6 January 2026 | 11:08PM HKT Equity Research We hosted Xiaomi's General Manager of Investor Relations and Capital Markets Ran Xu and Senior IR Manager Isabella Gao for a virtual meeting with investors on Jan 5-6, as part of GS China Auto 2026 Management Outlook Call Series. Management shared business outlook on major segments in detail including smartphone, AIoT and smart EV, as well as technological outlook on Xiaomi's progress in AI, assisted driving and chipset. Management also highlighted key strategic ...

Key Takeaways from Xiaomi Corp. Conference Company Overview - **Company**: Xiaomi Corp. (1810.HK) - **Event**: GS Asia Leaders Conference and GS Communacopia + Technology Conference - **Dates**: September 3-9, 2025 Industry Focus - **Core Industries**: Smart Electric Vehicles (EV), AIoT (Artificial Intelligence of Things), Smartphones Key Points Smart EV - **Production Capacity**: Target of 350,000 units for 2025, with a stable delivery volume of approximately 10,000 units per week expected in the near term [7] - **Model Pipeline**: Focus on a "hero product" strategy with plans to introduce one major new SKU annually and new variants of existing models [8] - **Market Positioning**: Targeting the mid-to-premium segment, which constitutes half of China's auto sales volume for vehicles priced above RMB 150,000 [8] - **Profitability Outlook**: Guidance to achieve profitability in the second half of 2025, with a long-term goal of becoming one of the top 5 global auto companies within 15-20 years [11] - **Growth Outlook**: Anticipated revenue growth of 25-30% year-over-year for 2025, with a focus on high-quality growth rather than just scale [11] AIoT - **Air Conditioners (AC)**: Targeting 10 million shipments for 2025, with a new factory in Wuhan expected to start production in the second half of 2025 [10] - **Overseas Expansion**: Plans to enter the European EV market by 2027, initially through exports [11] - **Smart Features**: 80% of Xiaomi's AC units are internet-connected, allowing for smart controls and OTA software upgrades [10] - **Market Contribution**: Currently, close to 80% of IoT sales are from China, but management expects international markets to surpass China in revenue over time [12] Smartphones - **Market Share**: Ranked between No. 1 to No. 4 globally (excluding the US), with a target of 200 million annual shipments over the next 3-5 years [14] - **Profit Margins**: Facing higher memory costs impacting gross profit margins, but expecting recovery in Q4 2025 with new product launches [14] - **Premiumization Strategy**: Despite a tough market, management anticipates an upward trend in average selling prices (ASP) [14] - **Chip Development**: Plans to develop in-house chips for smartphones and EVs, focusing on consumer-oriented applications [14] Capital Allocation - **Investment Plans**: Plans to invest RMB 30 billion in R&D and RMB 15 billion in capital expenditures for 2025 [14] - **Manufacturing Strategy**: The smartphone factory will serve more as an R&D lab, with no plans for additional factories [14] Investment Thesis - **Long-term Growth**: Xiaomi is positioned for multi-year ecosystem expansion with projected revenue and EPS CAGRs of 26% and 36% from 2024 to 2027 [16] - **Competitive Advantages**: Strong balance sheet, software-hardware integration capabilities, and cost advantages in the EV supply chain [16] Risks - **Market Competition**: Intense competition in the smartphone industry could hinder market share gains [17] - **Profit Margin Pressures**: Potential for higher gross profit margin pressures in both smartphone and EV segments [17] - **Execution Risks**: Risks associated with brand premiumization and execution in the EV business [17] Conclusion Xiaomi Corp. is strategically positioned for growth in the Smart EV and AIoT sectors, with a focus on premiumization in smartphones. The company aims for significant revenue growth while navigating competitive and operational challenges.