Zhi Tong Cai Jing·2025-08-20 09:27Core Viewpoint - Macquarie has downgraded the target price for Xiaomi Group-W (01810) from HKD 69.32 to HKD 61, while maintaining an "Outperform" rating, but has removed the stock from its recommended list in the Asia-Pacific region, anticipating a decrease in the company's profitability in the second half of the year [1] Financial Performance - Xiaomi's second-quarter gross profit exceeded expectations by 1%, benefiting from an expansion in gross margin, but operating expenses increased, leading to an operating profit that fell short of expectations by 15% [1] - The company is expected to see flat quarterly revenue due to the seasonal weakness in IoT products offsetting growth in smartphone and electric vehicle sales [1] Sales Forecast - Macquarie has reduced its forecast for Xiaomi's electric vehicle sales by 24,000 units, reflecting slower-than-expected production ramp-up at the new factory [1] - The quarterly gross margin is anticipated to contract by 0.7 percentage points due to intensified competition in the smartphone market and rising memory costs [1] - The gross margin for electric vehicles is expected to decline by 0.5 percentage points, influenced by the delivery of the YU7 model [1]