Core Viewpoint - Xiaomi Group's stock price has shown weakness, dropping over 4% to a new low since April 2023, amid expectations of slightly lower-than-expected Q3 2025 earnings due to smartphone gross margins and IoT revenue underperformance [2][3] Group 1: Earnings Forecast - Citigroup forecasts Xiaomi's adjusted net profit for Q3 to reach 10.2 billion RMB, reflecting a 64% year-on-year increase but a 5% quarter-on-quarter decrease, impacted by unfavorable regional smartphone gross margins and rising memory product prices [2] - Huatai Securities shares a similar outlook, expecting Xiaomi's automotive business to break even in Q3, while maintaining an 11% gross margin for the smartphone segment despite rising memory costs [3] - CICC predicts a more optimistic scenario, estimating a 21.46% year-on-year revenue growth for Q3, reaching 112.36 billion RMB, with an adjusted net profit of 10.56 billion RMB, including profits from automotive and innovative businesses [3] Group 2: Automotive Business Performance - CICC anticipates that Xiaomi will deliver 109,000 vehicles in Q3, generating 29.43 billion RMB in revenue, driven by increased deliveries of the YU7 model and a rising average selling price [4] - Both Citigroup and Huatai Securities express cautious optimism regarding Xiaomi's automotive business, with expectations of profitability in Q3 and improved earnings as production capacity increases [2][3]

Core Viewpoint - Xiaomi Group's stock price has shown weakness, hitting a new low since April 2023, with analysts predicting mixed performance for the upcoming Q3 2025 earnings report, particularly due to lower smartphone margins and IoT revenue [1][2]. Group 1: Earnings Forecast - Citigroup expects Xiaomi's adjusted net profit for Q3 to reach 10.2 billion RMB, reflecting a year-on-year growth of 64% but a quarter-on-quarter decline of 5% [1]. - Huatai Securities predicts Xiaomi's automotive business will turn profitable in Q3, with smartphone margins expected to remain around 11% despite rising memory prices [2]. - CICC forecasts a more optimistic scenario, estimating a 21.46% year-on-year revenue increase for Q3, reaching 112.36 billion RMB, with adjusted net profit expected to grow by 68.88% to 10.56 billion RMB [2]. Group 2: Automotive Business Performance - Citigroup anticipates that Xiaomi's automotive operations will achieve a profit of 722 million RMB in Q3, despite concerns about the second phase of production expansion [1]. - Huatai Securities reports that Xiaomi delivered over 40,000 vehicles in September, indicating a positive trend in automotive profitability as production capacity increases [2]. - CICC estimates that Xiaomi will deliver 109,000 vehicles in Q3, generating revenue of 29.43 billion RMB, driven by increased deliveries of the YU7 model and a rising average selling price [3]. Group 3: Market Position and Strategy - Citigroup maintains a "Buy" rating for Xiaomi, with a target price slightly reduced to 65 HKD, citing unchanged long-term growth themes [1]. - Huatai Securities also maintains a "Buy" rating with a target price of 65.4 HKD, emphasizing the value of Xiaomi's IoT business and AI ecosystem [2].

Core Viewpoint - The company is expected to see significant revenue growth in Q2 2025, driven by its automotive and IoT businesses, despite challenges in the smartphone segment due to rising storage prices [1][3]. Automotive Business - The company anticipates approximately 81,000 vehicle shipments in Q2 2025, generating revenue of 20.4 billion RMB, a 10% increase quarter-on-quarter [2]. - The gross margin for the automotive segment is expected to improve by 0.5 percentage points to 23.7% as production ramps up [2]. - The company projects total vehicle sales of 436,000 units for the full year 2025, benefiting from economies of scale [2]. - The recent government initiatives to promote high-quality development in the electric vehicle sector are expected to enhance long-term profitability for industry participants [2]. Smartphone, IoT, and Internet Business - The company's smartphone shipments in China are projected to reach approximately 10.4 million units in Q2 2025, reflecting a year-on-year growth of 3.4% and an increase in market share from 14.1% to 15.1% [3]. - Smartphone revenue is expected to remain flat year-on-year, with gross margin potentially declining by 0.9 percentage points to 11.5% due to rising storage costs [3]. - The IoT business is forecasted to grow by 37% year-on-year in Q2 2025, with gross margin expected to remain above 22% [3]. - Internet business revenue is anticipated to grow by 15% year-on-year, maintaining a strong gross margin of around 75% [3]. Profit Forecast and Valuation - The company has revised its revenue forecasts for 2025-2027 downwards by 0.9%, 1.6%, and 1.2% respectively, and net profit forecasts down by 1.3%, 1.7%, and 1.5% to 40.45 billion, 50.47 billion, and 62.29 billion RMB [3]. - The target price for the company is set at 67.8 HKD, down from 71.2 HKD, based on a sum-of-the-parts valuation method, corresponding to a 40 times PE ratio for 2025 [3].