Investment Rating - The report does not explicitly provide an investment rating for the company [2] Core Insights - The report aligns with the views of CITIC Lyon Research, indicating that Xiaomi's Q4 2025 performance met expectations, with total revenue increasing by 7.3% year-on-year to 116.9 billion yuan, while adjusted core EBIT (excluding other income) fell by 32% to 4.6 billion yuan [4] - The smartphone and AIoT segments are facing challenges, but the electric vehicle (EV) business remains strong, with expectations of continued resilience in 2026 due to new model launches [4] Summary by Relevant Sections Smartphone Performance - Xiaomi's smartphone revenue decreased by 13.6% year-on-year to 44.3 billion yuan, primarily due to declines in both shipment volume and average selling price (ASP) [5] - Global smartphone shipments fell by approximately 12% year-on-year to 37.7 million units, with declines in China, India, and other regions [5] - The average selling price decreased by 2.2% year-on-year to 1,176 yuan, influenced by lower prices in overseas markets, although partially offset by higher prices in China due to an increase in high-end model sales [5] - The gross margin for smartphones declined by 3.8 percentage points year-on-year to 8.3% due to surging memory costs [5] AIoT Business - AIoT revenue fell by 20.3% year-on-year to 24.6 billion yuan, impacted by reduced state subsidies and increased competition, although growth in overseas sales of tablets and TVs provided some offset [6] - The home appliance segment showed strong growth, with air conditioner sales up 24% year-on-year to 8.5 million units, refrigerators up 4% to 2.8 million units, and washing machines up 18% to 2.3 million units [6] - AIoT gross margin remained stable at 20.1% [6] Electric Vehicle Segment - Xiaomi's electric vehicle revenue surged by 122% year-on-year to 36.3 billion yuan, driven by the launch of the YU7 series, with deliveries reaching 145,115 units [7] - The average selling price for electric vehicles increased by 6.6% year-on-year to 249,846 yuan, with the EV segment achieving an EBIT of 1.1 billion yuan [7] - The target for electric vehicle deliveries in 2026 is set at 550,000 units, with a strong order book for the new SU7 model [7] Catalysts - Key catalysts include the release of new smartphone models, recovery in smartphone shipments, healthy gross margin levels, integration of AI products, and progress in the electric vehicle business [9]

Investment Rating - The report maintains a "Recommended" rating for Xiaomi Group [6] Core Views - Xiaomi Group achieved record high revenue in Q2 2025, with a total revenue of 1159.56 billion RMB, representing a year-over-year increase of 30.5% [2] - The company's adjusted net profit for Q2 2025 reached 108.31 billion RMB, a year-over-year increase of 75.4% [2] - The automotive business is entering a phase of rapid growth, with Q2 2025 revenue from smart electric vehicles reaching 206 billion RMB [3] - The company is focusing on high-end smartphone development and has successfully launched its self-developed 3nm flagship SoC chip [4] Summary by Sections Financial Performance - For H1 2025, Xiaomi Group reported revenue of 2272.49 billion RMB, a year-over-year increase of 38.23%, and an adjusted net profit of 215.06 billion RMB, up 69.8% [1] - The gross margin for H1 2025 was 22.7%, an increase of 1.3 percentage points year-over-year [1] Business Segments - The smartphone segment generated revenue of 455.20 billion RMB in Q2 2025, with a year-over-year growth of 8.9% [3] - The IoT segment achieved revenue of 387.12 billion RMB in Q2 2025, marking a year-over-year increase of 44.7% [3] - The automotive and AI innovation segment reported revenue of 212.63 billion RMB in Q2 2025, with a gross margin of 26.4% [3] Market Position - Xiaomi's global smartphone market share reached 14.7% in Q2 2025, maintaining a top-three position for 20 consecutive quarters [3] - The company ranked second in the "2025 Kantar BrandZ Top 50 Globalization Brands" and improved its position in the Fortune Global 500 list to 297th, up 100 places from the previous year [2] Future Projections - Revenue projections for Xiaomi Group are estimated at 5092.95 billion RMB for 2025, 6251.70 billion RMB for 2026, and 7361.50 billion RMB for 2027 [4] - The expected adjusted net profit for the same years is 404.23 billion RMB, 525.07 billion RMB, and 652.09 billion RMB respectively [4]