Group 1 - Xiaomi's new retail strategy is set to expand internationally, with Southeast Asia being the first target, aiming to establish over 100 stores by 2025, primarily in Thailand and Malaysia [2][3] - As of Q2 this year, Xiaomi holds a 19% market share in Southeast Asia for smartphones, ranking first, with an 8% year-on-year increase in shipment volume [2] - The expansion of Xiaomi stores is not just about increasing sales points but also about providing local consumers with the opportunity to experience high-end products and the "human-vehicle-home ecosystem" [2][3] Group 2 - The new retail strategy is one of Xiaomi's six core strategies, aimed at simplifying sales channels and improving commercial efficiency through data integration [3] - Xiaomi's new retail model has been in development since 2015, with the first store opening in Beijing, and has evolved to a fully operational model by 2020 [3] - The company plans to open 10,000 Xiaomi stores globally over the next five years, with a goal of forming a closed-loop retail model by the end of 2025 [5] Group 3 - The overseas new retail strategy respects local conditions, with a mix of direct stores and partnerships with local agents to minimize resistance [4] - Despite different operational models, all Xiaomi stores maintain consistent brand image, location, decoration, product categories, and pricing to protect consumer interests [4]

Core Viewpoint - Xiaomi's President Lu Weibing announced the upcoming launch of the Xiaomi Surge OS 3 Beta version, emphasizing the goal of creating a smooth user experience [1][7]. Group 1: Product Development and User Feedback - Xiaomi has formed a strong team comprising product, research, testing, quality, and marketing experts to analyze over 80,000 user feedback entries, focusing on high-frequency scenarios and technical challenges [4][10]. - A dedicated "Experience Special Team" of over 3,000 engineers has been established to refine the OS based on user feedback [4][10]. - The company aims to deliver a user-centric experience, ensuring that the OS is not only fast and responsive but also intuitive and seamless for users [9][10]. Group 2: Beta Version Launch and User Engagement - The Beta version of Xiaomi Surge OS 3 will be available for registration on the Xiaomi community, with the launch scheduled for today [6][10]. - Lu Weibing participated in internal testing and reported significant improvements, encouraging users to provide feedback during the Beta phase to facilitate rapid iterations [6][10]. - The company aims to address any issues in the Beta version promptly, with the ultimate goal of ensuring that every Xiaomi user experiences satisfaction [10].

Core Viewpoint - Xiaomi's Q2 2025 financial report shows impressive growth with revenue of 116 billion yuan, a 31% year-on-year increase, and adjusted profit of 10.8 billion yuan, up 75% year-on-year, reaching historical highs. However, market response has been lukewarm, with stock prices hovering around 52 HKD despite buy ratings from major institutions like Goldman Sachs and HSBC, which have lowered target prices due to some data falling short of expectations [3][4][5]. Financial Performance - Xiaomi's smartphone revenue for Q2 was 45.5 billion yuan, accounting for nearly 40% of total revenue, but this represents a decline from 46.5 billion yuan in the same period last year. The gross margin for smartphones also decreased from 12.1% to 11.5% [5][6]. - Despite selling more smartphones, revenue decreased due to pricing issues rather than a shift towards high-end models. The proportion of high-end smartphone sales in China increased by 5.5% year-on-year [6][7]. Market Position and Strategy - Xiaomi's global market strategy is crucial as domestic growth is stagnant. The company has maintained a top-three position in global smartphone market share, but competition is intensifying, particularly in Southeast Asia where Xiaomi holds a 19% market share [7][8]. - The company is focusing on high-end models while also managing to maintain a competitive edge in the mid-to-low-end market, which is essential for growth in emerging markets [9][10]. Ecosystem Development - Xiaomi's IoT business saw significant growth, with revenue reaching 38.7 billion yuan, a 44.7% increase year-on-year, driven mainly by major appliances [10][11]. - The automotive business is also showing improvement, with losses narrowing to 300 million yuan in Q2, and gross margin increasing from 23.2% to 26.4% [10][12]. Competitive Landscape - Xiaomi's strategy involves leveraging its ecosystem across various sectors, including home appliances and automotive, to create synergies that enhance market share and brand influence [11][14]. - The company faces challenges from traditional giants in the home appliance sector, which are adapting to Xiaomi's strategies, indicating a potential for increased competition in the future [16][17]. Leadership and Vision - The role of Xiaomi's founder, Lei Jun, remains pivotal in driving innovation and maintaining competitive advantages across product lines. His leadership is seen as crucial for navigating the company's strategic direction [17][18].

Core Insights - The new energy vehicle industry continues to thrive in 2025, with Suhao Tianhong Group, a leading state-owned enterprise in Jiangsu, intensifying its investment in the sector through collaboration with tech giant Xiaomi to enhance smart mobility in Nanjing [1] Group 1: Company Collaboration - The opening of the Xiaomi Auto sales service center on Dongqi Road marks a significant step in the partnership between Suhao Tianhong Group and Xiaomi, integrating technology, ecology, and service [1][3] - Xiaomi Auto has rapidly gained market traction since the launch of its first model in 2024, with sales doubling year-on-year in the first half of this year and expanding its service network to over 300 locations nationwide [1] Group 2: Service Center Features - The Dongqi Road store spans 5,140 square meters, making it one of the leading comprehensive service centers for Xiaomi Auto in Nanjing, featuring a design that merges technology with user-friendliness [2] - The showroom area is 938 square meters, showcasing popular models like the Xiaomi SU7 and YU7, and includes a customization wall for a one-stop vehicle selection experience [2] - The service center is equipped with 12 high-standard service bays and offers a full range of services, including bodywork, battery diagnostics, and software upgrades, while maintaining Xiaomi's commitment to 24-hour online support and 40-minute rescue response [2] Group 3: Market Impact - The opening of the Dongqi Road store signifies a new beginning for Suhao Tianhong and Xiaomi in the Nanjing market, representing an innovative ecosystem that combines products, services, and lifestyle [3] - The collaboration aims to promote regional green mobility transformation in line with the "dual carbon" goals, showcasing a new development paradigm for the new energy vehicle era [3]

Core Insights - Xiaomi has opened its largest store in Yunnan, the Xiaomi Home Kunming Park 1903 Automotive Flagship Store, which features a castle-style architecture and is referred to as the "most beautiful Xiaomi Home" by fans [1][3] Group 1: Store Features and Offerings - The Kunming Park 1903 store spans 1,600 square meters and includes a variety of products such as smartphones, AIoT devices, and home appliances, with five Xiaomi cars, including the YU7, prominently displayed [3] - The second floor is dedicated to smart home appliances and a customer service center, along with a coffee and tea area for customers [3] - The store aims to serve not only as a sales space but also as a social hub for users to explore and share experiences, embodying the concept of a technology living room [3] Group 2: Expansion Plans and Strategic Goals - By the end of this year, Xiaomi plans to exceed 20,000 Xiaomi Home stores, marking a significant milestone in the brand's image upgrade process [3] - The company aims to upgrade 3,000 stores to enhance their locations, sizes, and product variety, with over 200 stores integrating the "people, vehicles, and home" ecosystem for a comprehensive product experience [3] - Additionally, Xiaomi has established over 2,000 integrated sales and service stores nationwide to improve customer service and experience [3]

Investment Rating - The report maintains a "Buy" rating for Xiaomi Group [4][7]. Core Insights - The innovative business segment is rapidly developing, with revenue from smart electric vehicles and AI reaching 21.3 billion yuan in Q2 2025, despite an operating loss of 300 million yuan. The Xiaomi YU7 series launched with over 240,000 units locked in within 18 hours, indicating strong demand [2]. - The overseas penetration of the smartphone business is increasing, with Q2 2025 smartphone revenue at 45.5 billion yuan and a gross margin of 11.5%. Global shipments reached 42.4 million units, a year-on-year increase of 0.6%, with a market share of 14.7% [2]. - IoT and lifestyle product revenue reached a record high of 38.7 billion yuan in Q2 2025, growing 44.7% year-on-year, driven by demand for smart appliances and wearable products in mainland China [3]. Financial Projections - The report forecasts adjusted EPS for 2025-2027 to be 1.80, 2.32, and 2.99 yuan, corresponding to P/E ratios of 26.82, 20.88, and 16.19 respectively [4][6]. - Revenue projections for 2025-2027 are 483.38 billion yuan, 595.47 billion yuan, and 726.58 billion yuan, with year-on-year growth rates of 32.11%, 23.19%, and 22.02% [6][13]. - The net profit attributable to the parent company is expected to grow from 40.72 billion yuan in 2025 to 67.37 billion yuan in 2027, with growth rates of 72.11% and 28.87% respectively [6][12]. Market Position - Xiaomi ranks among the top three global smartphone vendors, with significant market share increases in Southeast Asia, Europe, and Africa [2]. - The company is expected to leverage its high-end strategy and overseas expansion to drive steady growth in its smartphone business despite short-term margin pressures [2]. Strategic Outlook - The report expresses optimism regarding Xiaomi's high-end product strategy, the continuous development of AI technology and ecosystem, and the ongoing growth of its automotive business [4].

Core Insights - Xiaomi has achieved a remarkable Q2 2025 financial performance with total revenue of 116 billion yuan and a year-on-year growth of 30.5%, marking a historical high amidst a challenging industry environment [1][2][17] - The company's growth is attributed to its "human-vehicle-home ecosystem" strategy, which is not only supporting current financial performance but also establishing growth certainty for the next 3 to 5 years [1][11][17] Financial Performance - Xiaomi's Q2 2025 revenue of 116 billion yuan includes contributions from multiple business lines, with smart electric vehicles and innovative businesses contributing 21.3 billion yuan [2] - The automotive segment generated 20.6 billion yuan in revenue with a record delivery of 81,302 vehicles in a single quarter, indicating a strong position in the domestic new energy vehicle market [2][4] Automotive Business - Despite the YU7 model not yet being delivered, Xiaomi's automotive division delivered a total of 157,000 vehicles in the first half of the year, achieving an average tax-inclusive price of 280,000 yuan [4] - Xiaomi's strategy emphasizes product strength over price competition, with plans to enter the European electric vehicle market by 2027 [4][11] Smartphone and AIoT Performance - In Q2 2025, Xiaomi's global smartphone shipments reached 43 million units, maintaining a market share of 14.7% and ranking among the top three globally for 20 consecutive quarters [5] - The high-end smartphone strategy is showing results, with a 27.6% market share in the high-end segment in China, and significant growth in the 4,000-6,000 yuan price range [5] - The AIoT segment, particularly large home appliances, saw a 66.2% year-on-year revenue growth, with air conditioning units achieving both volume and price growth [5] Ecosystem Strategy - Xiaomi's "human-vehicle-home ecosystem" is a unified strategy that integrates smartphones, vehicles, and home appliances, creating a seamless user experience [9][11] - The company has established itself as a leader in this ecosystem, with other industry players beginning to adopt similar strategies, indicating a broader industry trend [11][12] Competitive Advantages - Xiaomi's competitive edge lies in its technological integration, scale, R&D investment, and strong brand loyalty, which collectively create a robust barrier to entry for competitors [15][16] - The company has invested 102 billion yuan in R&D over the past five years, with a current R&D expenditure of 7.8 billion yuan in Q2 2025, representing 6.7% of its revenue [16] Future Outlook - The automotive business is expected to continue its growth trajectory, potentially becoming a significant profit driver as new models are launched and supply chains are optimized [17] - Xiaomi aims to transition from hardware sales to a model focused on subscription services and data monetization, enhancing its profit margins [17]

Core Viewpoint - Xiaomi has demonstrated remarkable growth in the second quarter, achieving record highs in revenue and adjusted net profit despite a challenging smartphone market, indicating a significant transformation in the company's business model and strategy [1][2][4]. Financial Performance - In Q2, Xiaomi's total revenue reached 1160 billion, a year-on-year increase of 30.5%, while net profit was 119 billion, up 134.2%. Adjusted net profit was 108 billion, reflecting a 75.4% increase [5]. - Xiaomi has achieved three consecutive quarters of revenue exceeding 100 billion and five consecutive quarters of revenue growth over 30% [5][9]. Strategic Initiatives - The "Human-Vehicle-Home Ecosystem" strategy has enhanced Xiaomi's resilience and internal growth momentum, contributing to its strong financial performance [5][9]. - Xiaomi's smartphone business has solidified its position in the high-end market, with a 27.6% share of high-end smartphone sales in mainland China, an increase of 5.5 percentage points year-on-year [5][6]. Product Performance - The IoT and consumer products segment saw a 44.7% year-on-year revenue growth, driven by smart home appliances, with air conditioning sales exceeding 5.4 million units, a growth of over 60% [6][11]. - The automotive sector reported a staggering 230.3% year-on-year increase in revenue, reaching 206 billion, with a gross margin of 26.4%, surpassing leading brands like Tesla [6][9]. Future Outlook - Xiaomi aims to enter the "2 million club" within three to five years, positioning itself alongside Apple and Samsung [6]. - The company plans to invest 300 billion in R&D this year, with a total of 1020 billion invested over the past five years, focusing on core technologies [11][13]. - Xiaomi is preparing to expand its automotive business into overseas markets, with a target to enter Europe by 2027 [15]. Market Perception - Analysts view Xiaomi's explosive growth in the electric vehicle sector as a potential catalyst for stock price increases, with Morgan Stanley maintaining an "overweight" rating and a target price of 62 HKD, indicating significant upside potential [15].

Investment Rating - The report maintains an "Accumulate" rating for Xiaomi Group-W (1810.HK) as of August 21, 2025 [1][11]. Core Insights - The company continues to execute its core operational strategy of "steady progress," achieving record highs in both revenue and profit. In Q2 2025, the company reported revenue of approximately 116 billion yuan, a year-on-year increase of 30.5%, and an adjusted net profit of about 10.8 billion yuan, up 75.4% year-on-year [5][6]. - The smartphone segment experienced a slight revenue decline of 2.1% year-on-year, primarily due to a decrease in average selling price (ASP), although this was partially offset by an increase in shipment volume [6][7]. - Revenue from IoT and lifestyle products reached a historical high of approximately 38.7 billion yuan, growing 44.7% year-on-year, driven by increased sales in mainland China and global markets [7]. - The electric vehicle segment saw a significant revenue increase of over 200% year-on-year, with Q2 2025 revenue reaching approximately 20.6 billion yuan, supported by higher delivery volumes and ASP [8][9]. - Internet service revenue grew by 10% year-on-year, reaching 9.1 billion yuan, largely due to increased advertising revenue [9]. Summary by Sections Recent Performance - In Q2 2025, Xiaomi's revenue was approximately 116 billion yuan, with a year-on-year growth of 30.5% and a quarter-on-quarter growth of 4.2%. The adjusted net profit was about 10.8 billion yuan, reflecting a year-on-year increase of 75.4% and a quarter-on-quarter increase of 1.5% [5][6]. Smartphone Business - The smartphone revenue for Q2 2025 was approximately 45.5 billion yuan, down 2.1% year-on-year, primarily due to a decline in ASP, which was around 1,073.2 yuan. However, shipment volume increased to approximately 42.4 million units, mainly due to higher sales in mainland China [6][7]. IoT and Lifestyle Products - Revenue from IoT and lifestyle products reached approximately 38.7 billion yuan in Q2 2025, a 44.7% increase year-on-year. The smart home appliance segment also saw significant growth, with air conditioning units shipped exceeding 5.4 million, marking a year-on-year growth of over 60% [7]. Electric Vehicle Segment - The electric vehicle revenue in Q2 2025 was approximately 20.6 billion yuan, with a year-on-year growth of 230.3%. The number of vehicles delivered reached 81,302, supported by improved production capacity [8]. Internet Services - Internet service revenue reached 9.1 billion yuan in Q2 2025, a 10% increase year-on-year, driven by a 14.6% increase in advertising revenue, which amounted to approximately 6.8 billion yuan [9].

Core Viewpoint - The company reported better-than-expected adjusted net profit for Q2 2025, driven by strong IoT business performance and higher automotive gross margins [1][2]. Financial Performance - Q2 2025 revenue reached 115.956 billion yuan, a year-on-year increase of 30.5%, slightly below expectations by 1.7% [1]. - Adjusted net profit was 10.831 billion yuan, reflecting a year-on-year growth of 75.4%, exceeding expectations by 6.4% [1]. - IoT revenue grew by 44.7% year-on-year to 38.712 billion yuan, with significant contributions from major appliances, wearables, and tablets [2]. Market Trends - The company maintained its position as the third-largest smartphone vendor globally, with a market share of 14.7% in Q2 2025, despite a slight year-on-year shipment increase of 0.6% to 42.4 million units [1]. - In the high-end smartphone segment in mainland China, the market share for devices priced between 5,000-6,000 yuan increased by 6.5 percentage points to 15.4% [1]. - The average selling price (ASP) of smartphones decreased by 2.7% year-on-year to 1,073 yuan due to a higher proportion of low-ASP models [1]. IoT and Internet Business - The IoT segment's gross margin decreased by 2.7 percentage points to 22.5% in Q2 2025, influenced by promotional activities [2]. - Internet business revenue grew by 10.1% year-on-year to 9.097 billion yuan, with a gross margin decline of 3.0 percentage points to 75.4% [2]. Automotive Sector - The company delivered 81,300 vehicles in Q2 2025, with an ASP of 253,700 yuan, and the gross margin improved by 3.27 percentage points to 26.4% [2]. - The outlook for automotive orders is positive, indicating potential profit elasticity from increased deliveries [2]. Profit Forecast and Valuation - The adjusted net profit forecast for 2025 was lowered by 5.9% to 46.139 billion yuan due to weak smartphone demand and rising raw material costs [2]. - The current stock price corresponds to a price-to-earnings ratio of 27.0 times for 2025 and 18.5 times for 2026, with a target price of 70.0 HKD, indicating a potential upside of 33.6% [2].