Ge Long Hui·2025-12-02 19:55Core Viewpoint - Xiaomi reported Q3 2025 performance with total revenue of 113.1 billion yuan (+0.5% vs consensus), year-on-year growth of 22%; adjusted net profit reached 11.3 billion yuan (+12.6% vs consensus of 10 billion yuan), year-on-year growth of 81%, corresponding to a net profit margin of 10.0% [1] Group 1: Smartphone Business - Smartphone shipments in Q3 were 43.3 million units, a year-on-year increase of 0.5%, with a market share of 13.6%; market share in China was 16.7% [2] - Average Selling Price (ASP) was 1,062 yuan, down 4% year-on-year; smartphone revenue was 46 billion yuan (+0.3% vs consensus), year-on-year decline of 3.1% [2] - The increase in storage prices has led to a decline in gross margin, with Q3 smartphone gross margin at 11.1%; Q4 smartphone gross margin is expected to be 10% [2] Group 2: IoT and Internet Business - In Q3, IoT revenue was 27.6 billion yuan (-1.9% vs consensus), year-on-year growth of 5.5%; gross margin improved by 1.4 percentage points to 23.9% [3] - Major appliances faced pressure with a year-on-year revenue decline of 15% due to competition and subsidy reductions; attention is advised on overseas expansion and market share changes [3] - Internet business revenue for Q3 was 9.4 billion yuan (+2.2% vs consensus), year-on-year growth of 10.8% [3] Group 3: Automotive Business - The automotive segment achieved profitability for the first time, with Q3 deliveries of 108,800 units and an ASP of 260,000 yuan; gross margin decreased by 0.9 percentage points to 25.5% [3] - November deliveries exceeded 48,000 units, with expectations of nearing full production by year-end; total annual deliveries are projected to exceed 400,000 units [3] - Q3 automotive revenue was 29 billion yuan, with other related businesses contributing 700 million yuan [3] Group 4: Financial Forecast and Valuation - Projected revenues for Xiaomi Group in 2025 and 2026 are 471.7 billion yuan and 545 billion yuan (year-on-year growth of 29% and 16% respectively); adjusted net profits are forecasted at 43.3 billion yuan and 44.9 billion yuan (year-on-year growth of 59% and 4%) [3] - The company is assigned a 20x PE for its main business in 2026 and a 2.5x PS for the automotive segment, with a target price of 51.1 HKD and a "buy" rating [3]