Group 1 - The company achieved record high revenue and profit in Q1 2025, with total revenue of 111.3 billion yuan (YoY +47%) and adjusted net profit of 10.7 billion yuan (YoY +65%), marking a historical high for a single quarter [1] - The gross margin improved to 22.8% (YoY +0.5 percentage points), indicating effective cost management and operational efficiency [1] - The revenue contributions from various business segments in Q1 2025 were 46% from smartphones, 29% from IoT and consumer products, 8% from internet services, and 17% from smart electric vehicles and AI [1] Group 2 - The IoT business generated revenue of 32.3 billion yuan (YoY +59%) with a gross margin of 25.2% (YoY +5.4 percentage points), achieving a historical high in revenue and gross profit [2] - Smart home appliances saw a significant revenue increase of 114%, with air conditioners, refrigerators, and washing machines experiencing shipment growth of 65%, 65%, and 100% respectively [2] - The internet services segment reported revenue of 9.1 billion yuan (YoY +13%) with a gross margin of 76.9% (YoY +2.7 percentage points) [2] Group 3 - The smart electric vehicle and AI business reported revenue of 18.6 billion yuan, with a gross margin of 23.2%, and the loss in this segment narrowed to 500 million yuan [2] - The company delivered 76,000 units of the Xiaomi SU7 series in Q1 2025, with cumulative deliveries exceeding 258,000 units [2] - The company opened 235 automotive sales stores by March 31, 2025, enhancing its sales and service network [2] Group 4 - The company launched its first self-developed SoC, the Xuanjie O1, and introduced the Xiaomi 15S Pro and Xiaomi Pad 7 Ultra, along with a new 4G watch chip [3] - R&D expenses reached 6.7 billion yuan in Q1 2025, reflecting a 30% year-on-year increase, indicating a strong commitment to core technology development [3] - The company raised its profit forecast for 2025-2027, expecting net profits of 36.2 billion, 46.4 billion, and 66 billion yuan respectively, with growth rates of 53%, 28%, and 42% [3]

Investment Rating - The investment rating for Xiaomi Group-W (01810.HK) is "Outperform the Market" [6][29]. Core Views - In Q1 2025, the company achieved record high revenue and profit, with total revenue reaching 111.3 billion yuan (YoY +47%) and adjusted net profit of 10.7 billion yuan (YoY +65%), marking a historical high for a single quarter [1]. - The company continues to see strong growth across its business segments, with smartphone, IoT and lifestyle products, internet services, and smart electric vehicles contributing 46%, 29%, 8%, and 17% to revenue, respectively [1]. - The smart electric vehicle and AI innovation business saw revenue of 18.6 billion yuan, with a narrowing loss of 500 million yuan [3]. - The company is focused on cost reduction and efficiency improvement, achieving an operating expense ratio of 13.9% (YoY -2.2pct) [1]. Summary by Sections Revenue and Profit Performance - Q1 2025 total revenue was 111.3 billion yuan, with a gross margin of 22.8% (YoY +0.5pct) [1]. - The smartphone business generated 50.6 billion yuan (YoY +8.9%) with a gross margin of 12.4% [2]. - IoT business revenue reached 32.3 billion yuan (YoY +59%) with a gross margin of 25.2% [2]. - Internet services revenue was 9.1 billion yuan (YoY +13%) with a gross margin of 76.9% [2]. Smart Electric Vehicle and AI Business - Revenue from smart electric vehicles was 18.1 billion yuan, with an average selling price (ASP) of 238,000 yuan [3]. - The company delivered 76,000 units of the Xiaomi SU7 series in Q1 2025, with cumulative deliveries exceeding 258,000 units [3]. - The company is expanding its sales service network, with 235 automotive sales stores opened by March 31 [3]. Financial Forecasts - The profit forecast for 2025-2027 has been raised, with expected net profits of 36.2 billion yuan, 46.4 billion yuan, and 66 billion yuan, representing YoY growth rates of 53%, 28%, and 42% respectively [4]. - Revenue projections for 2025-2027 are 484.2 billion yuan, 611 billion yuan, and 721.9 billion yuan, with growth rates of 32.3%, 26.2%, and 18.2% [5].

Core Viewpoint - Xiaomi has made a significant comeback in the Chinese smartphone market, reclaiming the top position after ten years, driven by strategic product and channel synergies, as well as an expanding ecosystem in various sectors [2][5][10]. Group 1: Market Performance - In Q1 2025, China's smartphone market saw an increase in shipments to 70.9 million units, a 5% year-on-year growth [4]. - Xiaomi led the market with 13.3 million units shipped, achieving a market share of 19% [5]. - Xiaomi's smartphone activation volume in March 2025 reached 3.2437 million units, marking a 17% increase year-on-year [29]. Group 2: Strategic Initiatives - Xiaomi's product line has become more comprehensive, covering high-end to mid-range devices, with the Redmi Turbo series filling the mid-range flagship gap [11]. - The company is expanding into new sectors such as automotive and smart home technology, aiming to create a seamless interconnected ecosystem [14]. - Xiaomi has shifted from an online-only sales model to a hybrid online-offline approach, enhancing its competitiveness against traditional brands like OPPO and Vivo [14]. Group 3: Challenges and Responses - Xiaomi faced significant challenges, including a public relations crisis following a tragic incident involving the Xiaomi SU7, which led to a drop in stock price and market value [17][20]. - Despite these setbacks, Xiaomi continued to push forward with its product launches, including the Redmi Turbo 4 Pro, which has gained market attention [28]. - The company is also advancing its automotive plans, with the upcoming launch of the YU7 model and the development of a high-end SUV, the YU9, targeting the premium market [33][37]. Group 4: Future Outlook - Xiaomi's dual strategy of focusing on mid-range volume while building a high-end brand is expected to position the company favorably in a competitive landscape [41]. - The company has made substantial investments in its automotive division, with initial investments exceeding 10 billion yuan, indicating a long-term commitment to this sector [44]. - The future remains uncertain, with challenges in both the smartphone and automotive markets, but Xiaomi's resilience and strategic positioning provide a foundation for potential success [49].