Core Viewpoint - Xiaomi Group reported a record high revenue of 116 billion RMB for Q2 2025, marking a 30.5% year-on-year increase, and an adjusted net profit of 10.8 billion RMB, up 75.4% year-on-year, indicating strong financial performance and growth potential in key business segments [1][2]. Financial Performance - Revenue for Q2 2025 reached 115,956.1 million RMB, a 30.5% increase from 88,887.8 million RMB in Q2 2024, and a 4.2% increase from 111,293.3 million RMB in Q1 2025 [2]. - Gross profit was 26,101.0 million RMB, up 41.9% year-on-year, and operating profit increased by 128.2% to 13,436.7 million RMB [2]. - Adjusted net profit for the quarter was 10,830.7 million RMB, reflecting a 75.4% increase compared to 6,175.4 million RMB in the same period last year [2]. Business Segments - The smartphone segment generated 455 million RMB in revenue with a shipment of 42.4 million units, showing a slight increase from 42.2 million units year-on-year [3]. - IoT and lifestyle products revenue reached 387 million RMB, a 44.7% increase, with smart home appliances seeing a significant growth of 66.2% [3]. - The automotive and innovative business segment reported revenue of 213 million RMB, a remarkable 234% increase, with 81,302 units delivered in the quarter [3]. Strategic Focus - Xiaomi is focusing on a dual strategy of scaling and high-end positioning in the smartphone market, shifting its focus from the 4000-6000 RMB range to the ultra-high-end segment above 6000 RMB [3][4]. - The company aims to expand its retail presence, targeting 30,000 stores in China and 400-500 overseas by the end of the year [4]. - Xiaomi's goal is to join the "2 billion club" alongside Apple and Samsung within the next three to five years, emphasizing its commitment to growth despite a stagnant global market [4][5]. R&D and Innovation - R&D investment reached a record high of 7.8 billion RMB in Q2 2025, a 41.2% increase, with an annual target of 30 billion RMB [6]. - Key technological advancements are focused on automotive, chips, and AI, including the development of a prototype car and a self-developed 3nm flagship chip [6]. - The company believes that having self-developed chips will create a significant competitive advantage in the future [6].

Group 1 - The core objective for the company in the Chinese market this year is to achieve a breakthrough from high-end to ultra-high-end products [1] - The first-month sales of the Xiaomi 15 Ultra increased by 70% to 80% year-on-year, helping the company’s smartphones successfully reach price points above 6000 yuan [1] - The Xiaomi SU7 Ultra, launched only four months ago, has achieved cumulative sales of over 10,000 units, ranking first in both sales of electric vehicles priced above 500,000 yuan in the first half of 2025 [1] Group 2 - In the domestic market, for every three electric vehicles sold priced above 500,000 yuan, one is a Xiaomi SU7 Ultra [1]

Core Viewpoint - The article discusses the emerging trend of eSIM technology in the smartphone industry, highlighting the efforts of major manufacturers like Huawei and Apple to adopt this technology, as well as the regulatory and operational challenges that may affect its implementation in mobile devices [2][4][16]. Group 1: eSIM Technology Overview - Huawei is set to launch a new foldable smartphone that supports eSIM, potentially becoming the first commercially available eSIM smartphone in China [2][7]. - OPPO plans to release its first batch of eSIM-enabled smartphones by the end of this year [3][8]. - eSIM technology allows for the embedding of SIM cards directly into device chips, eliminating the need for physical SIM cards and saving internal space in devices [3][4]. Group 2: Industry Adoption and Trends - Apple has been a pioneer in eSIM technology, having submitted a patent for it in 2011 and first implementing it in the iPad Air 2 [5]. - The upcoming iPhone 17 Air is expected to feature a design that eliminates the physical SIM card slot entirely [6]. - Other manufacturers, including Xiaomi, have also begun to adopt eSIM technology, with Xiaomi launching its first eSIM-enabled device in overseas markets earlier this year [8]. Group 3: Regulatory Environment and Challenges - The eSIM business was previously suspended in 2023 due to security risks, but major Chinese telecom operators like China Mobile and China Unicom have resumed eSIM services, primarily targeting IoT and wearable devices [4][12][14]. - Analysts indicate that the future of eSIM in smartphones will largely depend on regulatory policies and the willingness of telecom operators to support this technology [16]. - The increase in global eSIM service availability is significant, with the number of countries offering eSIM services rising from 24 in 2018 to an expected 123 by mid-2024 [9]. Group 4: Market Projections - GSMA predicts that by the end of 2025, there will be approximately 1 billion eSIM-enabled smartphones globally, with this number expected to grow to 6.9 billion by 2030, representing three-quarters of all smartphone connections [10].

Core Viewpoint - The article emphasizes the importance of "hidden configurations" in flagship smartphones, which significantly impact user experience, despite being less publicized during product launches [1][3]. Group 1: Vibration Motor Performance - Xiaomi 15 Ultra uses ESA 0809B motor, which is decent but lacks top-tier performance in vibration feedback, leading to a subpar typing experience [7]. - OPPO Find X8 Ultra features the CSA 0916 Turbo motor, recognized as a top-tier option, providing excellent vibration feedback and responsiveness, making it stand out in user experience [9]. - Vivo X200 Ultra opts for a different motor, the Dongguan East Magnetic 9593, which offers acceptable response speed but falls short in vibration strength compared to OPPO [11]. Group 2: Speaker Quality - Xiaomi 15 Ultra combines the AAC 1014E and Goer 1115D speakers, enhanced with N'BASS acoustic materials, resulting in solid hardware specifications [13]. - OPPO Find X8 Ultra utilizes AAC 1012 and AAC 1115E, aiming for balanced sound quality [13]. - Vivo X200 Ultra boasts the largest speaker configuration with AAC 1210D and Goer 1511P, but the sound lacks fullness and depth due to insufficient tuning [16]. Group 3: Microphone Configuration - Both Xiaomi and OPPO include four microphones for superior multi-channel recording capabilities [18]. - Vivo X200 Ultra has reduced its microphone count from four to three, which contradicts its focus on video recording capabilities [18]. Group 4: Display Performance - All three models support 2K resolution and 120Hz refresh rate, but differ in brightness: Xiaomi 15 Ultra at 700 nits, OPPO Find X8 Ultra at 780 nits, and Vivo X200 Ultra at 825 nits [19]. - Vivo X200 Ultra excels in peak brightness at 1818 nits, significantly outperforming the others [21]. - Vivo X200 Ultra employs advanced high-frequency PWM dimming across all brightness levels, enhancing eye comfort [22]. Group 5: Touch Sampling Rate - Xiaomi 15 Ultra and Vivo X200 Ultra achieve around 300Hz touch sampling rate, ensuring smooth user experience [24]. - OPPO Find X8 Ultra claims 240Hz but measures only 125Hz in practice, indicating a performance shortfall [24]. Group 6: Communication Capabilities - Vivo X200 Ultra supports the most 5G bands at 25, followed by Xiaomi 15 Ultra with 23, and OPPO Find X8 Ultra with 18 [25]. - Xiaomi 15 Ultra offers comprehensive satellite communication support, enhancing user safety during outdoor activities [25]. - Xiaomi 15 Ultra features the highest USB interface specifications, facilitating faster data transfer for professional users [27]. Group 7: Overall Summary - Xiaomi 15 Ultra excels in communication and interface specifications but has average motor and display performance [28]. - OPPO Find X8 Ultra is distinguished by its superior vibration motor and user experience but has limitations in communication capabilities [28]. - Vivo X200 Ultra leads in display technology but suffers from audio tuning issues and reduced microphone count [30].

Core Viewpoint - The evolution of smartphone camera technology is shifting from multi-camera setups to fewer cameras, with a focus on maintaining image quality, particularly in portrait photography. This trend is observed in flagship models from brands like Xiaomi and Samsung, which are moving from four-camera to three-camera designs while addressing the need for a dedicated portrait focal length [5][10][19]. Group 1: Impact of Xiaomi CC9 Pro - The Xiaomi CC9 Pro was a significant model as it was the first to feature a 100-megapixel camera and achieved the highest score on DXOMARK for photography [1]. - Subsequent models like Xiaomi 10 Ultra and Xiaomi 12S Ultra retained a dedicated "medium focal length" for portrait photography, influencing the design of flagship models from competitors like Samsung and OPPO [3]. Group 2: Shift from Four Cameras to Three - By mid-2025, multiple brands, including Xiaomi, are planning to transition from four-camera to three-camera designs, often eliminating the dedicated "medium focal length" camera [5][12]. - The removal of the independent macro camera in favor of using ultra-wide or telephoto lenses is seen as an improvement, but the necessity of the medium focal length for portrait photography remains a concern [5][19]. Group 3: Technical Considerations - The Xiaomi 15 Ultra utilizes a dedicated "medium focal length" based on the IMX858 sensor, which is crucial for portrait photography, as cropping from larger sensors can lead to reduced image quality [7][9]. - The effective light-sensitive area of sensors plays a critical role in image quality, and the design choices made by manufacturers will impact the performance of portrait photography [9][18]. Group 4: Alternative Solutions - Xiaomi's potential solution involves a "multi-group periscope" design that uses two periscope telephoto lenses sharing a high-resolution sensor, aiming to cover medium to long focal lengths while improving image quality [12][14]. - Samsung is expected to upgrade its camera system to include a 1-inch, 200-megapixel sensor for the main wide-angle camera, which may help address the shortcomings of its current medium focal length sensor [16][18]. Group 5: Market Implications - The transition to three-camera systems in flagship models is seen as a positive development for image quality, but non-flagship models adopting similar designs may be viewed as cost-cutting measures rather than genuine improvements [21][23]. - The industry is advised to differentiate between flagship and non-flagship models when implementing these design changes, as the latter may not benefit from the same technological advancements [21][23].

Core Viewpoint - A significant market battle worth billions is unfolding, highlighted by a recent meeting between Nvidia's CEO Jensen Huang and Xiaomi's CEO Lei Jun, marking a notable shift in the tech landscape over the past 12 years [1][4]. Group 1: Nvidia's Strategy in China - Nvidia's frequent visits to China in 2025 indicate a strategic focus on the Chinese market, especially after facing a $13.5 billion revenue loss due to U.S. export restrictions [5][4]. - The approval of H20 chip exports to China is a crucial development for Nvidia, allowing the company to resume sales and mitigate losses [5][4]. - Nvidia's new RTX Pro GPU is designed for AI applications and complies with U.S. export regulations, showcasing the company's adaptability [5][4]. Group 2: Transition from Hardware to AI Infrastructure - Nvidia is evolving from a hardware supplier to a provider of AI infrastructure, as evidenced by the introduction of the NVLink Fusion architecture, which enhances system design flexibility for cloud service providers [7][4]. - Huang's statement that "China has sufficient computing power" reflects Nvidia's shift towards becoming an ecosystem builder rather than a technology monopolist [7][4]. Group 3: AI Factories and Robotics - Nvidia's strategy includes establishing AI factories in China, which are expected to redefine data centers by focusing on AI computation rather than traditional data storage [11][4]. - The Chinese manufacturing sector, which accounts for about 30% of global manufacturing value, presents a significant opportunity for Nvidia's AI factory strategy [12][4]. Group 4: Humanoid Robots as a Future Industry - Huang identifies humanoid robots as a potential trillion-dollar industry, with China playing a critical role in commercialization due to lower manufacturing costs and strong supply chain capabilities [14][4]. - The Chinese government's support for humanoid robots as a disruptive technology further enhances the business environment for Nvidia [16][4]. Group 5: Strategic Partnership Between Nvidia and Xiaomi - The historical relationship between Nvidia and Xiaomi, marked by mutual respect and understanding, lays a foundation for future collaboration, especially in light of current geopolitical challenges [22][4]. - Both companies have transformed from hardware manufacturers to ecosystem builders, creating a complementary relationship that benefits both parties [22][4]. - Nvidia's collaboration with Xiaomi is seen as a pragmatic approach to balance political risks and commercial interests in the evolving tech landscape [22][4].

Group 1 - Xiaomi's collaboration with Leica has been crucial for its success in the high-end smartphone camera market, but there are rumors that this partnership may end soon [1][2][4] - The next generation of Xiaomi's flagship models is expected to feature a new self-developed camera technology instead of Leica [2][4] - Xiaomi's CEO Lei Jun has confirmed that the partnership with Leica has been renewed, and deeper collaboration is anticipated for upcoming flagship models [6][20] Group 2 - To commemorate Leica's 100th anniversary, Xiaomi has created a special edition of the Xiaomi 15 Ultra, featuring a design that mimics the wear and tear of Leica cameras over time [12][16] - The special edition includes a gift box with a photo album showcasing 32 selected award-winning images from Xiaomi-Leica photography competitions [14] - The upcoming Redmi K90 series is unlikely to feature Leica branding but may adopt a similar stylistic approach to imaging, with significant improvements expected in camera specifications [20][21]

Group 1 - Goldman Sachs reported that Xiaomi Group-W (01810) achieved a gross merchandise volume (GMV) of 35.5 billion RMB during the 618 shopping festival, representing a year-on-year growth of 35%, and 11% higher than the GMV during the 2024 Double Eleven event [1] - The GMV data aligns with Goldman Sachs' expectations, equating to 71% of the firm's forecast for Xiaomi's Q2 2025 revenue from smartphones and AIoT in China, which is projected to grow by 31% year-on-year [1] - The 618 and Double Eleven promotions are expected to account for 69% and 66% of the quarterly revenue in China for Q2 and Q4 2024, respectively [1] Group 2 - On the JD platform, Xiaomi ranked first in both sales and GMV among domestic smartphone brands, holding four of the top ten best-selling models during the 618 promotion [2] - Xiaomi's flagship series did not make the top ten this year due to increased competition from the discounted iPhone 14, but the Xiaomi 15 Ultra entered the top ten in the ultra-high-end segment [2] - The average discount level for Xiaomi products during the 618 period was approximately 19%, consistent with the previous year, and could reach up to 33% when considering national subsidies [2]

Core Insights - Xiaomi achieved a record-breaking total payment amount of over 35.5 billion yuan during the 2025 618 shopping festival, marking a new high [1] Group 1: Sales Performance - Xiaomi's flagship models dominated sales across various price segments, with the Xiaomi 15 Ultra leading in the 6000-8000 yuan range and the Xiaomi 15 securing the top spot in the 4000-5999 yuan range [2] - The REDMI K80 maintained its strong performance, winning the sales championship in the 2000-2999 yuan segment across multiple platforms [2] - Other models like REDMI K80 Pro, REDMI Turbo 4 Pro, REDMI Note 14 Pro, REDMI Note 13 5G, and REDMI 14C also achieved top sales positions in their respective price brackets [2] Group 2: Ecosystem and Product Categories - Xiaomi's success during the 618 festival was attributed to its "people, vehicles, and home ecosystem," which demonstrated strong momentum and significant synergy [3] - In various product categories, Xiaomi secured 158 first-place rankings, including in monitors, smart speakers, water purifiers, humidifiers, and dishwashers [3] - The Xiaomi Pad 7 Ultra led in the high-end tablet segment, while the Xiaomi Band 9 Pro and REDMI Watch 5 topped the sales charts in their respective wearable categories [3] Group 3: Service Upgrades - Xiaomi's service offerings saw significant enhancements, with a 38% year-on-year increase in on-site installation services and a 192% growth in integrated delivery and installation services [3] - The range of services expanded to 12 categories, and the number of stores supporting IP68 protection increased to 500 [3]

Investment Rating - The report assigns an "Accumulate" rating to Xiaomi Group [1][9]. Core Insights - Xiaomi's FY25Q1 revenue reached 111.3 billion RMB, marking a 47.7% year-on-year increase, with adjusted net profit surpassing 10.7 billion RMB, a 64.5% growth [3][7]. - The company has launched its self-developed 3nm mobile SoC chip, Xuanjie O1, and plans to invest 200 billion RMB in R&D over the next five years [7][9]. - Xiaomi's smartphone revenue in FY25Q1 was 50.6 billion RMB, up 8.9% year-on-year, regaining the top market share in mainland China at 18.8% [7][9]. Financial Summary - Revenue projections for FY2025E-FY2027E are adjusted to 483.5 billion, 602.3 billion, and 715.9 billion RMB respectively, with adjusted net profit forecasts of 42.2 billion, 55.2 billion, and 68.6 billion RMB [3][9]. - The company reported a gross profit of 25.4 billion RMB in FY25Q1, with a gross profit margin of 22.8% [10]. - The adjusted PE ratio for FY2025 is projected at 28.7, reflecting a premium valuation due to Xiaomi's hardware synergy and AI positioning [9][14].