Financial Data and Key Metrics Changes - Total revenue for Q3 2025 reached approximately $82.5 million, marking a 1.1% year-over-year increase and the ninth consecutive quarter of growth [11][4] - Gross margin remained above 48%, with GAAP net margin expanding by more than 23.6 percentage points year-over-year to 18.2% [5][16] - Non-GAAP net margin reached 24.4%, supported by improved gross margin and expense efficiency [5][16] Business Line Data and Key Metrics Changes - PaaS business generated $59.2 million, a 2.4% year-over-year increase, with the number of premium customers reaching 280 [11][12] - SaaS and others business generated $11.5 million, a 15.4% year-over-year increase, driven by growth in cloud software products [12] - Revenue from smart solutions reached $11.8 million, with a focus on scalable high-value solutions [12][15] Market Data and Key Metrics Changes - In the China market, AI Toy showed healthy growth with over 50 customers launching products powered by Tuya [12] - In the European market, demand for AI-powered solutions continued to rise, with new industrial clients added in the energy and HVAC sectors [13] - In North America, AI-enabled products like smart bird feeders recorded healthy growth, validating the commercial potential of niche scenarios [14] Company Strategy and Development Direction - The company continues to embrace AI, with smart devices equipped with AI capabilities accounting for 93.99% of total shipments [8] - A new AI Agent App is in global beta testing, aimed at developing a universal AI life assistant for users [9] - The company is focused on optimizing product mix and operating efficiency while maintaining key investments in business development [5][16] Management's Comments on Operating Environment and Future Outlook - Management noted that the external environment remains volatile, with cautious customer demand due to macro uncertainties [4] - For Q4 2025, management anticipates a soft demand environment compared to the previous year, but remains optimistic about long-term growth driven by AI adoption [21][25] - The company believes AI will enhance user experience and lower barriers for new users, contributing to future growth [24][34] Other Important Information - Operating net cash flow grew to $30 million, a 25.7% increase year-over-year, with a net cash balance above $1 billion [16][17] - The platform had 1.62 million registered developers, a 23% year-over-year increase, indicating strong engagement in the developer ecosystem [17][18] Q&A Session Summary Question: Business outlook for Q4 and 2026 - Management expects soft demand in Q4 due to global macroeconomic uncertainties but is optimistic about long-term growth driven by AI adoption [21][25] Question: Details on the AI home agent and its impact - The AI assistant is designed to simplify user interactions with smart devices, aiming to lower barriers for new users and enhance overall user experience [30][34] Question: Recovery progress in overseas markets and AI commercialization - Management noted stable cost levels due to recent trade agreements and highlighted breakthroughs in AI applications across various sectors, including toys [41][46] Question: Reasons for decline in smart solutions revenue and growth outlook - Management anticipates a better year in 2026 with less market turbulence and expects AI features to become standard in new projects, driving growth [50][51]

Financial Performance - Tuya's total revenue for Q3 2025 was $82.5 million, a 1% year-over-year increase[9] - The company's gross margin was 48% in Q3 2025[9] - Non-GAAP operating profits reached $8.9 million, representing an 11% margin, a 21% year-over-year increase[9] - Non-GAAP net profits were $20.1 million, with a 24% margin[9] - GAAP net profits were $15.0 million, with an 18% margin, a 442% year-over-year increase[9] - The company's net cash balance stood at $1.027 billion as of September 30, 2025[9] Business Highlights - Tuya is the largest 3rd party AI developer platform globally[9] - International revenue accounts for 85%~90% of the total revenue[9] - The company has a dividend for 2025 H1 of $33 million[9] - The current market capitalization is between $1.25 billion and $1.7 billion[9] - The company has served approximately 7,000 global brands[12] - Tuya's technology powers approximately 880 million smart devices[12]

Core Viewpoint - Xiaomi Group demonstrates strong confidence in its future growth through significant stock buybacks and personal share purchases by its founder, Lei Jun, indicating a positive outlook for the company [1][3]. Group 1: Stock Buybacks and Shareholding - Lei Jun, the founder and CEO of Xiaomi Group, personally invested over 100 million HKD to acquire 2.6 million shares, increasing his shareholding to 23.26% [1]. - Xiaomi Group executed substantial stock buybacks on November 20 and 21, repurchasing 21.5 million shares for over 800 million HKD, bringing the total buyback amount for the year to over 2.3 billion HKD, positioning it among the top in the Hong Kong tech sector [3]. Group 2: Financial Performance - In Q3, Xiaomi Group reported a total revenue of 113.1 billion CNY, reflecting a year-on-year growth of 22.3%, while adjusted net profit reached 11.3 billion CNY, marking an 80.9% increase [3]. - The company's core business in smartphones and AIoT continues to grow steadily, with innovative sectors like smart electric vehicles and AI accelerating towards profitability, achieving a milestone of 500,000 electric vehicles produced, the fastest record for a global new energy vehicle company [3].

Core Viewpoint - Xiaomi Group's founder and CEO Lei Jun has invested over HKD 100 million to increase his stake in the company, signaling confidence in its future despite recent market challenges [2][4]. Group 1: Stock Buyback and Shareholding - Lei Jun has purchased 2.6 million shares, raising his ownership to 23.26% [2]. - Xiaomi has conducted significant stock buybacks, repurchasing 21.5 million shares on November 20 and 21, totaling over HKD 800 million [2]. - The total buyback amount for the year has exceeded HKD 2.3 billion, positioning Xiaomi among the top tech stocks in Hong Kong for buyback activity [3]. Group 2: Market Performance and Valuation - Xiaomi's market capitalization has declined significantly, losing over HKD 530 billion from September 25 to November 19, which surpasses the combined market cap loss of competitors NIO, Li Auto, Xpeng, and Leap Motor (approximately HKD 500 billion) [3]. - The company's stock performance reflects broader market challenges faced by tech stocks in Hong Kong [3]. Group 3: Financial Performance and Growth - In Q3, Xiaomi reported total revenue of CNY 113.1 billion, a year-on-year increase of 22.3%, and adjusted net profit of CNY 11.3 billion, up 80.9% [4]. - The core business of smartphones and AIoT is showing steady growth, while innovative sectors like electric vehicles and AI are accelerating towards profitability [4]. - Xiaomi's automotive division achieved a milestone with the production of its 500,000th electric vehicle, marking the fastest record for a global new energy vehicle company [4].

Core Viewpoint - Xiaomi Group's founder Lei Jun has increased his stake in the company by purchasing 2.6 million Class B shares at an average price of approximately HKD 38.58 per share, totaling over HKD 100 million, reflecting his confidence in the company's growth potential and long-term commitment [1]. Financial Performance - For Q3 2025, Xiaomi reported revenue of RMB 113.1 billion, a year-on-year increase of 22.3%, and an adjusted net profit of RMB 11.3 billion, up 80.9%, marking the highest quarterly profit in the company's history [5]. - The innovative business segment, including smart electric vehicles and AI, generated revenue of RMB 29 billion, with smart electric vehicle sales contributing RMB 28.3 billion, showing a growth of over 199% year-on-year [5][8]. - Xiaomi delivered a record 108,796 new vehicles in Q3, with the innovative business segment achieving a gross margin of 25.5% [7][8]. Stock Performance - As of the latest market close, Xiaomi's stock rose by 1.52% to HKD 38.66, but has seen a cumulative decline of over 35% since reaching a year-to-date high of HKD 61.45 on June 27 [3]. Share Buyback - In November, Xiaomi repurchased 21.5 million shares over two days, with total expenditures exceeding HKD 800 million, indicating a strategy to support its stock price amid market fluctuations [3]. Market Challenges - The company anticipates challenges in 2026 for its electric vehicle segment due to reduced purchase tax subsidies and increased competition in the automotive industry, which may lead to a decline in gross margins compared to 2025 [8].

Core Viewpoint - The Hong Kong stock market experienced significant net inflows from northbound trading, totaling HKD 85.71 billion, with notable net purchases in major stocks like Alibaba, Tencent, and Kuaishou [1] Group 1: Northbound Trading Activity - Northbound trading saw a net purchase of HKD 85.71 billion, with HKD 20.78 billion from the Shanghai Stock Connect and HKD 64.94 billion from the Shenzhen Stock Connect [1] - The most purchased stocks included Alibaba-W (09988), Tencent (00700), and Kuaishou-W (01024) [1] - The most sold stocks were SMIC (00981), CNOOC (00883), and Hua Hong Semiconductor (01347) [1] Group 2: Individual Stock Performance - Alibaba-W (09988) had a net inflow of HKD 52.84 billion, with a total trading volume of HKD 96.85 billion, reflecting a net increase of HKD 8.82 billion [2] - Tencent (00700) recorded a net inflow of HKD 11.67 billion, supported by positive outlooks from analysts regarding its core business growth [5] - Kuaishou-W (01024) saw a net inflow of HKD 8.18 billion, driven by rapid growth in its AI commercialization [5] - SMIC (00981) faced a net outflow of HKD 10.23 billion, amid concerns over U.S. export regulations affecting chip manufacturers [6] - CNOOC (00883) experienced a net outflow of HKD 3.79 billion [6] Group 3: Sector Insights - The banking sector, represented by China Construction Bank (00939), received a net inflow of HKD 29.18 million, indicating defensive value amid market volatility [6] - Analysts suggest that low valuations in the banking sector present significant value opportunities, especially as long-term capital allocation approaches year-end [6]

Core Viewpoint - BYD and Midea have signed a strategic cooperation agreement to integrate their strengths in smart vehicles, smart homes, and AIoT, aiming to create a new "human-vehicle-home" smart ecosystem [1][5]. Group 1: Strategic Cooperation - The cooperation will focus on collaborative innovation in AI agents, standardization of technology interfaces and data protocols, and exploring data interconnectivity between smart vehicles and home environments [5]. - Both companies will work together to establish standards for "human-vehicle-home" interconnectivity, with the goal of upgrading these standards to industry benchmarks [5]. Group 2: Product Integration - All BYD vehicle models will collaborate with Midea's brands, including Midea, COLMO, Little Swan, Hualing, and Toshiba, to integrate smart home devices and IoT products, creating a seamless interconnection [7]. - Users will be able to control home smart devices from their vehicles and vice versa, enhancing convenience and user experience [7]. Group 3: Sales and Experience - The partnership will also focus on creating a "human-vehicle-home" smart living experience space in offline stores, allowing customers to experience both smart home and smart vehicle products in a single visit [7]. - This initiative aims to establish a complete sales loop from experience to purchase, enhancing the overall consumer experience [7].

Report Summary 1. Report Industry Investment Rating - Not provided in the report. 2. Core Views - The Chinese government is considering a stimulus package to revive the property market, which led to some recovery in Chinese property bonds [2]. - SJM's acquisition of the L'Arc Hotel and termination of the Ponte 16 acquisition could delay its de - leverage trajectory and may lead to negative rating action [7][8]. - Xiaomi's solid credit profiles and strong performance in the Smart EV segment support a buy recommendation on its 30 - 31s bonds [13]. 3. Summary by Relevant Sections Trading Desk Comments - Yesterday, new BBLTB 35s widened 1bp, new BBLTB 30s tightened 1bp, new SMBCAC 35s tightened 2 - 3bps, and there were better selling flows on existing SMBCAC 28s/34s [2]. - Asia IG space had some recoveries (1 - 2bps tighter) in TW lifers and KR/TH/SG T2s, but better selling on JP corps and some bank papers [2]. - JP AT1s and insurance subs struggled, while SOFTBK 31 - 65s were up 0.9 - 1.4pts, Yankee AT1s bounced back 0.3 - 0.5pt, and NWDEVL complex rose 0.2 - 1.0pt [2]. - In Chinese properties, VNKRLE 27 - 29 recovered 0.5 - 0.8pt, LNGFOR 27 - 32 increased 0.2 - 0.3pt, and in SEA, VLLPM 27 - 29 dropped 0.8 - 2.4pts [2]. - In AU, INFRAB 14.5 28 lost 0.5pt, and in LGFV space, HFs bought higher - yielding issues and RMs sourced AAA - guaranteed papers [2]. Analyst Comments - SJMHOL: SJM is acquiring the L'Arc Hotel for HKD1.75bn and terminating the Ponte 16 acquisition. The pro - forma net debt/LTM EBITDA may increase to 7.3x from 6.8x as of Sep'25 [7][8]. - XIAOMI: In 3Q25, Xiaomi's revenue increased 22% yoy to RMB113.1bn, mainly driven by the Smart EV segment. Smartphones revenue declined 3.1% yoy, while Smart EV segment revenue rose 199% yoy and achieved a quarterly operating profit of RMB0.7bn [13][14][15]. Macro News Recap - On Thursday, S&P was down 1.56%, Dow was down 0.84%, and Nasdaq was down 2.15%. US initial jobless claims were +220k, lower than expected, and Sep'25 non - farm payroll was +119k, higher than expected [6]. - The US Sep'25 unemployment rate was 4.4%, higher than expected, and UST yields were lower on Thursday [6]. Offshore Asia New Issues - Priced: Agricultural Bank of China Limited, Singapore Branch issued USD300mn 3 - year bonds at SOFR + 43 with an issue rating of A1/-/- [21]. - Pipeline: First Abu Dhabi Bank is planning a PerpNC6 issuance with a coupon of 6.375 - 6.5% and an issue rating of Baa3/-/- [22]. Onshore Primary Issuances - Yesterday, 153 credit bonds were issued with an amount of RMB137bn. Month - to - date, 1,456 credit bonds were issued with a total amount of RMB1,561bn, a 34.3% yoy increase [25]. - There were also various corporate news such as China Great Wall's asset - backed special plan, IDASAL's possible investment, and others [25].

Core Viewpoint - Beijing Defeng New Journey Technology Co., Ltd. (Defeng Technology) has submitted its IPO application to the Hong Kong Stock Exchange, aiming to enter the capital market amid fierce competition in the AIoT sector. The company faces challenges such as low market share, significant cumulative losses, and high reliance on state-owned enterprises for revenue [2][10][15]. Company Overview - Defeng Technology was founded in 2015 by Wang Qingjie, who has a background in technology from IBM and other major firms. The company specializes in AIoT production optimization software solutions and has generated over 500 million RMB in revenue for 2024 [2][3][10]. - The company has developed the Delt@AIoT platform, which includes application suites and technical platform suites, and has been recognized as a national key software enterprise for three consecutive years [4][6]. Financial Performance - Defeng Technology has reported cumulative losses exceeding 730 million RMB over the past three and a half years, with annual losses of 165 million RMB, 297 million RMB, 228 million RMB, and 39.9 million RMB for 2022, 2023, 2024, and the first half of 2025, respectively [11][12]. - Revenue has shown growth, with figures of approximately 313 million RMB, 442 million RMB, 525 million RMB, and 159 million RMB for the respective years [13]. The revenue breakdown indicates that AIoT solutions account for the largest share, with a significant increase from 80.3% in 2022 to 93.9% in the first half of 2025 [14]. Market Position - Defeng Technology holds a market share of 1.8% in the independent professional AIoT platform sector in China, ranking fifth, with the leading company holding a market share of 10.2% [16][18]. In the energy sector, it ranks third with a market share of 9.9% [21]. Customer Base and Revenue Concentration - The company heavily relies on state-owned enterprises, which contributed approximately 60.6% to 78% of its revenue during the reporting period. The top five customers accounted for about 51.6% to 68.9% of total revenue [15][16]. - The high customer concentration poses risks, as changes in government budgets or the loss of a major client could significantly impact performance [16]. Funding and Financial Obligations - Defeng Technology has raised a total of 656 million RMB through multiple funding rounds, with a post-investment valuation of 2.35 billion RMB during the C round [6][10]. However, the company faces increasing redemption liabilities, projected to rise from 936 million RMB in 2022 to 1.46 billion RMB by mid-2025 [9][10]. - The company has signed an agreement to extend its IPO target date to December 31, 2026, and has terminated the redemption rights prior to submitting the IPO application [10]. Compliance and Operational Challenges - Defeng Technology has faced compliance issues, including a fine for software copyright violations, highlighting the need for improved internal management and compliance practices [25][26]. The company has also experienced extended accounts receivable turnover days, indicating cash flow challenges [22][23]. Strategic Recommendations - To mitigate risks, Defeng Technology should diversify its customer base beyond state-owned enterprises and enhance its internal controls to avoid compliance issues. The upcoming IPO represents a critical opportunity to alleviate redemption liability risks and secure necessary funding for future growth [27].

Group 1: Market Overview - On November 21, the Hong Kong stock market saw a net inflow of 105 million HKD from northbound trading, with a net buy of 498 million HKD from the Shanghai Stock Connect and a net sell of 393 million HKD from the Shenzhen Stock Connect [2] - The most bought stocks included Tencent (00700), Xiaomi Group-W (01810), and Alibaba-W (09988), while the most sold stocks were the Tracker Fund of Hong Kong (02800), Hua Hong Semiconductor (01347), and Ganfeng Lithium (01772) [2] Group 2: Stock Performance - Alibaba-W had a net inflow of 8.47 billion HKD, with a buy amount of 41.80 billion HKD and a sell amount of 33.33 billion HKD [3] - Xiaomi Group-W recorded a net inflow of 9.48 billion HKD, with a buy amount of 29.79 billion HKD and a sell amount of 20.31 billion HKD [3] - Tencent Holdings had a net inflow of 9.61 billion HKD, with a buy amount of 22.87 billion HKD and a sell amount of 13.25 billion HKD [3] Group 3: Sector Insights - Northbound funds are actively buying technology stocks, with Tencent, Alibaba, Kuaishou-W, and Meituan-W receiving significant net buys [6] - Xiaomi Group-W's strong third-quarter performance, with a revenue increase of 22.3% to 113.1 billion HKD and a net profit growth of 80.9% to 11.3 billion HKD, is driven by its high-end smartphone strategy and automotive business [6] - Semiconductor stocks like SMIC (00981) and Hua Hong Semiconductor (01347) faced net sells of 1.89 billion HKD and 3.37 billion HKD respectively, amid reports of potential delays in U.S. semiconductor import tariffs [7] Group 4: Commodity Market Impact - Ganfeng Lithium (01772) experienced a net sell of 1.9 billion HKD, influenced by recent adjustments in lithium carbonate futures trading fees and limits, leading to a drop in futures prices [7] - The overall sentiment in the lithium market is shifting as recent price movements are increasingly driven by market speculation rather than fundamental supply-demand dynamics [7] Group 5: ETF Performance - The Southern Hang Seng Technology ETF (03033) saw a net buy of 72.34 million HKD, while the Tracker Fund of Hong Kong (02800) faced a significant net sell of 5.142 billion HKD [8] - The divergence in ETF performance reflects broader market uncertainties, particularly regarding U.S. interest rate policies and inflation concerns [8]