Core Viewpoint - Xiaomi Group's Q3 financial report shows impressive results, particularly with the automotive sector turning profitable for the first time, yet investment banks like Morgan Stanley and UBS have downgraded their ratings, reflecting a complex market sentiment towards Xiaomi's future growth [1][4]. Financial Performance - Xiaomi's total revenue for Q3 reached 113.1 billion yuan, exceeding analyst expectations by 0.5% and showing a year-on-year growth of 22.3% [2]. - Adjusted net profit was 11.31 billion yuan, surpassing analyst forecasts by 12.6% and demonstrating an 80.9% year-on-year increase, with a net profit margin of 10.0% [2]. - The automotive sector achieved a profit of 700 million yuan in Q3, while the core business adjusted net profit was 10.6 billion yuan [2]. Business Segment Analysis - Smartphone revenue was 46 billion yuan, slightly above analyst expectations by 0.3%, but showed a year-on-year decline of 3.1% [3]. - IoT revenue was 27.6 billion yuan, falling short of expectations by 1.9%, with a year-on-year growth of 5.5% [3]. - Internet revenue reached 9.4 billion yuan, exceeding expectations by 2.2% and growing 10.8% year-on-year [3]. Market Sentiment and Valuation - Despite strong financial results, investment banks downgraded Xiaomi's rating due to concerns over short-term valuation pressures and long-term risks, as the stock price has risen nearly 60% since the beginning of 2025, with a price-to-earnings ratio of 40 times [4]. - Optimistic forecasts for Xiaomi's electric vehicle sales, predicting 1.75 million units by 2030, have contributed to high valuations, but there are concerns about whether these expectations are overly aggressive [4]. Growth Quality and Market Confidence - Xiaomi has built a synergistic ecosystem of "hardware + software + services," with smartphones, electric vehicles, and AIoT businesses complementing each other [7]. - However, market confidence is hindered by the competitive landscape in the electric vehicle sector, where established players like Tesla and BYD hold significant advantages [7]. - The company is investing in core technologies for electric vehicles and aims to enhance user engagement through innovative solutions, which could improve monetization [7]. Long-term Outlook - Xiaomi's valuation ceiling will depend on its ability to convert ecosystem advantages into sustainable profit growth, particularly in the electric vehicle sector [8]. - Achieving profitability in the electric vehicle business by 2026 and stabilizing smartphone margins are critical for future valuation increases [8]. - The contrast between Xiaomi's financial performance and investment ratings presents an opportunity for investors to reassess the company's long-term value [8].

Core Viewpoint - Citic Securities projects Xiaomi Group's revenue for 2025 and 2026 to reach 473.9 billion and 606.6 billion CNY respectively, with year-on-year growth of 30% and 28% [1] - The adjusted net profit is expected to be 43.3 billion and 54.4 billion CNY for the same years, reflecting year-on-year increases of 59% and 25% [1] - The target price is set at 58.8 HKD, with a "Buy" rating, indicating a favorable valuation for Xiaomi [1] Revenue and Profit Projections - Xiaomi's Q3 revenue is anticipated to reach 110.1 billion CNY, representing a year-on-year increase of 19% [1] - The adjusted net profit for Q3 is expected to exceed 10.1 billion CNY, with a year-on-year growth of 62% [1] Automotive Business Insights - The automotive segment is projected to achieve profitability in Q3, with a delivery volume of 109,000 units and an average selling price (ASP) showing a quarter-on-quarter increase [2] - The gross margin for the automotive sector is expected to slightly decrease to over 25% due to a lower proportion of higher-end models [2] - The delivery volume in September surpassed 40,000 units, with expectations for continued growth in October [2] Smartphone Market Performance - Xiaomi's global smartphone shipment for Q3 2025 is estimated at approximately 43.5 million units, reflecting a year-on-year growth of 1.8% and maintaining a global market share of 13.5% [1] - The average selling price (ASP) of smartphones is expected to decline slightly quarter-on-quarter, influenced by changes in product mix [1] - The high-end strategy is progressing, with the 17 series expected to outperform the 15 series in terms of lifecycle sales, and a significant increase in the proportion of Pro and ProMax models [1]

Core Viewpoint - Citic Securities forecasts Xiaomi Group's revenue for 2025 and 2026 to reach 473.9 billion and 606.6 billion CNY respectively, with year-on-year growth of 30% and 28% [1] - The adjusted net profit is expected to be 43.3 billion and 54.4 billion CNY for the same years, reflecting year-on-year growth of 59% and 25% [1] - The target price is set at 58.8 HKD, with a "Buy" rating, indicating a favorable valuation for Xiaomi [1] Revenue and Profit Forecast - Xiaomi's revenue for Q3 is projected to reach 110.1 billion CNY, representing a year-on-year increase of 19% [1] - The adjusted net profit for Q3 is expected to exceed 10.1 billion CNY, with a year-on-year growth of 62% [1] - The automotive segment is anticipated to achieve profitability in Q3, with a delivery volume of 109,000 units [2] Smartphone Segment Analysis - The global smartphone shipment for Xiaomi in Q3 2025 is estimated at approximately 43.5 million units, showing a year-on-year growth of 1.8% [1] - Xiaomi's global market share remains stable at 13.5% year-on-year [1] - The average selling price (ASP) of smartphones is expected to decline slightly due to changes in product mix, while the gross margin is projected to decrease to 11% [1] IOT and Internet Business - The IOT segment is expected to see a revenue growth of 5% year-on-year, despite high base effects and increased competition [2] - The internet business continues to show steady growth, maintaining strong gross margins [2] Automotive Business Outlook - The automotive segment is projected to see significant capacity improvements in the coming year, with a focus on new models and international expansion [2] - The ASP for vehicles is expected to increase due to higher deliveries of the YU7 model, although the gross margin may slightly decline to over 25% [2] - The delivery volume in September surpassed 40,000 units, with expectations for continued growth in October [2]

Core Insights - The automotive delivery volume is steadily increasing, indicating potential profitability at the operational level [1] - The smartphone gross margin is expected to be under pressure due to rising storage costs, with hopes that the high-end shift of the Xiaomi 17 series will mitigate this impact in Q4 [2] Financial Projections - Adjusted revenue forecasts for Xiaomi Group (1810.HK) for FY2025E-FY2027E are set at RMB 482.3 billion, 634.7 billion, and 750.6 billion respectively, down from previous estimates of RMB 489.1 billion, 641.8 billion, and 758.4 billion [1] - Adjusted net profit forecasts are revised to RMB 43.6 billion, 67.9 billion, and 83.3 billion for the same period, compared to prior estimates of RMB 45.4 billion, 68.1 billion, and 83.6 billion [1] - The target price for Xiaomi Group is adjusted to HKD 65.7, maintaining a "Buy" rating [1] Automotive Sector Performance - The automotive delivery volume is expected to reach approximately 109,000 units in Q3, with an anticipated increase in average selling price (ASP) due to the ramp-up of Yu7 deliveries, leading to an estimated automotive sales revenue of around RMB 29.2 billion [1] - Xiaomi's automotive division is projected to achieve operational profitability in Q3 due to scale effects and cost reduction measures [1] Smartphone Market Dynamics - In Q3 2025, global smartphone shipments increased by 2.6% year-on-year, with Xiaomi's shipments rising by 1.8% to 43.5 million units, capturing a market share of 13.5%, a slight decline of 0.1 percentage points year-on-year [2] - In the Chinese market, Xiaomi's smartphone shipments decreased by 1.7% to 10 million units in Q3 2025 [2] - The smartphone gross margin is expected to decline by 0.5 percentage points to 11% in Q3 due to the impact of rising storage costs and a decrease in sales proportion from the Chinese market [2] IOT and Internet Revenue - IOT revenue is projected to grow by 6% year-on-year to RMB 27.7 billion in Q3, although it is expected to decline quarter-on-quarter due to seasonal factors and subsidy reductions [2] - The IOT gross margin is anticipated to increase by 0.5 percentage points to 23% [2] - Internet revenue is expected to rise by 7.7% year-on-year, maintaining a gross margin of 75.4% quarter-on-quarter [2]

Investment Rating - The report maintains a "Buy" rating for Xiaomi Group (1810.HK) with a target price adjusted to HKD 65.7 [7][13]. Core Insights - The automotive delivery volume is steadily increasing, indicating potential profitability at the operational level. The report anticipates that Xiaomi's automotive deliveries will approach 109,000 units in Q3, with an expected automotive sales revenue of approximately RMB 29.2 billion [3][11]. - The smartphone segment is facing pressure on gross margins due to rising storage costs, but the upcoming Xiaomi 17 series is expected to shift towards higher-end models, which may mitigate these impacts in Q4 [3][11]. - The Internet of Things (IoT) segment is projected to show stable revenue and gross profit contributions, with expected revenue growth of 6% year-on-year in Q3 [11]. Financial Summary - Total revenue projections for Xiaomi Group are as follows: RMB 270.971 billion in 2023, RMB 365.932 billion in 2024, RMB 482.278 billion in 2025E, RMB 634.727 billion in 2026E, and RMB 750.562 billion in 2027E, reflecting a growth rate of 35.0% in 2024 and 31.8% in 2025E [5][16]. - Adjusted net profit forecasts are RMB 19.273 billion for 2023, RMB 27.235 billion for 2024, RMB 43.629 billion for 2025E, RMB 67.894 billion for 2026E, and RMB 83.319 billion for 2027E, with a significant growth of 126.3% in 2023 [5][16]. - The gross profit margin is expected to be 21.2% in 2023, slightly decreasing to 20.9% in 2024, and then improving to 22.6% by 2025E [5][16]. Revenue Breakdown - Smartphone revenue is projected to decline slightly in the short term, with a year-on-year decrease of 5.8% expected in 2023, but a recovery is anticipated in subsequent years [14]. - IoT revenue is expected to grow steadily, with projections of RMB 134.976 billion by 2025E, reflecting a year-on-year growth of 29.7% [14]. - Automotive revenue is projected to reach RMB 106.647 billion by 2025E, with a significant year-on-year growth of 225.6% [14]. Valuation Metrics - The report assigns a price-to-earnings (PE) ratio of 30x for Xiaomi's core business (smartphones, IoT, and internet services) for FY2025, reflecting a premium due to the synergy across hardware and AI potential [13][18]. - The automotive business is valued at a price-to-sales (PS) ratio of 2.5x for FY2025, based on Xiaomi's established supply chain management capabilities and brand strength [13][18].

Group 1 - The core viewpoint of the reports indicates that Cathay Pacific Securities has adjusted Xiaomi Group-W's (01810) revenue forecasts for FY2025E-FY2027E to 482.3 billion, 634.7 billion, and 750.6 billion RMB respectively, down from previous estimates of 489.1 billion, 641.8 billion, and 758.4 billion RMB [1] - The adjusted net profit forecasts for Xiaomi Group are now 43.6 billion, 67.9 billion, and 83.3 billion RMB for FY2025E-FY2027E, compared to previous estimates of 45.4 billion, 68.1 billion, and 83.6 billion RMB [1] - The target price for Xiaomi Group has been adjusted to 65.7 HKD, while maintaining a "Buy" rating [1] Group 2 - In Q3 2025, Xiaomi's automotive delivery volume is expected to approach 109,000 units, with an anticipated increase in average selling price (ASP) due to the ramp-up of Yu7 deliveries, leading to an estimated automotive sales revenue of approximately 29.2 billion RMB [1] - The company is projected to achieve operational profitability in its automotive segment in Q3, driven by scale effects and cost reduction measures [1] Group 3 - According to IDC, global smartphone shipments in Q3 2025 increased by 2.6% year-on-year, with Xiaomi's smartphone shipments rising by 1.8% to 43.5 million units, capturing a market share of 13.5%, a slight decrease of 0.1 percentage points year-on-year [2] - In the Chinese market, Xiaomi's smartphone shipments fell by 1.7% year-on-year to 10 million units, influenced by a decline in sales proportion and rising storage costs [2] - The company's IoT segment is prioritized for profitability, with expected revenue growth of 6% year-on-year to 27.7 billion RMB in Q3, despite a slight quarter-on-quarter decline [2] Group 4 - Internet revenue is expected to grow by 7.7% year-on-year in Q3, maintaining a gross margin of 75.4% quarter-on-quarter [2] - The Xiaomi 17 series, launched at the end of September, has seen total sales increase by 30% year-on-year, with the Pro version accounting for over 80% of sales, indicating significant success in the high-end market [2]

Group 1 - The core viewpoint of the report is that Xiaomi Group's revenue and profit forecasts for FY2025E-FY2027E have been adjusted downwards, with target prices set at HKD 65.7 while maintaining a "Buy" rating [1] - Xiaomi's automotive delivery volume is expected to reach approximately 109,000 units in Q3, with an anticipated increase in average selling price (ASP) due to the ramp-up of Yu7 deliveries, leading to an estimated automotive sales revenue of around RMB 29.2 billion [1] - The company is projected to achieve operational profitability in its automotive segment in Q3, driven by economies of scale and cost reduction effects [1] Group 2 - According to IDC, global smartphone shipments increased by 2.6% year-on-year in Q3 2025, with Xiaomi's shipments rising by 1.8% to 43.5 million units, capturing a market share of 13.5% [2] - In the Chinese market, Xiaomi's smartphone shipments declined by 1.7% to 10 million units, with a slight decrease in gross margin expected due to a drop in sales proportion and rising storage costs [2] - The IOT segment is prioritized for profitability, with expected revenue growth of 6% year-on-year to RMB 27.7 billion in Q3, despite a seasonal decline, and a slight increase in gross margin [2] - Internet services are projected to contribute stable revenue and gross margin, with an expected year-on-year revenue increase of 7.7% and a gross margin of 75.4% in Q3 [2]