Overall Performance - Xiaomi Group reported total revenue of 113.1 billion, a year-on-year increase of 22.3%, primarily driven by the automotive business, while traditional business (smartphones and AIoT) revenue grew only 1.6% [1][21] - Gross margin improved to 22.9%, supported by the increased contribution from the automotive sector, although smartphone margins declined due to intensified competition [1][24] Automotive Business - The automotive segment generated revenue of 29 billion, with a shipment of 109,000 units and an average selling price of 260,000 [1][26] - Automotive gross margin rose to 25.5%, slightly below market expectations, primarily due to a decrease in the proportion of high-margin models [1][29] - The automotive business achieved a core operating profit of 6.8 billion, marking its first profitable quarter [1][5] Smartphone Business - Smartphone revenue was 46 billion, down 3.1% year-on-year, with a shipment volume increase of 0.5% but a decline in average selling price by 3.6% [2][31] - The smartphone gross margin fell to 11.1%, impacted by rising storage costs and increased market competition [2][37] - In the domestic market, smartphone shipments declined by 1.8%, while overseas shipments grew by 2.7% [2][33] IoT Business - IoT revenue reached 27.6 billion, a year-on-year increase of 5.6%, significantly lower than previous quarters due to a decline in demand for large appliances [3][39] - The slowdown in IoT growth was attributed to the tightening of subsidies, which previously boosted sales [12][14] Internet Services - Internet services revenue was 9.4 billion, up 10.8% year-on-year, primarily driven by advertising revenue [4][42] - Advertising services generated 7.2 billion, reflecting a 16.1% increase, while value-added services saw a slight decline [4][42] Profitability - Core operating profit was 6.7 billion, with adjusted net profit reported at 11.3 billion [5][51] - Traditional business core profit was approximately 60.3 billion, while the automotive segment contributed 6.8 billion to the overall profit [5][51] Market Outlook - The company faces challenges in both traditional and automotive sectors, with concerns over future demand and competition [7][30] - The automotive business is currently in a "supply exceeds demand" situation, with a significant backlog of orders expected to be consumed by mid-next year [10][30]

Group 1 - Xiaomi's marketing prowess, led by Lei Jun, has generated significant attention for both Xiaomi smartphones and cars, but this attention can also lead to backlash [1] - Recently, Xiaomi's China market manager Wang Teng was dismissed for serious violations, marking one of the company's strictest internal disciplinary actions in recent years [3][5] - Wang Teng allegedly leaked confidential information, including pricing strategies and supply chain costs, for personal gain, although he denied selling company secrets [5] Group 2 - Negative feedback has emerged regarding the Xiaomi YU7 car, with owners discovering "test car" markings on their new vehicles, raising doubts about the authenticity of their purchases [7][9] - Xiaomi's customer service explained that these markings are from static stickers used during factory evaluations, but some customers remain skeptical, fearing their cars were used for dynamic testing [9] - The controversy surrounding the YU7 follows a series of public relations challenges for Xiaomi, including a tragic accident involving the SU7 model that has led to increased scrutiny of smart driving regulations [10][11] Group 3 - The company faced criticism for marketing a non-automotive-grade chip in its vehicles while promoting a car accessory as automotive-grade, leading to public outrage [11] - Reports of prepayment demands for vehicles still in production have drawn parallels to real estate practices, further complicating Xiaomi's reputation in the automotive sector [14] - The ongoing controversies highlight the challenges Xiaomi faces as it navigates the automotive market, with increasing scrutiny on its marketing strategies and product quality [14]

Core Insights - Xiaomi's founder and CEO Lei Jun announced limited-time purchase benefits for Xiaomi cars in September, including lifetime free use of assisted driving for models YU7, SU7, and SU7 Ultra [1] Group 1: Product Offerings - The Xiaomi Yu7 includes Nappa leather seats, an electric front trunk, and a HEPA high-efficiency air purification system, along with lifetime free use of Xiaomi HAD end-to-end assisted driving [3] - The Xiaomi SU7 offers Nappa leather seats valued at 8000 yuan and lifetime free use of assisted driving [3] - The Xiaomi SU7 Ultra features a carbon fiber sports steering wheel, carbon fiber center console trim, and carbon fiber front seat back panels, along with five years of free basic maintenance and lifetime free use of assisted driving [3] Group 2: Sales Performance - Xiaomi's official Weibo account reported that by August 2025, the delivery volume of Xiaomi cars is expected to exceed 30,000 units [3]

Core Viewpoint - Xiaomi Group reported a strong Q2 performance with record-high revenue and profit, showcasing significant growth across multiple business segments, particularly in smartphones, IoT, and innovative sectors like electric vehicles and AI [1][2][4]. Financial Performance - Revenue reached 116 billion yuan, a year-on-year increase of 30.5%, marking the third consecutive quarter exceeding 100 billion yuan [1]. - Adjusted net profit was 10.8 billion yuan, up 75.4% year-on-year, continuing a trend of surpassing 10 billion yuan for two consecutive quarters [1]. Business Segments - The smartphone and AIoT segment generated 94.7 billion yuan, a 14.8% increase year-on-year, with smartphone revenue at 45.5 billion yuan and IoT products at 38.7 billion yuan, which grew by 44.7% [1][2]. - The innovative business segment, including electric vehicles and AI, reported revenue of 21.3 billion yuan, a staggering 234% increase year-on-year [1]. Market Position - Xiaomi maintained a strong position in the global smartphone market, ranking in the top three for 20 consecutive quarters, with a domestic market share of 16.8% [2][3]. - In Southeast Asia, Xiaomi's market share rose to 18.9%, while in Europe, it returned to second place with a 23.4% share [3]. Product Performance - Smart home appliances saw significant growth, with smart air conditioning units shipped exceeding 5.4 million, a growth rate of over 60% [3]. - The high-end smartphone segment saw Xiaomi's share in the 4000-5000 yuan price range increase to 24.7%, while the 5000-6000 yuan segment reached 15.4%, reflecting a shift towards premium products [5][6]. R&D and Innovation - R&D investment reached a record high of 7.8 billion yuan, a 41.2% increase year-on-year, with plans to invest 30 billion yuan this year [7]. - Xiaomi launched its first 3nm flagship chip, becoming the first in mainland China to develop such technology, and achieved significant milestones in the electric vehicle sector [7][8]. Brand Recognition - Xiaomi ranked second in the Kantar BrandZ Globalization Brand list and improved its position in the Fortune Global 500, moving up 100 places to rank 297 [4].