Core Viewpoint - CICC has lowered Xiaomi Group-W's (01810) adjusted net profit forecasts for 2025 and 2026 by 5.2% and 3.6% to CNY 43.757 billion and CNY 64.016 billion respectively, due to cost pressures from rising storage prices [1] Group 1: Financial Projections - CICC predicts a 68.88% year-on-year growth in adjusted net profit for Q3 2025 [2] - Expected revenue for Q3 2025 is projected to increase by 21.46% to CNY 112.357 billion, with adjusted net profit anticipated to reach CNY 10.557 billion [2] - The target price has been reduced by 15.0% to HKD 59.5, reflecting a valuation of 35.3 times and 24.1 times adjusted net profit for 2025 and 2026 respectively, indicating a potential upside of 29.6% [1] Group 2: Smartphone Business - Xiaomi's global smartphone shipments are expected to grow by 1.8% year-on-year to 43.5 million units in Q3 2025, with a slight decline in the Chinese market [2] - The average selling price (ASP) is projected to decrease slightly to CNY 1,065 due to an increase in overseas market share [2] - Smartphone revenue is expected to decline by 3.49% year-on-year to CNY 45.795 billion, with a forecasted gross margin decrease of 0.4 percentage points to 11.1% [2] Group 3: IoT and Internet Services - IoT revenue is expected to grow by 5% year-on-year to CNY 27.407 billion, with an improved gross margin of 23.5% [3] - Internet services revenue is projected to increase by 9.0% year-on-year to CNY 9.225 billion, maintaining a healthy gross margin of 75.0% [3] Group 4: Automotive Business - Q3 2025 automotive deliveries are expected to reach 109,000 units, generating revenue of CNY 29.430 billion [4] - The automotive business is anticipated to achieve its first quarterly profit of CNY 0.707 billion, driven by increased deliveries and ASP [4] - The long-term value of Xiaomi's "car-home" ecosystem is viewed positively, with expectations for continued growth in automotive deliveries and profit acceleration [4]