Summary of Xiaomi Corp Q1 2025 Earnings Call Company Overview - **Company**: Xiaomi Corp - **Rating**: Outperform - **Price Target**: HK$60.00 (previously HK$55.00) [1] Key Financial Performance - **Q1 2025 Revenue**: RMB 111.3 billion, up 47.4% year-over-year [1][2] - **Gross Margin**: 22.8%, a record high [1] - **Net Income**: Increased by 161% year-over-year, achieving a net margin of 9.8% [1] - **Earnings Per Share (EPS)**: Projected to reach RMB 1.73 for 2025 and RMB 2.08 for 2026, with EPS estimates raised by 28% for 2025 [3][17] Business Segment Performance Smartphones - **Market Share in China**: Increased to 18.8%, up over 4 percentage points year-over-year [2][11] - **Shipments Growth**: 40% growth in smartphone shipments in China, significantly outpacing the industry growth rate of 5% [11] - **ASP Performance**: Resilient due to strong domestic demand and government subsidies [2] IoT & Lifestyle Products - **Revenue Growth**: 59% year-over-year, with large home appliances growing by 114% [2][13] - **Gross Margin**: Expanded by 5 percentage points to 25.2% [2][13] - **Forecast**: Revenue expected to reach RMB 141.2 billion in 2025, with a gross margin of 25% [14] Internet Services - **Revenue Growth**: Expected to reach RMB 38.8 billion in 2025, representing a 14% year-over-year increase [15] - **Advertising ARPU**: Increased by 16% this quarter, contributing to improved gross margins of 76.9% [15][27] Electric Vehicles (EVs) - **Sales Volume Forecast**: Expected to deliver 417k units in 2025 [16] - **Revenue Forecast**: Projected at RMB 109 billion in 2025 [16] - **Upcoming Model**: YU7 SUV launch scheduled for July 2025 [16][31] Investment Implications - **Valuation Method**: Sum-of-the-parts (SOTP) valuation correlating to 27x 1-year forward P/E [4][17] - **Market Capitalization**: HKD 1,341.48 billion [5] - **Price Target Upside**: 16% from the current price [5][33] Market Outlook - **Domestic Market**: Strong growth expected, with a forecast of 51 million smartphone shipments in 2025, a 21.2% year-over-year increase [11] - **International Market**: Uncertain outlook due to regulatory challenges in India, but potential growth in emerging markets like Africa [12] Additional Insights - **Product Development**: Introduction of in-house developed 3nm SoC, Xring O1, expected to enhance brand equity [11] - **Management Confidence**: High confidence in the growth outlook for IoT and lifestyle products, supported by ongoing enhancements in product development capabilities [14] This summary encapsulates the key points from Xiaomi Corp's Q1 2025 earnings call, highlighting the company's strong performance across various segments and its optimistic outlook for future growth.