Zhi Tong Cai Jing·2025-11-03 05:01Core 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]