Market Overview - US stock futures increased on Monday morning, indicating a continuation of the strong momentum from October, with S&P 500 futures rising 0.3%, Nasdaq 100 futures jumping 0.6%, and Dow Jones Industrial Average futures adding about 0.1% [1] - October was a strong month for stocks, with the S&P 500 rising 2.3%, the Dow gaining 2.5%, and the Nasdaq Composite climbing 4.7%, driven by investor interest in growth and AI-linked companies, particularly Big Tech and the "Magnificent Seven" [2][19] - Optimism regarding easing US-China trade tensions contributed to market gains, although concerns remain in Washington due to a government shutdown delaying key economic reports [2][19] Earnings Reports - Earnings season is active, with about 300 S&P 500 companies having reported third-quarter results, and over 100 more reports expected this week from firms such as Palantir, Super Micro, and AMD [4][20] - Berkshire Hathaway's stock rose over 1% after reporting a 17% profit increase in its third-quarter results, attributed to a mild hurricane season and investment gains [6][10][20] Significant Corporate Developments - IREN stock surged 24% following the announcement of a $9.7 billion cloud services contract with Microsoft, which will utilize Nvidia's GB300 processors to enhance AI and data center infrastructure [8][20] - The GB300 processors will be installed in stages until 2026 at IREN's 750-megawatt campus in Texas, with Microsoft making a 20% prepayment [9][20] Leadership Changes - Warren Buffett will step down as CEO of Berkshire Hathaway in January, with Vice Chair Greg Abel set to take over, while Buffett remains as chairman [11][20] - Berkshire Hathaway's significant cash pile of $381.7 billion as of September is expected to remain intact despite recent investments [11][20] Market Reactions - Xiaomi shares rose over 3% following a lighthearted exchange between Chinese President Xi Jinping and South Korean President Lee Jae Myung, highlighting sensitive security issues in US-China relations [13][20] - Gold prices fell below $4000 per ounce after China removed a tax incentive for gold purchases, although prices are still up more than 50% this year due to demand from central banks and investors [15][16][20]

Group 1 - Southbound funds recorded a net purchase of 54.72 billion HKD today [1] - Xiaomi Group, China National Offshore Oil Corporation, and China Mobile received net purchases of 10.29 billion HKD, 9.93 billion HKD, and 4.61 billion HKD respectively [1] - SMIC (Semiconductor Manufacturing International Corporation) had the highest net sell-off, amounting to 13.81 billion HKD [1]

Core Viewpoint - Xiaomi Group's stock price increased by 3.1%, reaching HKD 44.54, with a trading volume of HKD 48.38 billion, driven by positive news regarding its automotive division [1] Group 1: Automotive Performance - Xiaomi's official Weibo announced that by October 2025, the company expects to deliver over 40,000 vehicles consistently [1] - According to Guojin Securities, Xiaomi's automotive deliveries exceeded 290,000 units in the first ten months of this year, more than doubling last year's total [1] - Xiaomi's official Weibo also reported that the total payment amount across all channels surpassed HKD 18.2 billion by October 31, 2025 [1] Group 2: Market Sentiment and Innovation - Dongfang Securities noted that some investors express concerns about Xiaomi's technological innovation and execution capabilities, particularly regarding the sustainability of growth across its automotive and smart home businesses [1] - The firm believes that Xiaomi has significantly improved its competitiveness in new feature development and product manufacturing, establishing a stronger operational ecosystem [1] - Xiaomi's ability to innovate and scale its products is expected to continue enhancing, driving sustained growth across its automotive and smart home sectors [1]

Group 1 - Xiaomi Group's stock price increased by over 4%, reaching HKD 45.06, with a trading volume exceeding HKD 6.1 billion [2] - The stock opened at HKD 43.80 and closed at HKD 43.20 the previous day, with a trading volume of 139 million shares [3] - The company's total market capitalization is HKD 1.17 trillion, with a TTM price-to-earnings ratio of 28.65 [3] Group 2 - Xiaomi's automotive division announced that it expects to deliver over 40,000 vehicles by October 2025 [4] - The delivery cycle for Xiaomi vehicles has been shortened significantly, with the YU7 model's delivery time reduced by 10 weeks to 35-38 weeks [4] - According to Citigroup, Xiaomi's electric vehicle deliveries from January to September may have surpassed 308,000 units, achieving 88% of its 2025 target of 350,000 units [4]

Group 1 - The core viewpoint of the news highlights the significant performance of AI-related stocks in the Hong Kong market, with notable gains from companies like Meitu, DaMai Entertainment, and Xiaomi Group [1][4] - Xiaomi's automotive division reported over 40,000 vehicle deliveries in October, ranking eighth globally with a year-on-year growth of 208.7%, indicating it as the fastest-growing automotive brand [1][4] - Citigroup forecasts that Xiaomi's total vehicle shipments for the year could approach 400,000 units, reflecting strong market demand [1][4] Group 2 - The Hong Kong Internet ETF (513770) has seen a price increase of 1.18%, with significant net inflows of 426 million yuan over the past five days, indicating strong investor interest [2][3] - The ETF's top three holdings are Alibaba, Tencent, and Xiaomi, which together account for over 46% of the fund, showcasing the dominance of these companies in the AI and internet sectors [4][5] - East China Securities notes that the acceleration of AI application innovations is driving a transformation in content production, with a focus on generative video models [4]

Core Viewpoint - The Hong Kong stock market saw a collective rise in its three major indices, with the Hang Seng Tech Index experiencing fluctuations but ultimately gaining over 0.5% in the afternoon session. [1] Market Performance - Technology stocks showed a mixed performance, while coal stocks strengthened and oil stocks rose broadly. [1] - The main ETF, the Hang Seng Tech Index ETF (513180), followed the index with a slight increase, with notable gains in holdings such as NIO, Xpeng Motors, Xiaomi Group, Kingdee International, Li Auto, and Trip.com, particularly Xiaomi Group which surged over 4% in the afternoon. [1] Company Updates - On November 1, Xiaomi Auto announced via its official Weibo that it expects to deliver over 40,000 vehicles monthly by October 2025. [1] - Xiaomi's official Weibo also reported that as of October 31, 2025, the total payment amount across all channels exceeded 18.2 billion. [1] Analyst Insights - A recent report from Dongfang Securities highlighted that some investors have concerns regarding Xiaomi's technological innovation and execution capabilities, raising doubts about the sustainability of growth across its various business segments. [1] - However, the report argues that Xiaomi's competitiveness in new feature development and product manufacturing has significantly improved, establishing a stronger operational ecosystem. [1] - The company's ability to innovate and scale its products is expected to enhance, driving sustained growth across its automotive and smart home businesses. [1]

Core Viewpoint - Xiaomi Group-W (1810.HK) shares increased by over 4%, reaching HKD 45.06, following the announcement of its automotive delivery plans for October 2025 [1] Delivery Plans - Xiaomi Automotive announced a continuous delivery volume exceeding 40,000 units by October 2025 [1] - The delivery cycle for various models has been significantly shortened compared to the original timeline: - YU7: Expected delivery in 35-38 weeks, shortened by 10 weeks - YU7 Pro: Expected delivery in 34-37 weeks, shortened by 8 weeks - YU7 Max: Expected delivery in 32-35 weeks, shortened by 4 weeks [1] - The reduction in delivery cycles is attributed to increased production capacity [1]

Core Viewpoint - Jianyin International has slightly lowered the target price for Xiaomi Group-W (01810) by 2.9% from HKD 69 to HKD 67 while maintaining an "Outperform" rating due to adjustments in profit forecasts for IoT and smartphone margins [1] Financial Performance - The forecast for Xiaomi's Q3 2025 revenue is expected to be slightly below institutional expectations, with a year-on-year increase of 22% to RMB 112.7 billion, but a quarter-on-quarter decrease of 3% [1] - Adjusted net profit for Q3 is projected to be RMB 9.7 billion, reflecting a year-on-year increase of 55% but a quarter-on-quarter decrease of 10% [1] - The smartphone gross margin is anticipated to be under pressure, estimated at around 11%, due to rising component prices, particularly for LPDDR4X smartphones [1] IoT and Network Services - Growth in the IoT segment is expected to significantly slow down, primarily due to a high base from the previous year influenced by government subsidies, with a reduction in subsidies this quarter [1] - Despite the impact of price wars being limited, the IoT segment is projected to grow by 25% and 22% in the fiscal years 2025 and 2026, respectively [1] - For network services, growth is anticipated at 9% and 6% for the fiscal years 2025 and 2026, respectively [1] Electric Vehicle (EV) Performance - Xiaomi's EV deliveries for Q3 are expected to reach 108,800 units, representing a quarter-on-quarter increase of 34% [1] - The average selling price of EVs continues to rise, benefiting from the contribution of the YU7 model, with projected EV revenue of RMB 28.7 billion [1]

Core Viewpoint - Jianyin International has slightly lowered the target price for Xiaomi Group-W (01810) by 2.9% from HKD 69 to HKD 67 while maintaining an "Outperform" rating due to adjustments in profit margins for IoT and smartphones [1] Financial Performance - The forecast for Xiaomi's Q3 2025 revenue is expected to be slightly below market expectations, with a year-on-year increase of 22% to RMB 112.7 billion, but a quarter-on-quarter decrease of 3% [1] - Adjusted net profit for Q3 is projected to be RMB 9.7 billion, a year-on-year increase of 55% but a quarter-on-quarter decrease of 10% [1] - The smartphone gross margin is anticipated to be under pressure, expected to be around 11% due to rising component prices, particularly for LPDDR4X smartphones [1] IoT and Electric Vehicle (EV) Growth - Growth in the IoT segment is expected to slow significantly, primarily due to a high base from the previous year influenced by government subsidies, with a reduction in subsidies this quarter [1] - Despite the impact of price wars being limited, the IoT segment is projected to grow by 25% and 22% in the fiscal years 2025 and 2026, respectively [1] - For the EV sector, Q3 deliveries are expected to reach 108,800 units, a quarter-on-quarter increase of 34%, with revenue from EVs projected at RMB 28.7 billion [1]

Xiaomi Corp. (1810.HK) Conference Call Summary Company Overview - **Company**: Xiaomi Corp. (1810.HK) - **Market Cap**: HK$1.1 trillion / $144.0 billion - **Enterprise Value**: HK$921.6 billion / $118.6 billion - **Current Price**: HK$43.20 - **Target Price**: HK$56.50 (implying 30.8% upside) [1][5] Key Industry Insights - **Smartphone Market**: Expected to face near-term speed bumps but favorable risk-reward on a 12-month basis [1] - **AIoT (Artificial Intelligence of Things)**: Projected revenue growth of 6% in 3Q25 and 9% in 2026, with sequential growth accelerating [10][51] - **EV (Electric Vehicle)**: Anticipated first-time IFRS net profit of Rmb0.7 billion in 3Q25, driven by higher operating leverage [16] Financial Projections - **Revenue Forecasts**: - 2024: Rmb365.9 billion - 2025E: Rmb465.3 billion - 2026E: Rmb595.1 billion - 2027E: Rmb710.8 billion [5][13] - **EBITDA**: - 2024: Rmb30.8 billion - 2025E: Rmb55.3 billion - 2026E: Rmb62.6 billion - 2027E: Rmb79.4 billion [5][13] - **EPS (Earnings Per Share)**: - 2024: Rmb1.07 - 2025E: Rmb1.57 - 2026E: Rmb1.91 - 2027E: Rmb2.38 [5][13] Margin and Profitability - **Gross Profit Margin (GPM)**: Expected to decline to ~10% in 2026E due to rising memory costs, compared to ~11% in 2H25E [10][19] - **Net Profit Resilience**: Core net profit expected to remain flat year-over-year in 2026E, supported by increased contributions from AIoT and internet services [10][19] Competitive Landscape - **Market Position**: Xiaomi's comparative advantages expected to strengthen against peers due to larger scale and ecosystem [10][19] - **Smartphone Contribution**: Smartphone gross profit contribution is projected to decrease to 24% of total gross profit by 2026E [47] Challenges and Risks - **Memory Cost Pressure**: Anticipated challenges in mass model shipments due to rising memory costs, with a significant impact on pricing strategies [30][32] - **Inventory Management**: Longer inventory days observed, which may affect gross profit margins [21][26] Upcoming Events to Monitor - **Singles' Day GMV**: Key indicator of consumer demand and sales performance [17] - **3Q25 Results**: Scheduled for late November, expected to provide insights into revenue and profit growth [17] - **EV Manufacturing Capacity**: Progress on ramping up manufacturing capacity and new model launches [17][18] Summary of Key Metrics - **P/E Ratio**: 16.6 for 2024, increasing to 25.3 in 2025E [11] - **CROCI (Cash Return on Capital Invested)**: Expected to be 21.7% in 2024, declining to 29.8% by 2027E [11] - **Free Cash Flow Yield**: 7.2% in 2024, decreasing to 2.4% in 2026E [11] Conclusion - **Investment Outlook**: Despite short-term challenges, the long-term risk-reward profile for Xiaomi remains favorable, with a target price indicating significant upside potential [1][5]