Financial Data and Key Metrics Changes - Total revenue for Q3 2025 reached RMB 113.1 billion, up 22.3% year-on-year, marking the fourth consecutive quarter exceeding RMB 100 billion [4][17] - Gross profit margin increased to 22.9%, up 2.5 percentage points year-on-year, achieving a new record high [5][17] - Adjusted net profit reached RMB 11.3 billion, up 81% year-on-year, setting a new record high [5][23] Business Line Data and Key Metrics Changes - Revenue from the smartphone segment was RMB 46 billion, accounting for 40.6% of total revenue, with global smartphone shipments reaching 43.25 million units, marking a 0.5% year-on-year increase [17][18] - IoT business revenue was RMB 27.6 billion, with a gross margin of 23.9%, achieving seven consecutive quarters of year-on-year growth [10][19] - The smart EV, AI, and other new initiative segment generated revenue of RMB 29 billion, accounting for 25.6% of total revenue, with smart EV sales reaching RMB 28.3 billion [21][22] Market Data and Key Metrics Changes - Xiaomi ranked among the top three in global smartphone shipments with a market share of 13.6%, and achieved year-on-year market share growth in all regions except India [7][18] - In mainland China, smartphone market share reached 14.9%, with a 0.7 percentage point increase year-on-year [18] - The company ranked second in Latin America and the Middle East, with market shares of 17.9% and 16.9%, respectively [7] Company Strategy and Development Direction - The company aims to enhance its premiumization strategy, targeting the ultra-premium segment above RMB 6,000 as a new objective for the next five years [8][9] - The launch of Xiaomi HyperOS 3 is expected to improve user experience and drive product competitiveness [9] - The company plans to invest over RMB 200 billion in R&D over the next five years, with R&D expenses exceeding RMB 30 billion this year [14][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in ensuring stable raw material supply despite rising memory costs and supply-demand dynamics [10] - The company anticipates a decline in smartphone gross margins due to increased memory costs but plans to mitigate this through product mix upgrades and ASP increases [30][31] - Management remains optimistic about the growth of the IoT business and the expansion of overseas markets [12][19] Other Important Information - The company achieved a record high of 742 million global MAUs in September 2025, an 8.2% increase year-on-year [20] - The smart home appliance factory commenced operations, with a planned peak annual production capacity of 7 million units [11][19] - The company was named to the Fortune Global 500 list for the seventh consecutive year, ranking 297th [14] Q&A Session Summary Question: Concerns about memory cost impact on smartphone gross margin and EV delivery strategy - Management acknowledged the long cycle of memory cost increases and its impact on gross margins, stating that price increases and product structure optimization will be necessary to mitigate this [27][30] - For EVs, management noted rising delivery volumes and improvements in delivery schedules due to efficiency enhancements [33][34] Question: Future smartphone strategy and EV subsidies impact on gross margin - Management indicated that while smartphone prices may increase, the overall market may experience a downturn, and they aim to maintain a premium strategy [39][41] - Regarding EVs, management expects some impact on gross margin due to subsidies but believes current margins are healthy [42][43] Question: AIoT growth and large appliances strategy - Management highlighted the integration of AI with IoT devices and the importance of maintaining an open ecosystem for future growth [46][66] - For large appliances, management emphasized the importance of innovation and the impact of national subsidies, stating that they will adapt to changes in the market [50][51] Question: Autonomous driving advancements and overseas development - Management confirmed that autonomous driving is a critical focus for future EV development, with significant enhancements in technology and data utilization [56][57] - The company is expanding its overseas presence, particularly in East Asia and Southeast Asia, while maintaining good relationships with traditional distributors [58][59] Question: Inventory management and Miloco ecosystem plans - Management reassured that inventory levels are well-managed and that they will maintain an open ecosystem for Miloco while exploring AI integration [64][66] Question: Smartphone market stability and large appliance factory role - Management noted that the smartphone market is currently stable, with cost increases impacting all players, and emphasized the advanced capabilities of the new large appliance factory [70][73]