Financial Report Analysis - Xiaomi Group reported total revenue of 227.2 billion yuan for the first half of 2025, a year-on-year increase of 38.2%, with adjusted net profit reaching 21.5 billion yuan, up 69.8% year-on-year, indicating strong growth logic being validated [5] - The smartphone business generated revenue of 96.132 billion yuan in the first half of 2025, with a slight increase in Q2 shipment volume to 42.4 million units, but a decrease in average selling price (ASP) to 1,073.2 yuan due to the impact of the Redmi A5 series [6] - The AIoT and internet services segments generated significant revenue, with AIoT revenue reaching 71.05 billion yuan and internet services revenue around 20.5 billion yuan, showcasing their importance as profit contributors [8][9] Business Segments - The smartphone segment is transitioning from a growth engine to a strategic cornerstone, providing stable cash flow and user entry points for the ecosystem [7] - The AIoT and internet services are seen as the core of Xiaomi's profit and ecological moat, with AIoT's gross margin exceeding 22.5% and internet services achieving a gross margin of over 75% [8][9] - The smart electric vehicle segment generated impressive revenue of 39.8 billion yuan in the first half of 2025, with a gross margin of 24.9%, indicating strong market potential and operational efficiency [10][11] Valuation Projection - A sum-of-the-parts (SOTP) valuation approach is deemed appropriate for Xiaomi due to its diverse business segments [13] - Projected total revenue for 2025 is estimated to be between 472 billion and 492 billion yuan, with adjusted net profit expected to be around 42.5 billion yuan [18] - The core business valuation is estimated at 9,135 billion yuan, while the smart vehicle business is valued at 2,500 billion yuan, leading to a total valuation of 12,635 billion yuan [21] Stock Price Prediction and Investment Strategy - The stock price is projected to have three key price ranges: undervalued below 48 HKD, reasonable between 52-60 HKD, and overvalued above 68 HKD [24][25][26] - The undervalued range suggests a potential buying opportunity for long-term investors, while the reasonable range reflects a balanced view of growth and value [24][25] - The overvalued range indicates a market that may be overly optimistic about future growth, suggesting a potential exit point for investors [26]