Core Viewpoint - Xiaomi achieved its first profit in the automotive business in Q3 2025, while the smartphone business faced pressure from rising storage prices [1][2] Group 1: Financial Performance - Xiaomi's Q3 2025 revenue and adjusted net profit were 113.1 billion and 11.3 billion yuan respectively, with revenue meeting market expectations and adjusted net profit exceeding them [1] - Automotive and AI revenue reached 29 billion yuan, a year-on-year increase of 199%, with an average selling price (ASP) of 260,000 yuan, up 9% year-on-year [1] - The automotive gross margin was 25.5%, showing a slight decline due to reduced sales of the SU7 Ultra model, with operational profit from the automotive sector at 700 million yuan, marking its first profitable quarter [1] Group 2: Smartphone and AIoT Business - Smartphone revenue decreased by 3% year-on-year, primarily due to a decline in ASP in overseas markets, although this was partially offset by an increase in the proportion of high-end models in mainland China [1] - The smartphone gross margin was under pressure, declining by 0.4 percentage points to 11.1% due to rising storage prices [1][2] - AIoT revenue grew by 6% year-on-year, with a gross margin maintained at a high level of 23.9%, although growth rate slowed due to the reduction of national subsidies [1] Group 3: Future Outlook and Adjustments - The company anticipates competition in the automotive sector, leading to a downward revision of the 2026 sales target to 569,000 units from a previous estimate of 700,000 units [2] - The 2026 smartphone gross margin forecast has been lowered to 9.4% from 12.1%, while the overall gross margin for smartphone and AIoT combined is projected at 21.2% [2] - The target price for Xiaomi has been adjusted to 50 HKD, reflecting the impact of storage price increases on the smartphone business and competition in the automotive sector [3]