Core Insights - Xiaomi Group achieved record high revenue and adjusted net profit in Q2 2025, with revenue reaching 116 billion yuan, a year-on-year increase of 30.5%, marking three consecutive quarters of over 100 billion yuan [1] - Adjusted net profit was 10.8 billion yuan, exceeding Bloomberg's expectation of 10.2 billion yuan, and representing a year-on-year increase of 75% [1] - The performance was driven by strong IoT business growth, improved EV gross margins, and a slight offset from a decline in smartphone revenue [1] Smartphone Segment - Q2 smartphone revenue was 45.5 billion yuan, down 2% year-on-year, with a gross margin of 11.5%, a decrease of 0.7 percentage points [1] - The average selling price (ASP) was 1,073 yuan, down 2.7% year-on-year [1] - The company adjusted its annual shipment target to 175 million units, emphasizing product structure over sales volume [2] IoT Segment - Q2 IoT revenue reached 38.7 billion yuan, a year-on-year increase of 45%, exceeding expectations [2] - The gross margin for IoT was 22.5%, down 2.7 percentage points quarter-on-quarter, primarily due to promotional activities [2] - Smart home appliances saw significant growth, with air conditioner shipments exceeding 5.4 million units, a year-on-year increase of over 60% [2] Electric Vehicle Segment - Q2 revenue from the electric vehicle (EV) segment was 21.3 billion yuan, with 81,300 units delivered and an ASP of 253,700 yuan [3] - The operating loss in this segment was reduced to 300 million yuan from 500 million yuan in Q1, with a gross margin of 26.4% [3] - The management maintained the annual delivery target of 350,000 units and expects to achieve operational profitability in the second half of 2025 [3] Future Outlook - The company has raised its revenue forecasts for 2025-2027 to 485.4 billion, 597.2 billion, and 725.8 billion yuan, respectively [3] - Adjusted net profit forecasts for the same period are now 43.6 billion, 51.2 billion, and 64.9 billion yuan [3] - The company aims to enter the European market by 2027 and plans to expand its sales and service network in Southeast Asia and Europe [2][3]

Group 1 - Xiaomi Group reaffirms its R&D investment guidance of 30 billion yuan by 2025 and 200 billion yuan from 2026 to 2030 [1] - The company launched its first SUV YU7, 3nm flagship SoC Xuanjie O1, and integrated self-developed 4G baseband Xuanjie T1, along with several flagship products [1][2] - YU7 is positioned as a "luxury high-performance SUV" with a body size of 4999/1996/1600mm and a wheelbase of 3000mm, featuring laser radar and NVIDIA Thor [1][2] Group 2 - The 3nm flagship SoC Xuanjie O1 features 19 billion transistors and a chip area of only 109 square millimeters, with a CPU configuration of 10 cores [2] - The GPU is a 16-core Immortalis-G925, supporting dynamic performance scheduling, and the self-developed ISP has reached its fourth generation [2] - The Xuanjie T1 SoC integrates a self-developed 4G baseband, marking a significant breakthrough in communication technology for Xiaomi [3] Group 3 - Xiaomi's chip development strategy has evolved since 2014, with a focus on peripheral functional chips, leading to the establishment of the Xuanjie project in early 2021 [3] - The company has invested 13.5 billion yuan in R&D as of April 2025, with a projected budget of over 6 billion yuan for 2025 [3] - The high-end strategy is expected to enhance product strength, profit margins, and valuation, maintaining a buy rating [3][4] Group 4 - The release of YU7 and the Xuanjie O1/T1 signifies a continued strengthening of the product portfolio and a solidification of the technological moat [4] - Xiaomi possesses a unique "human-vehicle-home" ecosystem and competitive advantages [4] - Revenue forecasts for 2025-2027 are set at 469.4 billion, 572 billion, and 684.4 billion yuan, with adjusted net profits of 37.6 billion, 45.7 billion, and 55.8 billion yuan respectively [4]

Investment Rating - The report maintains a "Buy" rating for Xiaomi Group [4][7][8] Core Insights - Xiaomi Group's 2024 and Q4 performance reached historical highs, with 2024 revenue of 365.9 billion RMB, a year-on-year increase of 35%, and adjusted net profit of 27.2 billion RMB, up 41% [7][8] - The company has raised its 2025 delivery target for electric vehicles to 350,000 units, up from 300,000, with a projected revenue of 32.8 billion RMB from this segment [7][8] - The smartphone segment continues to validate its high-end strategy, targeting 180 million units shipped in 2025, with a revenue of 191.8 billion RMB in 2024, a 22% increase [7][8] - The IoT segment saw a significant revenue increase, surpassing 100 billion RMB, with a target of 50% growth in 2025 [7][8] - The internet services segment achieved record revenue and gross margin, with a total revenue of 34.1 billion RMB in 2024, a 13.3% increase [7][8] - Xiaomi's retail strategy includes expanding its store count to 20,000 by 2025, with a focus on AI and core technologies [7][8] Financial Data and Profit Forecast - Revenue projections for Xiaomi Group are as follows: - 2023: 270.97 billion RMB - 2024: 365.91 billion RMB - 2025E: 469.36 billion RMB - 2026E: 572.04 billion RMB - 2027E: 684.43 billion RMB - Net profit projections are: - 2023: 19.27 billion RMB - 2024: 27.31 billion RMB - 2025E: 37.62 billion RMB - 2026E: 45.74 billion RMB - 2027E: 55.77 billion RMB [3][8]