Core Insights - The company reported a 3Q25 adjusted net profit of 11.31 billion yuan, exceeding expectations by 7.1%, driven by better-than-expected gross margins in IoT, internet services, and automotive sectors [1][2] Revenue and Profitability - 3Q25 revenue reached 113.12 billion yuan, a year-on-year increase of 22.3%, slightly above the forecast by 0.7% [1] - The adjusted net profit for 3Q25 was 11.31 billion yuan, reflecting a year-on-year growth of 80.9% [1] - IoT revenue grew by 5.6% to 27.6 billion yuan, with notable growth in wearable and lifestyle products [2] - Internet business revenue increased by 11% to 9.4 billion yuan, with a gross margin of 76.9% [2] Smartphone and Market Performance - Global smartphone shipments in 3Q25 totaled 43.25 million units, a year-on-year increase of 0.5% [1] - The company's global smartphone market share rose to 13.6%, with increases in various regions including Latin America and Southeast Asia [1] - The average selling price (ASP) for smartphones decreased by 3.6% to 1,063 yuan, primarily due to lower ASPs overseas, although ASP in mainland China increased due to a shift towards high-end models [1] Automotive Sector - The company delivered 109,000 vehicles in 3Q25, achieving an ASP of 260,000 yuan, driven by increased deliveries of the SU7 Ultra and YU7 models [2] - The automotive and innovation business segment achieved a gross margin of 25.5% and recorded a quarterly operating profit of 700 million yuan for the first time [2] - The outlook for 2026 is positive, with expectations for continued growth in vehicle deliveries and profit acceleration [2] Adjustments and Valuation - The company adjusted its net profit forecasts for 2025 and 2026 down by 7.5% and 9.8% to 40.49 billion yuan and 57.77 billion yuan, respectively [2] - The current stock price corresponds to a P/E ratio of 24x for 2025 and 17x for 2026, with a target price adjustment down by 10.9% to 53 yuan, indicating a potential upside of 30% [2]

Core Viewpoint - The company is expected to see significant growth in adjusted net profit and revenue in Q3 2025, driven by strong performance in its smartphone and automotive segments, despite some challenges in the Chinese market [1][2]. Group 1: Financial Performance - Q3 2025 revenue is projected to increase by 21.46% year-on-year to 112.36 billion yuan, with adjusted net profit expected to rise by 68.88% to 10.56 billion yuan, largely due to profitability in automotive and innovative businesses [1]. - Smartphone revenue is anticipated to decline by 3.49% year-on-year to 45.80 billion yuan, with a slight decrease in average selling price (ASP) to 1,065 yuan [1]. - IoT revenue is expected to grow by 5% year-on-year to 27.41 billion yuan, with an improved gross margin of 23.5% [2]. - Internet services revenue is projected to increase by 9% year-on-year to 9.23 billion yuan, maintaining a healthy gross margin of 75% [2]. - Automotive deliveries are forecasted to reach 109,000 units, generating revenue of 29.43 billion yuan, with the automotive business likely achieving its first quarterly profit of 707 million yuan [2]. Group 2: Market Dynamics - The global smartphone shipment is expected to maintain a top-three position, with a 1.8% year-on-year increase to 43.50 million units, although the Chinese market is projected to see a slight decline of 1.7% [1]. - The company is focusing on high-end models like the Xiaomi 17 series, which has shown strong initial sales performance [1]. - The automotive segment is anticipated to benefit from increased deliveries and the release of new models, contributing to sustained growth in both delivery volume and profitability [2]. Group 3: Profit Forecast and Valuation - Adjusted net profit forecasts for 2025 and 2026 have been revised down by 5.2% and 3.6% to 43.76 billion yuan and 64.02 billion yuan, respectively, due to rising storage costs [2]. - The current stock price corresponds to a price-to-earnings ratio of 25.0x for 2025 and 16.9x for 2026 based on adjusted net profit [2]. - The target price has been lowered by 15% to 59.5 HKD, reflecting a potential upside of 29.6% based on the sum-of-the-parts valuation method [2].

Core Viewpoint - CICC has lowered Xiaomi Group's adjusted net profit forecasts for 2025 and 2026 by 5.2% and 3.6% to CNY 43.757 billion and CNY 64.016 billion respectively, due to cost pressures from rising storage prices [1] Group 1: Financial Projections - CICC predicts a 68.88% year-on-year increase in adjusted net profit for Q3 2025, reaching CNY 10.557 billion, with revenue expected to grow by 21.46% to CNY 112.357 billion [2] - The target price for Xiaomi has been reduced by 15% to HKD 59.5, reflecting a valuation of 35.3 times and 24.1 times adjusted net profit for 2025 and 2026 respectively, indicating a potential upside of 29.6% [1] Group 2: Smartphone Performance - Xiaomi's global smartphone shipments are expected to increase by 1.8% year-on-year to 43.5 million units in Q3 2025, with a slight decline in the Chinese market by 1.7% to 10 million units [2] - The average selling price (ASP) is anticipated to slightly decrease to CNY 1,065 due to an increase in overseas market share, while smartphone revenue is projected to decline by 3.49% to CNY 45.795 billion [2] Group 3: IoT and Internet Services - IoT revenue is expected to grow by 5% year-on-year to CNY 27.407 billion in Q3 2025, with an improvement in gross margin to 23.5% [3] - Internet services revenue is projected to increase by 9.0% year-on-year to CNY 9.225 billion, maintaining a healthy gross margin of 75.0% [3] Group 4: Automotive Business - The automotive business is expected to deliver 109,000 units in Q3 2025, generating revenue of CNY 29.430 billion, with the first quarterly profit anticipated at CNY 0.707 billion [3] - The company is optimistic about the long-term value of its "car-home" ecosystem, expecting continued growth in automotive deliveries and profit acceleration [3]