Zhi Tong Cai Jing·2025-10-27 03:26Core Viewpoint - Xiaomi Group's stock experienced a significant decline, reaching a new low since April 2023, primarily due to expectations of lower-than-expected earnings in the upcoming Q3 2025 report [1] Financial Performance Expectations - 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 decrease of 5% [1] - The decline in smartphone gross margins and IoT revenue is attributed to unfavorable regional mix and rising memory prices, while internet and electric vehicle businesses are expected to meet projections [1] Business Segment Analysis - Huatai Securities anticipates that Xiaomi's automotive business may achieve profitability in Q3 [1] - Despite challenges in the smartphone sector due to rising storage costs, the company is maintaining a high-end strategy, which is expected to mitigate some industry pressures, with a projected gross margin of around 11% for the second half of the year [1] - The IoT business is expected to maintain strong gross margins, even with the impact of reduced government subsidies on revenue growth, as there were no promotional events in Q3 [1] - The internet business continues to show steady performance [1]