Investment Rating - The report maintains a "Buy" rating for Xiaomi Group with a target price of HKD 67.80, down from the previous HKD 71.20 [1][4][14]. Core Insights - Xiaomi's revenue for Q2 2025 is expected to grow by 29% year-on-year, with a net profit attributable to the parent company increasing by 56% [1][4]. - The automotive business is projected to generate revenue of RMB 20.4 billion in Q2 2025, reflecting a 10% quarter-on-quarter increase, with a focus on high-quality development in the automotive industry [2][4]. - The smartphone and IoT businesses are expected to face challenges due to rising storage prices, which may impact profit margins [3][4]. Summary by Sections Automotive Business - Q2 2025 automotive shipments are estimated at approximately 81,000 units, with an average selling price (ASP) increasing quarter-on-quarter, leading to a revenue of RMB 20.4 billion [2]. - The company anticipates total annual sales of 436,000 units for 2025, benefiting from scale effects that could enhance profit margins [2]. Smartphone/IoT/Internet Business - In Q2 2025, Xiaomi's smartphone shipments in China are expected to reach 10.4 million units, a 3.4% year-on-year increase, with market share rising to 15.1% [3]. - The IoT business is projected to grow by 37% year-on-year, while the internet services segment is expected to increase by 15% [3]. Profit Forecast and Valuation - Revenue forecasts for 2025-2027 have been adjusted downwards by 0.9%, 1.6%, and 1.2%, respectively, with net profit estimates also reduced by 1.3%, 1.7%, and 1.5% [4]. - The target price of HKD 67.80 corresponds to a 40x PE ratio for 2025, reflecting the company's valuation based on the sum-of-the-parts (SOTP) method [4][14].

Investment Rating - The report maintains a "Buy" rating for the company [8] - The target price is set at HKD 71.20 [8][9] Core Insights - The company's revenue for Q1 2025 reached a historical high of RMB 111.3 billion, with a year-on-year growth of 47% [1] - Adjusted operating profit increased by 114% year-on-year to RMB 9.96 billion [1] - The IoT and automotive business showed strong gross margins, with the IoT revenue growing by 58.7% year-on-year to RMB 32.3 billion [2] - The automotive segment's gross margin improved to 23.2%, benefiting from increased scale [3] - The smartphone average selling price (ASP) reached a record high of RMB 1,211, with a gross margin of 12.4% [4] Summary by Sections Revenue and Profitability - Q1 2025 revenue was RMB 111.3 billion, a 47% increase year-on-year [1] - Adjusted operating profit for Q1 2025 was RMB 9.96 billion, up 114% year-on-year [1] - IoT revenue reached RMB 32.3 billion, with a gross margin of 25.2%, up 5.4 percentage points year-on-year [2] Automotive Business - The company delivered 75,869 units of the SU7 series in Q1 [3] - The automotive segment reported a gross margin of 23.2%, exceeding expectations [3] - The first SUV, YU7, is expected to launch in July 2025, with a focus on consumer feedback post-launch [3] Smartphone Segment - The smartphone ASP reached RMB 1,211, marking a 5.8% year-on-year increase [4] - The smartphone business maintained a gross margin of 12.4% [4] - The launch of self-developed chips is anticipated to enhance the company's high-end market share [4] Valuation and Future Outlook - The target price of HKD 71.20 is based on a sum-of-the-parts (SOTP) valuation method, reflecting the growth potential in IoT and automotive sectors [5][17] - The forecasted net profit for 2025 is adjusted to RMB 40.99 billion, with a projected growth rate of 50.06% [7][15] - The report anticipates a continued increase in IoT revenue, projecting a 24% year-on-year growth for 2025 [2]