China's Xiaomi posts first profit from EV and AI businesses as quarterly earnings surge

Core Viewpoint - Xiaomi has achieved profitability in its electric vehicle (EV) and artificial intelligence (AI) sectors for the first time in Q3, with overall profits increasing by nearly 81% year-on-year [1]. Financial Performance - The adjusted net profit for the three months ending September 30 reached 11.3 billion yuan (US$1.6 billion), with a pre-adjustment profit increase of 129.5% year-on-year [2]. - Revenue for the quarter rose by 22.3% to 113.1 billion yuan [2]. EV and AI Business Growth - Xiaomi sold 108,796 EVs in Q3, marking an all-time high, and the revenue from its EV, AI, and other new initiatives reached 29 billion yuan, tripling from the same period last year [3]. - The surge in EV sales and profits indicates Xiaomi's increasing focus on the EV sector and its growing influence in this market, suggesting a promising growth trajectory [5]. Smartphone Segment Performance - Revenue from the smartphone segment, which constitutes about three-quarters of total revenue, grew only 1.6% to 84.1 billion yuan, partly due to the late reflection of sales from the newly launched Xiaomi 17 series [4][5]. Future Outlook - Xiaomi's president, Lu Weibing, stated that the company is on track to deliver 350,000 EVs by the end of the week, achieving its annual target ahead of schedule [6]. - Lu also mentioned that rising memory chip prices could negatively impact smartphone vendors, leading to potential market consolidation [7]. - To counteract these challenges, Xiaomi plans to optimize its product mix and increase the average selling price as it continues to target the premium segment [8].