Guosen International·2025-11-19 13:58Investment Rating - The investment rating for the company is "Buy" with a target price of HKD 53.5 per share, indicating a potential upside of 31.2% from the recent closing price of HKD 40.78 [6]. Core Insights - The company achieved record high revenue and profit in Q3 2025, driven by effective execution of its "high-end, full ecosystem, and globalization" strategy, despite facing challenges from rising storage costs [5][6]. - The automotive segment reported its first profit in Q3 2025, with revenue growing by 199.2% year-on-year, contributing significantly to overall growth [2]. - The smartphone segment showed resilience with a slight revenue decline of 3.1%, while maintaining a strong market share in the high-end segment [3]. - Internet services continued to grow steadily, with revenue reaching a historical high, supported by increased advertising income and user engagement [4]. Summary by Sections Q3 Performance - Revenue for Q3 2025 increased by 22.3% year-on-year to HKD 1131.2 billion, slightly above market expectations [1]. - Gross margin was reported at 22.9%, exceeding expectations, while adjusted net profit surged by 80.9% to HKD 113.1 billion [1]. Automotive Business - The automotive segment generated revenue of HKD 290.1 billion in Q3 2025, accounting for 25.6% of total revenue, with a significant year-on-year growth of 199.2% [2]. - The company delivered 109,000 new vehicles in the quarter, marking a 173.4% increase year-on-year, with the XiaomiYU7 series leading domestic SUV sales [2]. Smartphone and AIoT - The smartphone division reported revenue of HKD 460.0 billion, a slight decline of 3.1%, with a shipment of 43.3 million units, reflecting a 0.5% increase [3]. - The IoT and lifestyle products segment achieved revenue of HKD 276.0 billion, growing by 5.6% year-on-year, with a gross margin of 23.9% [3]. Internet Services - Internet services revenue reached HKD 94.0 billion, a 10.8% increase year-on-year, with advertising revenue growing by 17.4% [4]. - The global monthly active users reached 741.7 million, reflecting an 8.2% year-on-year increase, indicating improved user engagement and monetization [4].