Xiaomi Corp. (1810.HK) Conference Call Summary Company Overview - **Company**: Xiaomi Corp. - **Ticker**: 1810.HK - **Market Cap**: HK$1.4 trillion / $173.7 billion - **Enterprise Value**: HK$1.1 trillion / $146.5 billion - **Rating**: Buy Key Financial Highlights - **2Q25 Revenue**: Grew by +30% year-over-year (yoy) to Rmb 365.9 billion, driven by: - AIoT revenue growth of +45% yoy, exceeding expectations - EV sales offsetting a decline in smartphone sales (-2% yoy) due to a -5% decline in average selling price (ASP) [1][2] - **Adjusted Net Profit**: Increased by +75% yoy, primarily due to: - Higher-than-expected profitability from EV and new initiatives, achieving a record-high gross profit margin (GPM) of 26.4% - Non-operating items contributing positively despite increased income taxes [1][2] Smartphone Segment Performance - **Smartphone Revenue**: Declined -2% yoy to Rmb 45.5 billion, with total shipments of 42.4 million (+0.6% yoy) - **Market Share**: Maintained No.3 global smartphone shipment ranking with a 14.7% market share in 2Q25 - **ASP**: Decreased -3% yoy to Rmb 1,074 due to changes in product mix [30][31] - **Regional Performance**: - China: Revenue grew +10% yoy, with a market share gain of +1.1pp to 15% - International: Market share gains in Europe, Africa, Southeast Asia, and Latin America, but losses in India and the Middle East [30][31] AIoT and Other Segments - **AIoT Revenue**: Grew +45% yoy to Rmb 38.7 billion, with GPM increasing +2.8pp to 22.5% - **Connected Devices**: Number of connected devices increased by +20% yoy to 989 million, with significant growth in users with multiple devices [50][53] - **Smart Large Home Appliances**: Revenue grew +66% yoy, with record shipments in air conditioning units, refrigerators, and washing machines [53] EV Segment Insights - **EV Sales**: Contributed positively to overall profitability, with expectations for manufacturing capacity ramp-up in the latter half of 2025 [1][17] - **Future Outlook**: Anticipated improvements in consumer demand and visibility on new capacity supply in 2026 [17] Market Performance and Valuation - **Share Price Performance**: +4% over the past 3 months, +54% year-to-date, attributed to downward revisions in smartphone revenue estimates and concerns over AIoT growth [2][3] - **Forecast Revisions**: Revenue forecasts for 2025E-2027E largely unchanged, but adjusted net profit forecasts lowered by 1-4% due to higher R&D investments and taxes [18] - **Target Price**: Adjusted to HK$65, with a 24% upside potential [18] Upcoming Catalysts - **Product Launches**: Anticipated release of the flagship Xiaomi 16 series and HyperOS 3.0 by the end of September 2025 - **EV Manufacturing Capacity**: Monitoring progress in ramp-up and new model filings [19] Conclusion - **Investment Thesis**: Despite short-term challenges, Xiaomi's long-term growth potential remains strong, particularly in AIoT and EV segments, presenting an attractive opportunity for investors to accumulate positions at current price levels [3][17]