Investment Rating - The report maintains a "Buy" rating for Xiaomi Group with a target price of 71.65 HKD, based on a 32x PE valuation for 2026 [3][6]. Core Insights - The report highlights strong performance in automotive deliveries and sales of the Xiaomi 17 series, with a notable increase in monthly deliveries exceeding 40,000 units in September 2025 [2][9]. - The company is expected to see significant growth in earnings per share, projected at 1.63, 2.06, and 2.60 CNY for 2025, 2026, and 2027 respectively [3][10]. - Revenue forecasts show a recovery with expected growth rates of 35% in 2024 and 31% in 2025, followed by 24% growth in 2026 and 2027 [5][10]. Financial Summary - Revenue (in million CNY) is projected to grow from 270,970 in 2023 to 735,676 in 2027, with a compound annual growth rate (CAGR) of approximately 24% [5]. - Operating profit is expected to increase significantly from 20,009 million CNY in 2023 to 74,753 million CNY in 2027, reflecting a growth rate of 610% in 2024 [5]. - Net profit attributable to the parent company is forecasted to rise from 17,475 million CNY in 2023 to 67,848 million CNY in 2027, with a growth rate of 606% in 2024 [5]. - The gross margin is expected to improve from 21.7% in 2023 to 24.0% in 2027, while the net margin is projected to increase from 6.4% to 9.2% over the same period [5].

Core Insights - The Hubei Provincial Party Secretary Wang Zhonglin visited the Wuhan East Lake New Technology Development Zone to investigate the development of the smart terminal industry [1] - Wang expressed hope for Xiaomi to accelerate the second phase of its smart home appliance factory project in Wuhan, aiming to promote the production of advanced smart terminal technology products in Hubei [1] - The initiative aims to establish a strong industrial cluster effect by attracting more supply chain enterprises, thereby injecting robust momentum into the growth of Hubei's smart terminal industry [1] Company Insights - Xiaomi Group's Chairman Lei Jun engaged in discussions with Wang Zhonglin during the visit, highlighting the company's role in the local smart manufacturing sector [1] - The focus on smart home appliances indicates Xiaomi's commitment to expanding its manufacturing capabilities in Hubei, which could enhance its competitive edge in the smart terminal market [1] Industry Insights - The visit underscores the Hubei government's strategy to leverage leading enterprises like Xiaomi to foster industrial development and innovation in the smart terminal sector [1] - The emphasis on creating a demonstration benchmark in smart manufacturing reflects a broader trend of regional governments supporting high-tech industries to drive economic growth [1]

Core Viewpoint - Lei Jun responded to questions regarding the REDMI K90 series, focusing on speaker, camera features, and phone accessories [1] Group 1: Speaker Features - The K90 Pro Max features a large rear speaker with two layers of protection: an outer metal dust cover and an inner dust net, passing the IP68 dust and water resistance test [3] - Users can utilize the built-in speaker cleaning function or visit service points for deep cleaning if dust accumulates [3] Group 2: Camera Features - The K90 series supports a "Super Moon" feature that activates automatically when zooming in on the moon at 20x or more [4] - The camera watermark function has been significantly upgraded, offering various types of watermarks, including motion, standard, check-in, classic, and film watermarks, with enhanced customization options [4] - Users can customize watermark details such as border position, frame color, and personalized labels, with varying levels of customization across different watermark types [4]

Core Viewpoint - The Hubei Provincial Party Secretary Wang Zhonglin emphasized the importance of accelerating the construction of Xiaomi's smart home appliance factory in Wuhan, aiming to enhance the smart terminal industry in Hubei and attract more supply chain enterprises to form a strong industrial cluster [1] Group 1: Company Development - Xiaomi Group is encouraged to expedite the second phase of its smart home appliance factory project in Wuhan [1] - The company is expected to promote the transformation and production of advanced technology products in Hubei [1] Group 2: Industry Impact - The initiative aims to create a demonstration benchmark in the field of smart manufacturing [1] - The focus is on leveraging leading enterprises to attract more supply chain companies, thereby injecting strong momentum into the growth of Hubei's smart terminal industry [1]

Core Insights - The automotive delivery volume is steadily increasing, indicating potential profitability at the operational level [1] - The smartphone gross margin is expected to be under pressure due to rising storage costs, with hopes that the high-end shift of the Xiaomi 17 series will mitigate this impact in Q4 [2] Financial Projections - Adjusted revenue forecasts for Xiaomi Group (1810.HK) for FY2025E-FY2027E are set at RMB 482.3 billion, 634.7 billion, and 750.6 billion respectively, down from previous estimates of RMB 489.1 billion, 641.8 billion, and 758.4 billion [1] - Adjusted net profit forecasts are revised to RMB 43.6 billion, 67.9 billion, and 83.3 billion for the same period, compared to prior estimates of RMB 45.4 billion, 68.1 billion, and 83.6 billion [1] - The target price for Xiaomi Group is adjusted to HKD 65.7, maintaining a "Buy" rating [1] Automotive Sector Performance - The automotive delivery volume is expected to reach approximately 109,000 units in Q3, with an anticipated increase in average selling price (ASP) due to the ramp-up of Yu7 deliveries, leading to an estimated automotive sales revenue of around RMB 29.2 billion [1] - Xiaomi's automotive division is projected to achieve operational profitability in Q3 due to scale effects and cost reduction measures [1] Smartphone Market Dynamics - In Q3 2025, global smartphone shipments increased by 2.6% year-on-year, with Xiaomi's shipments rising by 1.8% to 43.5 million units, capturing a market share of 13.5%, a slight decline of 0.1 percentage points year-on-year [2] - In the Chinese market, Xiaomi's smartphone shipments decreased by 1.7% to 10 million units in Q3 2025 [2] - The smartphone gross margin is expected to decline by 0.5 percentage points to 11% in Q3 due to the impact of rising storage costs and a decrease in sales proportion from the Chinese market [2] IOT and Internet Revenue - IOT revenue is projected to grow by 6% year-on-year to RMB 27.7 billion in Q3, although it is expected to decline quarter-on-quarter due to seasonal factors and subsidy reductions [2] - The IOT gross margin is anticipated to increase by 0.5 percentage points to 23% [2] - Internet revenue is expected to rise by 7.7% year-on-year, maintaining a gross margin of 75.4% quarter-on-quarter [2]

Investment Rating - The report maintains a "Buy" rating for Xiaomi Group (1810.HK) with a target price adjusted to HKD 65.7 [7][13]. Core Insights - The automotive delivery volume is steadily increasing, indicating potential profitability at the operational level. The report anticipates that Xiaomi's automotive deliveries will approach 109,000 units in Q3, with an expected automotive sales revenue of approximately RMB 29.2 billion [3][11]. - The smartphone segment is facing pressure on gross margins due to rising storage costs, but the upcoming Xiaomi 17 series is expected to shift towards higher-end models, which may mitigate these impacts in Q4 [3][11]. - The Internet of Things (IoT) segment is projected to show stable revenue and gross profit contributions, with expected revenue growth of 6% year-on-year in Q3 [11]. Financial Summary - Total revenue projections for Xiaomi Group are as follows: RMB 270.971 billion in 2023, RMB 365.932 billion in 2024, RMB 482.278 billion in 2025E, RMB 634.727 billion in 2026E, and RMB 750.562 billion in 2027E, reflecting a growth rate of 35.0% in 2024 and 31.8% in 2025E [5][16]. - Adjusted net profit forecasts are RMB 19.273 billion for 2023, RMB 27.235 billion for 2024, RMB 43.629 billion for 2025E, RMB 67.894 billion for 2026E, and RMB 83.319 billion for 2027E, with a significant growth of 126.3% in 2023 [5][16]. - The gross profit margin is expected to be 21.2% in 2023, slightly decreasing to 20.9% in 2024, and then improving to 22.6% by 2025E [5][16]. Revenue Breakdown - Smartphone revenue is projected to decline slightly in the short term, with a year-on-year decrease of 5.8% expected in 2023, but a recovery is anticipated in subsequent years [14]. - IoT revenue is expected to grow steadily, with projections of RMB 134.976 billion by 2025E, reflecting a year-on-year growth of 29.7% [14]. - Automotive revenue is projected to reach RMB 106.647 billion by 2025E, with a significant year-on-year growth of 225.6% [14]. Valuation Metrics - The report assigns a price-to-earnings (PE) ratio of 30x for Xiaomi's core business (smartphones, IoT, and internet services) for FY2025, reflecting a premium due to the synergy across hardware and AI potential [13][18]. - The automotive business is valued at a price-to-sales (PS) ratio of 2.5x for FY2025, based on Xiaomi's established supply chain management capabilities and brand strength [13][18].

Core Viewpoint - Xiaomi Group-W (01810.HK) has experienced a significant decline in stock price, dropping over 3% and accumulating a total decrease of 25% over the past month [2] Group 1 - As of the latest update, Xiaomi's stock price is reported at 44.42 HKD, reflecting a decrease of 3.01% [2] - The trading volume for Xiaomi's shares reached 5.994 billion HKD [2]

Core Viewpoint - Xiaomi Group's stock has dropped over 3% and has seen a cumulative decline of 25% in the past month, attributed to rising memory chip prices and declining sales in the Chinese market [1] Financial Performance - As of the latest report, Xiaomi's stock is trading at 44.42 HKD with a transaction volume of 5.994 billion HKD [1] - Citigroup forecasts that Xiaomi's adjusted net profit will reach 10.2 billion RMB, reflecting a year-on-year growth of 64% but a quarter-on-quarter decline of 5% [1] Market Conditions - The storage chip market is currently experiencing a price surge, which has been acknowledged by Xiaomi's founder Lei Jun, who noted significant increases in memory prices [1] - According to Guotai Junan Securities, Xiaomi's smartphone gross margin is expected to decline slightly by 0.5 percentage points to 11% in Q3 due to the impact of rising storage prices and a decrease in sales proportion from the Chinese market [1] Product Performance - The total sales of the Xiaomi 17 series, released at the end of September, have increased by 30% year-on-year, with the Pro version accounting for over 80% of sales, indicating successful high-end product positioning [1] - The steady increase in automotive delivery volumes is anticipated to contribute positively to operational profitability [1] Future Outlook - Xiaomi is expected to announce its Q3 2025 earnings on November 18, with overall performance likely to be slightly below Citigroup's expectations due to lower smartphone gross margins and IoT revenue [1]

Core Viewpoint - Xiaomi Group's stock has dropped over 3% and has seen a cumulative decline of 25% in the past month, attributed to rising memory chip prices and a decrease in sales in the Chinese market [1] Group 1: Financial Performance - As of the latest report, Xiaomi's stock is trading at 44.42 HKD with a trading volume of 5.994 billion HKD [1] - Citigroup forecasts that Xiaomi's adjusted net profit will reach 10.2 billion RMB, reflecting a year-on-year growth of 64% but a quarter-on-quarter decline of 5% [1] - The anticipated gross margin for Xiaomi smartphones is expected to decline by 0.5 percentage points to 11% in Q3 due to the impact of rising memory prices and a decrease in sales in the Chinese market [1] Group 2: Product Performance - The total sales of the recently launched Xiaomi 17 series have increased by 30% year-on-year, with the Pro version accounting for over 80% of sales, indicating successful high-end product positioning [1] - The performance of the electric vehicle segment is showing steady improvement, which may contribute positively to the company's overall profitability [1] Group 3: Market Outlook - Xiaomi is set to announce its Q3 2025 earnings on November 18, with expectations that overall performance may slightly underperform due to lower-than-expected smartphone gross margins and IoT revenue [1] - The decline in IoT revenue is attributed to the weakening effect of subsidies in China [1]

Group 1 - The Hong Kong Hang Seng Tech Index has fallen by over 1% [1] - Xiaomi Group's stock price has decreased by more than 3% [1]