Summary of Xiaomi Corp Conference Call Company Overview - **Company**: Xiaomi Corp (Ticker: 1810.HK) - **Industry**: Greater China Technology Hardware - **Market Cap**: US$123.685 billion - **Current Stock Price**: HK$37.70 (as of November 20, 2025) - **Price Target**: HK$62.00, representing a 64% upside potential Key Points Industry Dynamics - **Memory Cost Increase**: The company is facing rising memory costs and plans to implement multiple strategies to mitigate the impact, including: 1. Raising Average Selling Price (ASP) to pass on costs 2. Optimizing product mix to focus on high-end products less sensitive to memory costs 3. Implementing stricter cost control measures across smartphone and other business units [1][2][3] Electric Vehicle (EV) Business - **New EV Models**: The company anticipates the introduction of new EV models in 2026, with accelerated delivery and shorter lead times for existing models (SU7 Pro and Pro Max). News regarding these models is expected within the next three to six months, which could serve as a positive catalyst for the stock [2][3] AIoT Business Performance - **Growth Metrics**: Both domestic and overseas divisions of the AIoT business have shown positive year-over-year growth in Q3 2025, with overseas growth outpacing domestic growth. The trend is expected to continue into 2026, indicating a stronger growth profile for the overseas division [3] Financial Projections - **Earnings Estimates**: - FY 2025 EPS: Rmb 1.53 - FY 2026 EPS: Rmb 1.87 - FY 2027 EPS: Rmb 2.35 - **Revenue Estimates**: - FY 2025: Rmb 467.7 billion - FY 2026: Rmb 592.0 billion - FY 2027: Rmb 677.6 billion - **EBITDA Estimates**: - FY 2025: Rmb 41.8 billion - FY 2026: Rmb 58.9 billion - FY 2027: Rmb 76.7 billion [5] Risks and Considerations - **Upside Risks**: - Better-than-expected orders and customer feedback for the second EV model - Successful offline expansion in China contributing to strong volume - Increased market share in overseas markets - **Downside Risks**: - Intense competition in the EV sector in 2025 - Pressure on smartphone gross margins due to inventory destocking and weak demand - Concerns regarding smart EV investments potentially exerting pressure [10] Analyst Ratings - **Current Rating**: Overweight - **Analyst**: Morgan Stanley - **Industry View**: In-Line [5][10] Additional Information - **52-Week Stock Price Range**: HK$26.80 - HK$61.45 - **Average Daily Trading Value**: US$1.259 million - **Shares Outstanding**: 25,501 million [5] This summary encapsulates the critical insights from the conference call, highlighting Xiaomi Corp's strategies, performance metrics, and market outlook.

Xiaomi Corp. (1810.HK) Earnings Call Summary Company Overview - **Company**: Xiaomi Corp. (1810.HK) - **Market Cap**: HK$1.1 trillion / $136.0 billion - **Enterprise Value**: HK$859.5 billion / $110.6 billion - **12-Month Target Price**: HK$53.50, current price HK$40.78, implying 31.2% upside potential [1][4][7] Key Financial Highlights - **3Q25 Revenue**: Grew by 22% year-over-year (yoy) to Rmb46.0 billion, exceeding expectations [1][28] - **Adjusted Net Profit**: Increased by 81% yoy, driven by higher AIoT gross profit margin (GPM) and investment gains [1] - **Smartphone Revenue**: Declined by 3% yoy, with total shipments of 43.3 million units [28] - **AIoT Revenue**: Grew by 6% yoy to Rmb27.6 billion, with GPM increasing by 3.2pp yoy to 23.9% [47] Core Themes from Management 1. **Smartphones**: - Focus on increasing average selling price (ASP) and market share in 2026 despite rising memory costs and declining industry shipments [2] - GPM forecasted at 10.1% for 4Q25 and 8.8% for 2026 [18][37] - Market share in China increased to 14.9% in 3Q25 [28] 2. **AIoT**: - Prioritizing profitability over growth, with overseas revenue expected to drive growth [2] - Connected devices reached over 1 billion, with a 20% yoy increase [47] 3. **Electric Vehicles (EV)**: - Achieved an IFRS net profit of Rmb0.7 billion in 3Q25, with a full-year delivery target of 350,000 units [2] - Increased shipment forecast to over 400,000 units in 2025 [19] 4. **Artificial Intelligence (AI)**: - Released multiple multi-modal large language models (MLLMs) to enhance smart home capabilities [2] 5. **New Retail Strategy**: - Focus on operational efficiency and store optimization in China, with continued expansion of Mi Home stores overseas [2] Financial Forecasts - **Revenue Forecasts**: 2025E revenue expected at Rmb365.9 billion, with slight adjustments for 2026E and 2027E [3][16] - **Net Profit Forecasts**: Adjusted down by 4-5% for 2026E-27E due to smartphone GPM pressure [3] - **EPS Growth**: Expected to grow from Rmb1.07 in 2025E to Rmb2.23 in 2027E [16] Valuation Insights - **Valuation Metrics**: - P/E ratio projected at 16.6x for 2024, increasing to 23.3x in 2025E [13] - Free cash flow yield expected to decline from 7.2% in 2024 to 2.1% in 2026E [13] - **SOTP Valuation**: Target price of HK$53.5 based on sum-of-the-parts analysis, with significant contributions from smartphones, AIoT, and EV segments [20] Risks and Considerations - **Market Conditions**: Potential challenges from rising memory costs and competitive pressures in the smartphone market [18][37] - **AIoT Growth**: Domestic sales pressure noted during Singles' Day, with expectations for growth primarily from overseas markets [19] - **EV Segment**: Continued focus on new models and manufacturing capacity to meet growing demand [19] Conclusion - **Investment Recommendation**: Maintain a "Buy" rating with a favorable risk-reward outlook for investors, despite potential near-term challenges [19][20]

Group 1: Market Outlook - Global investors are returning to explore bottom-up stock opportunities after 4-5 years of being on the sidelines, indicating a shift in foreign investor behavior [2][18] - India's valuations remain elevated, particularly in the autos, consumption, and industrial sectors, but pressure is easing as global markets correct and corporate earnings stabilize [2][18] - The Nifty's latest quarter showed 8-10% PAT growth, but margins remain soft; markets are expected to break out of consolidation only if earnings shift toward higher double-digit growth [6][18] Group 2: Sector Analysis - UBS remains positive on the BFSI sector, recommending a stock-specific approach rather than a PSU versus private lens; both private and PSU banks are seen as strong, with growth differentiation being key [8][18] - In the consumption sector, segments like jewellery and quick commerce are attractive, while some FMCG and auto names appear stretched [10][18] - The power and energy profit pool expansion is underestimated, with private corporate capex steady as a share of GDP, although a repeat of the 2003-07 boom is not expected [11][18] Group 3: Emerging Trends - Quick commerce is viewed as a high-growth area, with improving unit economics and faster dark-store expansion even in smaller markets [13][18] - Traditional auto manufacturers with limited EV exposure may underperform, and caution is advised in this sector [14][18] - India is not yet part of the global AI boom due to a lack of large capex-heavy AI infrastructure players; focus should be on how IT services adapt and which sectors adopt AI fastest [15][18] Group 4: IPO Market - Global investors are cautious but not worried about the exuberance in India's IPO market, viewing it as a small slice of their exposure; participation in IPOs does not significantly impact core investment strategies [16][18] - Despite global uncertainties and high valuations, India's narrative remains strong and diversified, with a bottom-up market approach being more appealing than a concentrated top-down strategy [16][18]

Core Insights - The breakthrough of "large capacity HEV mass production" has revitalized hybrid technology (HEV), which had been overshadowed by PHEV and pure electric vehicles, making it a key focus in the automotive industry [2] - The gradual reduction of the new energy vehicle purchase tax starting in 2026 and the deepening of equal rights for oil and electricity are reshaping the automotive market landscape, positioning HEV as a competitive option due to its advantages [3][4] Policy Impact - From January 1, 2026, the new energy vehicle purchase tax will shift from exemption to a 50% reduction, with a maximum deduction of 15,000 yuan per vehicle, raising the technical threshold for PHEV [3] - Local governments are increasingly supportive of HEV, with cities like Guangzhou including HEV in the "energy-saving vehicle directory," providing equal exemptions as new energy vehicles, enhancing their market appeal [4] Technological Advancements - Continuous improvements in battery technology and hybrid systems have addressed previous limitations of HEV, such as short electric range and efficiency issues [6] - Predictions indicate that by 2030, HEV battery capacity could increase from 1-2 kWh to 5-8 kWh, with electric range potentially reaching 50-80 km [6] Market Dynamics - The revival of the HEV market is prompting significant strategic adjustments among automakers, with a focus on differentiated solutions for various regions and consumer needs [8] - The cost of HEV powertrains has decreased by 60% since 2018 due to localized production, narrowing the price gap with traditional fuel vehicles to within 15,000 yuan, making HEVs more accessible to mainstream consumers [9] Future Outlook - The revival of HEV is seen as a rational response to the energy transition in the automotive industry, catering to diverse consumer needs without requiring significant changes in user habits [11] - It is projected that HEV sales in China could exceed 2 million units by 2027, capturing a stable market share in the 100,000 to 200,000 yuan family car segment [9]

Core Viewpoint - Hyundai and Kia experienced a decline in sales for certain electric vehicle (EV) models in October, following a surge in demand during September [1] Group 1 - Hyundai and Kia reported a drop in sales for specific EV models in October [1] - The sales decline in October comes after a significant increase in demand for these models in September [1]

Core Insights - Proactive provides fast, accessible, and actionable business and finance news content to a global investment audience [2] - The company focuses on medium and small-cap markets while also covering blue-chip companies and broader investment stories [3] - Proactive's news team delivers insights across various sectors including biotech, mining, oil and gas, and emerging technologies [3] Technology Adoption - Proactive is committed to adopting technology to enhance workflows and content production [4] - The company utilizes automation and software tools, including generative AI, while ensuring all content is edited and authored by humans [5]

Market Overview - The market is currently experiencing a consolidation phase with a rotation towards defensive sectors, following a recent pullback and resistance around the 6750 level [2][5][6] - The 10-year yield has recently broken below 4%, but there are concerns about potential upward movement which could impact equity markets [3][4] Tesla Earnings Report - Tesla reported mixed results, missing earnings expectations with adjusted earnings per share at $0.50 compared to the expected $0.54, while revenue exceeded expectations at $28.1 billion, a 12% year-over-year increase [9][10] - Automotive revenue increased by 6% year-over-year, but net income fell by 37% year-over-year, indicating cost pressures and competition in China [10][12] - Energy generation and storage revenue rose significantly by 44% year-over-year, now accounting for approximately 25% of total revenue [11] - Future growth is anticipated in areas such as robo-taxis and humanoid robots, with analysts raising price targets for Tesla post-earnings [13][14] IBM Earnings Report - IBM's earnings report showed better-than-expected results, with adjusted earnings per share at $2.65 against an expectation of $2.45, and revenue at $16.33 billion, surpassing the $16 billion forecast [16][17] - The company experienced a 9% year-over-year revenue growth, driven by demand for artificial intelligence products and services [17][18] - However, there are concerns regarding deceleration in the Red Hat Enterprise segment, which has been a significant expense for IBM [18] Crude Oil Market - Crude oil prices have risen by 5%, with West Texas Intermediate above $61 per barrel, influenced by U.S. sanctions on major Russian oil companies [19][21] - Factors contributing to the price increase include a short covering squeeze and potential tightening of global supplies [20][21] - The market is cautious as OPEC may respond to price increases by adjusting production quotas, which could have bearish implications [22]

Core Viewpoint - The automaker GM expects tariff costs to be lower than previously anticipated and is benefiting from increased prices while its decision to reduce EV production is projected to yield positive results next year [1] Group 1 - GM does not foresee tariff costs to be as high as earlier estimates [1] - The company is experiencing advantages from higher pricing strategies [1] - GM's strategy to cut EV production is expected to be beneficial in the upcoming year [1]

Group 1 - Tesla is expected to report a significant year-over-year decline in third-quarter earnings despite record electric vehicle deliveries due to the expiration of U.S. tax credits [1] - Analyst consensus predicts Tesla's third-quarter earnings per share (EPS) to fall by 24% to 55 cents compared to 72 cents in Q3 2024 [1] - Revenue for Tesla is anticipated to increase by approximately 4.6% in the same quarter [1] Group 2 - Upcoming earnings reports from Tesla, Netflix, and GE Vernova are being closely monitored by analysts [2]

Core Insights - Proactive provides fast, accessible, and informative business and finance news content to a global investment audience [2] - The company focuses on medium and small-cap markets while also covering blue-chip companies and broader investment stories [3] - Proactive's news team delivers insights across various sectors including biotech, pharma, mining, natural resources, battery metals, oil and gas, crypto, and emerging technologies [3] Technology Adoption - Proactive is committed to adopting technology to enhance its content creation and workflow processes [4] - The company utilizes automation and software tools, including generative AI, while ensuring all content is edited and authored by humans [5]