Ping An Securities·2025-11-19 09:37Investment Rating - The report maintains a "Recommended" investment rating for Xiaomi Group-W (1810.HK) [1][6]. Core Insights - In Q3 2025, Xiaomi achieved a revenue of 113.1 billion yuan, representing a year-on-year increase of 22.3%, with an adjusted net profit of 11.3 billion yuan, up 80.9% year-on-year [3]. - The automotive business turned profitable in Q3, with a delivery volume of 108,796 units, a year-on-year increase of 173.4%, and automotive revenue reaching 28.3 billion yuan, up 197.9% year-on-year [5]. - The smartphone business faced pressure from rising storage costs, with Q3 smartphone shipments exceeding 43 million units, a slight increase of 0.5% year-on-year, and revenue of 46 billion yuan, down 3.1% year-on-year [5]. - The IoT and consumer products segment saw a revenue increase of 5.6% year-on-year, with smart home appliances experiencing a decline due to reduced government subsidies [5]. Financial Projections - Revenue projections for Xiaomi are set at 365.9 billion yuan for 2024, 471.1 billion yuan for 2025, and 601.1 billion yuan for 2026, with year-on-year growth rates of 35.0%, 28.7%, and 27.6% respectively [4][11]. - Net profit forecasts are adjusted to 44.1 billion yuan for 2025, 52.4 billion yuan for 2026, and 65.3 billion yuan for 2027, reflecting a significant increase from previous estimates [6][11]. - The gross margin for the automotive business reached 25.5% in Q3, while the smartphone business gross margin was 11.1%, down approximately 0.6 percentage points year-on-year [5]. Key Financial Ratios - The report highlights a projected return on equity (ROE) of 19.0% for 2025, with a price-to-earnings (P/E) ratio of 21.9 and a price-to-book (P/B) ratio of 4.2 [4][11].