XIAOMI(01810) 第一上海·2025-05-29 05:40Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 67.9, indicating a potential upside of 29.28% from the current price of HKD 52.50 [6][10]. Core Insights - The company reported revenue of RMB 111.3 billion for Q1 2025, a year-on-year increase of 47.4%, surpassing market expectations of RMB 109 billion. The overall gross margin improved to 22.8%, up 0.5 percentage points year-on-year. Net profit reached RMB 10.9 billion, a significant year-on-year increase of 161.0%, with adjusted net profit at RMB 10.7 billion, up 64.5%, exceeding market expectations of RMB 9.1 billion [2]. - The company aims to invest RMB 200 billion in R&D from 2026 to 2030 to strengthen its technological moat, with a focus on AI and chip technology, expecting to invest RMB 7.5 billion in AI this year [2]. - The smartphone segment saw revenue of RMB 50.6 billion, a year-on-year increase of 8.9%, with a market share of 18.8%, marking a return to the top position in domestic smartphone shipments after ten years. The average selling price (ASP) of smartphones increased by 5.8% to RMB 1,211 [3]. - The Internet of Things (IoT) segment experienced explosive growth, with revenue increasing by 58.7% to RMB 32.3 billion, and a gross margin of 25.2%, up 5.4 percentage points year-on-year [4]. - The automotive business reported revenue of RMB 18.6 billion, with a gross margin of 23.2%, and a significant reduction in operating losses, with the new luxury SUV model YU7 receiving positive market feedback [5]. Financial Summary - The company’s projected revenues for 2025, 2026, and 2027 are RMB 495.6 billion, RMB 627.0 billion, and RMB 721.4 billion, respectively. Adjusted net profits are expected to be RMB 45.6 billion, RMB 57.8 billion, and RMB 70.2 billion for the same years [6][7]. - The gross margin is projected to improve from 21.21% in 2023 to 23.33% by 2027, reflecting enhanced operational efficiency and product mix [13]. - The company’s earnings per share (EPS) is forecasted to grow significantly from RMB 0.69 in 2023 to RMB 2.61 in 2027, indicating a robust growth trajectory [7][13].