan (2028E) [1] - Net profit forecasts show a significant increase in 2025A to 41.6 billion yuan, followed by a decrease in 2026E to 33.9 billion yuan, and a recovery to 37.7 billion yuan in 2027E [1] - The company's EPS is projected to be 1.61 yuan in 2026E, with a P/E ratio of 17.78 [1][9] - The gross margin is expected to be around 22.26% in 2025A, with a slight decline in subsequent years [10]

Xiaomi Corp. (1810.HK) Earnings Review Summary Company Overview - **Company**: Xiaomi Corp. (1810.HK) - **Market Cap**: HK$836.8 billion / $106.8 billion - **Enterprise Value**: HK$639.3 billion / $81.6 billion - **Current Price**: HK$32.68 - **Target Price**: HK$41.00 (25.5% upside) [5][10] Key Financial Highlights - **4Q25 Results**: Revenue grew by +7% year-over-year (YoY), slightly above Goldman Sachs estimates and below Visible Alpha consensus [1] - **Adjusted Net Profit**: Declined by -24% YoY, in line with consensus but 7% above Goldman Sachs estimates due to higher non-operating income [1] - **2026E Backbone Profit**: Estimated at Rmb33.6 billion, which is 110% of the projected group adjusted net profit of Rmb30.2 billion [1] - **Smartphone Losses**: Expected net loss of Rmb4 billion+ from smartphones on approximately 145 million shipments with a gross profit margin (GPM) of around 8% [1] Strategic Insights 1. **AI Strategy and Investments**: Xiaomi plans to invest Rmb60 billion in AI over the next three years, focusing on enhancing its ecosystem and developing embodied AI technologies [1][15] 2. **Impact of Rising Memory Costs**: Management anticipates a long-term upward cycle in memory costs through 2027, with a focus on balancing volume and margin. Smartphone GPM dropped to 8.3%, with a significant inventory provision of Rmb2.1 billion in 4Q25 [1][16] 3. **Electric Vehicle (EV) Performance**: The new SU7 model received 30,000 confirmed orders within three days, indicating strong demand. Projected EV volume for 2026E is 600,000 units with a GPM of 21.8% [1][16] 4. **IoT Market Outlook**: Xiaomi aims for premiumization in the China market and sees significant growth potential overseas, with a target of 1,000 stores by the end of 2026 [1][16] 5. **Operational Efficiency**: Non-IFRS operating expenses are expected to grow by +11% YoY to Rmb75 billion in 2026E, with core operating expenses declining by -3% YoY [1][16] Revenue and Profitability Forecasts - **Revenue Projections**: - 2025: Rmb457.3 billion - 2026E: Rmb490.3 billion - 2027E: Rmb589.3 billion - 2028E: Rmb680.7 billion [5][10] - **EBITDA**: Expected to decline significantly in 2026E to Rmb41.0 billion, with a recovery projected in subsequent years [5][10] - **EPS Growth**: Projected to decline by -24.5% in 2026E, with a recovery in the following years [5][10] Market Position and Challenges - **Market Share Decline**: Xiaomi's smartphone shipment market share declined by -2.6 percentage points quarter-over-quarter to 11% in 4Q25, with losses across all major markets [1][31][33] - **Competitive Landscape**: Competitors like Apple and OPPO have gained market share, while Xiaomi's performance has been challenged by rising costs and inventory management issues [1][35] Conclusion Xiaomi Corp. is navigating a challenging environment with declining profits and market share, but its strategic investments in AI and operational efficiencies may provide a buffer against industry headwinds. The company's focus on EVs and IoT presents potential growth avenues, although rising memory costs and competitive pressures remain significant risks. The current investment rating is "Buy" with a target price of HK$41.00, reflecting a positive outlook despite short-term challenges [1][10].

Summary of Xiaomi Group Conference Call Company Overview - **Company**: Xiaomi Group - **Date**: March 24, 2026 Key Points Industry and Market Dynamics - **Storage Chip Market**: Entering a long-term price increase cycle, with significant adjustments expected by 2027 due to rising costs driven by AI demand and supply constraints. This will heavily impact smartphones, tablets, and PCs [2][3] - **Automotive Business**: Targeting 550,000 vehicle deliveries in 2026, with 60% of locked orders from iPhone users. The penetration rate of payment plans has reached 60%, with higher conversion rates among women and Apple users compared to previous models [2][4] - **IoT Business Expansion**: Plans to double overseas stores from 4,500 to 10,000 by 2026, leveraging a market potential six times larger than the domestic market [2][6] Financial and Investment Strategy - **R&D and Capital Expenditure**: A planned expenditure of 60 billion over the next three years, with approximately 16 billion allocated for R&D in 2026, focusing on AI large models, humanoid robots, and self-developed chip platforms [2][5] - **AI Strategy**: 2026 is positioned as a year of application explosion for AI, with self-developed AI entities integrated into the ecosystem. Current focus is on technology iteration without specific KPIs set [2][5] Competitive Advantages and Risk Management - **Supply Chain Management**: The company has established strong long-term partnerships with global memory suppliers, mitigating supply interruption risks. Inventory levels have been proactively increased to counteract rising memory prices [3][4] - **Product Diversification**: A diverse product portfolio helps to spread risk, with home appliances less affected by memory price increases compared to smartphones and electric vehicles [3][4] Sales and Performance Metrics - **Sales Data Disclosure**: The company has shifted to reporting locked contract orders instead of specific model data, which is seen as a more reliable measure of performance. The initial sales of new models have been strong, with over 30,000 locked orders within three days of launch [4][6] - **Profitability in IoT and Automotive**: The IoT business is expected to see significant growth, particularly in high-end markets, while the automotive sector has already achieved profitability in 2025, with optimistic projections for 2026 despite market pressures [6][7] Challenges and Strategic Responses - **Cost Pressures**: Rising storage chip prices pose challenges, particularly for smartphones and laptops. The company may need to adjust pricing if internal cost absorption is insufficient [3][7] - **Geopolitical Impact**: The recent Middle East situation has minimal direct impact on the company's overall business, although some raw material costs have been affected [7] Future Outlook - **AI and Chip Development**: Continued investment in AI and chip development is planned, with no reduction in chip business funding despite increased R&D spending. The chip business is viewed as a long-term strategic platform [8] - **Market Positioning**: The company aims to maintain its market position while balancing pricing strategies across different product categories, ensuring that strong product innovation can offset cost increases [8]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The report highlights the need to wait for a fundamental turning point, with a clearer picture of the AI strategy emerging [6] - The company has adjusted its profit forecasts for 2026 and 2027, maintaining a "Buy" rating despite the downward revisions [8] Financial Data and Earnings Forecast - Revenue projections for the company are as follows: - 2024: 365.9 billion RMB - 2025: 457.3 billion RMB - 2026E: 504.8 billion RMB - 2027E: 593.0 billion RMB - 2028E: 698.0 billion RMB - Year-on-year growth rates are projected at 35% for 2024, 25% for 2025, 10% for 2026, 17% for 2027, and 18% for 2028 [7] - Adjusted net profit forecasts are: - 2024: 27.3 billion RMB - 2025: 39.2 billion RMB - 2026E: 33.4 billion RMB - 2027E: 41.4 billion RMB - 2028E: 51.4 billion RMB - The report indicates a decrease in adjusted net profit for 2026 and 2027 compared to previous estimates [8][11] Business Segments - Smartphone segment: - Revenue for 2025 is projected at 186.4 billion RMB, with a year-on-year decrease of 3% - The average selling price (ASP) is expected to increase by 5% in 2026, reaching 1,185 RMB per unit [8] - IoT segment: - Revenue for 2025 is projected at 123.2 billion RMB, with a year-on-year growth of 18% - The report notes that the slowdown in growth is due to national subsidies and increased competition [8] - Internet services: - Revenue for 2025 is projected at 37.4 billion RMB, with a year-on-year growth of 10% [8] - Electric vehicles: - The company aims to deliver 550,000 vehicles in 2026, with a target of 410,000 deliveries in 2025 [8] Valuation - Based on a sum-of-the-parts (SOTP) valuation, the target valuation for the company is 986.7 billion RMB, indicating a potential upside of 33% from the current market value [15]

Investment Rating - The report maintains a "Buy" rating for Xiaomi Group [1] Core Insights - The report highlights the need to wait for a fundamental turning point, with a clearer picture of the AI strategy emerging [6] - Xiaomi's performance in Q4 2025 shows revenue of 116.9 billion RMB, a year-on-year increase of 7%, while adjusted net profit decreased by 24% [8] - The report anticipates a decline in smartphone shipments to 150 million units in 2026, a 9% year-on-year decrease, with an average selling price (ASP) increase of 5% [8] - The IoT segment is expected to see revenue growth of 10% in 2026, despite short-term challenges [8] - The report projects a total revenue of 504.8 billion RMB for 2026, with a net profit of 33.4 billion RMB, reflecting a 15% decrease from previous estimates [8] Financial Data and Profit Forecast - Revenue projections for Xiaomi Group are as follows: - 2024: 365.9 billion RMB - 2025: 457.3 billion RMB - 2026E: 504.8 billion RMB - 2027E: 593.0 billion RMB - 2028E: 698.0 billion RMB - The expected year-on-year growth rates are 35% for 2024, 25% for 2025, 10% for 2026, 17% for 2027, and 18% for 2028 [7] - Adjusted net profit forecasts are: - 2024: 27.3 billion RMB - 2025: 39.2 billion RMB - 2026E: 33.4 billion RMB - 2027E: 41.4 billion RMB - 2028E: 51.4 billion RMB [7] Business Segments - The smartphone segment is projected to generate revenue of 178 billion RMB in 2026, with a decline in shipments and a decrease in gross margin to 8% [8] - The IoT segment is expected to achieve revenue of 135.5 billion RMB in 2026, with a focus on high-end products and international expansion [8] - Internet services are forecasted to reach 41.2 billion RMB in revenue for 2026, maintaining a gross margin of 77% [8] - The electric vehicle segment aims for deliveries of 550,000 units in 2026, with a gross margin of 24.3% [8] Valuation and Target Price - Based on a sum-of-the-parts (SOTP) valuation, the target valuation for Xiaomi Group is set at 986.7 billion RMB, indicating a potential upside of 33% from the current market value [15]

Investment Rating - The investment rating for the company is Neutral with a target price of HKD 37.00, indicating a potential upside of 13.2% from the current price of HKD 32.68 [1][3][13]. Core Insights - The company reported a total revenue of RMB 116.9 billion for Q4 2025, representing a year-on-year increase of 7%. The gross margin improved slightly by 0.2 percentage points to 20.8%, while the adjusted net profit decreased by 24% to RMB 6.35 billion [2][8]. - The company continues to face storage cost pressures and is focusing on advancements in AI and other innovative fields, as well as the international expansion of its automotive and AIoT businesses [2][7]. - The company forecasts total revenues of RMB 493.2 billion for 2026, with an adjusted EPS of RMB 1.53, maintaining previous estimates [7][9]. Financial Overview - Revenue projections for the company are as follows: - 2024: RMB 365.9 billion - 2025: RMB 457.3 billion - 2026E: RMB 493.2 billion - 2027E: RMB 551.0 billion - 2028E: RMB 599.9 billion [6][14]. - The adjusted net profit is expected to be: - 2024: RMB 23.7 billion - 2025: RMB 41.6 billion - 2026E: RMB 33.7 billion - 2027E: RMB 40.7 billion - 2028E: RMB 47.5 billion [6][14]. - The company’s market capitalization is approximately HKD 701.1 billion, with a 52-week high of HKD 60.15 and a low of HKD 31.58 [5][6]. Business Segments Performance - The automotive segment is projected to generate revenue of RMB 106.1 billion in 2025, with a year-on-year growth of 224%, and is expected to achieve positive operating profit [7]. - The AIoT segment is anticipated to generate RMB 123.2 billion in revenue, reflecting an 18% year-on-year increase, with an improved gross margin of 23.1% [7]. - The smartphone business is expected to see a revenue decline of 3%, with a gross margin decrease of 1.8 percentage points to 10.9% [7].

Investment Rating - The report maintains a "Buy" rating for Xiaomi Group [1] Core Viewpoints - The report highlights the need to evaluate performance following earnings announcements, indicating a wait for a fundamental turning point and the emergence of AI strategic visions [6] - Xiaomi's revenue for Q4 2025 reached 116.9 billion RMB, a year-on-year increase of 7%, marking five consecutive quarters of revenue exceeding 100 billion RMB [8] - The report anticipates a decline in smartphone shipments to 150 million units in 2026, a 9% year-on-year decrease, while maintaining an average selling price (ASP) increase of 5% [8] - The Internet of Things (IoT) segment is expected to see revenue growth of 10% in 2026, despite a slowdown due to national subsidies and increased competition [8] - The report projects a total revenue of 504.8 billion RMB for 2026, with a net profit of 33.4 billion RMB, reflecting a 15% decrease from previous estimates [8] - The AI strategy is expected to see an investment of 60 billion RMB from 2026 to 2028, with 16 billion RMB allocated for 2026 [8] Financial Data and Profit Forecast - Revenue projections for Xiaomi Group are as follows: - 2024: 365.9 billion RMB - 2025: 457.3 billion RMB - 2026E: 504.8 billion RMB - 2027E: 593.0 billion RMB - 2028E: 698.0 billion RMB [7] - Adjusted net profit forecasts are: - 2024: 27.3 billion RMB - 2025: 39.2 billion RMB - 2026E: 33.4 billion RMB - 2027E: 41.4 billion RMB - 2028E: 51.4 billion RMB [7] - The report indicates a projected PE ratio of 31 for the main business in 2026, with a target valuation of 986.7 billion RMB, representing a 33% upside potential [8][15]

Investment Rating - The investment rating for the company is Neutral with a target price of HKD 37.00, indicating a potential upside of 13.2% from the current price of HKD 32.68 [1][3][12]. Core Insights - The company reported a total revenue of RMB 116.9 billion for Q4 2025, representing a year-on-year increase of 7%. However, the adjusted net profit decreased by 24% to RMB 6.35 billion, highlighting ongoing pressure from storage costs [2][8]. - The company is focusing on advancements in AI and other innovative fields, with significant investments planned in AI technologies, including a projected RMB 160 billion in 2026 and a cumulative investment of RMB 600 billion over the next three years [7][2]. - The automotive segment is expected to see substantial growth, with revenue projected to increase by 224% year-on-year to RMB 106.1 billion, and the company aims to sell 559,000 vehicles in 2026 [7][2]. - The AIoT business is also anticipated to grow, with revenue expected to rise by 18% to RMB 123.2 billion, and an improvement in gross margin by 2.8 percentage points to 23.1% [7][2]. Financial Overview - Revenue projections for the company are as follows: RMB 365.9 billion in 2024, RMB 457.3 billion in 2025, RMB 493.2 billion in 2026, RMB 551.0 billion in 2027, and RMB 599.9 billion in 2028, with corresponding year-on-year growth rates of 35.0%, 25.0%, 7.9%, 11.7%, and 8.9% respectively [6][14]. - The adjusted net profit is forecasted to be RMB 23.7 billion in 2024, RMB 41.6 billion in 2025, RMB 33.7 billion in 2026, RMB 40.7 billion in 2027, and RMB 47.5 billion in 2028 [6][14]. - The company’s earnings per share (EPS) is expected to be RMB 1.10 in 2024, RMB 1.53 in 2025, and remain stable at RMB 1.53 in 2026, with a slight increase to RMB 1.73 in 2027 and RMB 1.99 in 2028 [6][14]. Valuation - The company’s valuation is based on a sum-of-the-parts (SOTP) approach, with a projected net profit of RMB 39.7 billion in 2026, leading to a price-to-earnings (P/E) ratio of 21.4 times [10][2]. - The valuation for the mobile and AIoT segments is estimated at RMB 721.8 billion, while the automotive and AI innovation business is valued at RMB 230.9 billion [10][2].