Core Viewpoint - Xiaomi Group has experienced significant growth in quarterly profits but faces backlash from over-marketing, resulting in a nearly 30% drop in stock price over six months [1][15]. Financial Performance - In Q3 2025, Xiaomi Group reported total revenue of 1131.21 billion yuan, marking a 22.3% year-on-year increase, and an adjusted net profit of 113.11 billion yuan, up 80.9% [4]. - The smartphone revenue decreased by 3.1% from 475 billion yuan in Q3 2024 to 460 billion yuan in Q3 2025, primarily due to a decline in average selling price (ASP) [2][4]. - The ASP for smartphones fell from 1102.2 yuan to 1062.8 yuan, a decrease of 3.6% [4]. Automotive Business - Xiaomi delivered 10.88 million new cars in Q3 2025, with a total of 260,000 cars delivered in the first three quarters [6]. - The revenue from the smart electric vehicle and AI segment reached 290 billion yuan, a remarkable 199.2% increase year-on-year, with the majority coming from electric vehicles [5][6]. - The gross profit for the smart electric vehicle segment was 73.84 billion yuan, with a gross margin increase from 17.1% to 25.5% [6]. Marketing Controversies - The launch of the 500,000th Xiaomi car was overshadowed by a court case regarding false advertising related to the Xiaomi SU7 Ultra's carbon fiber hood [1][8]. - Consumers have raised concerns about the actual functionality of the carbon fiber hood compared to its advertised features, leading to lawsuits [10][11]. - Xiaomi's legal defense claims that the CEO's statements do not constitute false advertising, as he advised against purchasing the product [11]. Market Reaction - Xiaomi's stock price has dropped approximately 28% over the past six months, resulting in a market capitalization loss of about 390 billion HKD (approximately 360 billion RMB) [1][15]. - The company has faced negative public sentiment due to multiple traffic accidents and issues in the second-hand market, leading to a decline in consumer confidence [12][13].

Core Viewpoint - Xiaomi Group has experienced significant growth in quarterly profits but faces backlash from over-marketing, resulting in a nearly 30% drop in stock price over six months [1][4]. Financial Performance - In Q3 2025, Xiaomi Group reported total revenue of 1131.21 billion yuan, a year-on-year increase of 22.3%, and an adjusted net profit of 113.11 billion yuan, up 80.9% [5]. - Smartphone revenue decreased by 3.1% from 475 billion yuan in Q3 2024 to 460 billion yuan in Q3 2025, attributed to a decline in average selling price (ASP) [5]. - The ASP for smartphones fell by 3.6% from 1102.2 yuan to 1062.8 yuan during the same period [5]. - The gross margin for smartphones was 11.7%, down 4.9 percentage points year-on-year [6]. Automotive Business - Xiaomi delivered 10.88 million new cars in Q3 2025, with a total of 260,000 cars delivered in the first three quarters [7]. - Revenue from the smart electric vehicle and AI segment reached 290 billion yuan, a 199.2% increase year-on-year, with electric vehicle revenue accounting for over 97% [6]. - The gross margin for the smart electric vehicle segment improved from 17.1% to 25.5% year-on-year [7]. Market Challenges - Xiaomi's automotive division is facing public scrutiny due to multiple traffic accidents and issues in the second-hand market, leading to a decline in consumer confidence [3][14]. - The company is involved in a legal dispute regarding false advertising related to the SU7 Ultra model, with consumers alleging that the advertised features do not match the actual product [2][10]. - The stock price of Xiaomi Group has dropped approximately 28% over the past six months, resulting in a market value loss of about 390 billion HKD (approximately 36 billion RMB) [4][17].

研究员：彭虎/贾顺鹤/温晗静/何欣怡/李澄宁/江磊 毛利率方面，3Q25 公司智能手机毛利率同比下降0.6ppt至11.1%，主因中国大陆竞争加剧。 IoT毛利率同比改善明显，互联网业务稳步增长。3Q25 IoT收入同比增长5.6%至276 亿元，其中若干生 活消费品/可穿戴/大家电收入增速分别为20.4%/22.5%/-15.7%；大家电收入下滑主因国补退坡及竞争加 剧，但ASP同比上升，此外公司智能家电工厂于10 月正式投产，我们认为有助于提升生产效率和产业 赋能。互联网业务3Q25 收入同比增长11%至94 亿元，毛利率为76.9%。 汽车交付量持续提升，单季度首次实现盈利。公司3Q25 汽车交付10.9 万台，ASP 提升至26.0 万元，主 因SU7 Ultra 与YU7 交付增加。伴随规模效应，3Q25 公司汽车及创新业务分部毛利率达25.5%，首次实 现单季度经营盈利7 亿元。展望26 年，随着产能释放和后续车型发布，我们预计汽车交付量持续增长及 利润加速释放。我们看好小米"人车家"全生态模式的长期价值。 机构：中金公司 3Q25 经调整净利润超出我们预期 公司公布3Q25 业绩：收入1,131 ...

Xiaomi (SEHK:01810) Q3 2025 Earnings Call November 18, 2025 06:30 AM ET Company ParticipantsRan Xu - General Manager of IR Department and PR DepartmentLu Weibing - Partner and PresidentAlain Lam - VP and CFOConference Call ParticipantsTimothy Zhao - AnalystYingbo Xu - AnalystAndy Meng - AnalystWenhai Chih - AnalystZoe Xu - AnalystKyna Wong - AnalystLeping Huang - AnalystOperatorWelcome to Xiaomi Group's 2025 Q3 results presentation, investors' conference call, and webcast. If there are any issues, you may h ...

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 reached RMB 113.1 billion, up 22.3% year-on-year, marking the fourth consecutive quarter exceeding RMB 100 billion [4][17] - Gross profit margin reached a record high of 22.9%, up 2.5 percentage points year-on-year [5][17] - Adjusted net profit reached RMB 11.3 billion, up 81% year-on-year, setting a new record high [5][23] Business Line Data and Key Metrics Changes - Revenue from the smartphone segment reached RMB 46 billion, accounting for 40.6% of total revenue, with global smartphone shipments at 43.25 million units, marking a 0.5% year-on-year increase [17][18] - IoT business revenue was RMB 27.6 billion, marking seven consecutive quarters of year-on-year growth, with a gross margin of 23.9% [10][19] - Revenue from the smart EV segment reached RMB 28.3 billion, with a gross profit margin of 25.5% [21][22] Market Data and Key Metrics Changes - Xiaomi ranked among the top three in global smartphone shipments with a market share of 13.6% [7][18] - In mainland China, smartphone market share increased to 14.9%, with significant growth in the premium smartphone segment [7][18] - IoT platform connected over 1 billion devices, with overseas IoT revenue reaching record highs [19][20] Company Strategy and Development Direction - The company aims to enhance premiumization, targeting the ultra-premium segment above RMB 6,000 as a new objective for the next five years [8][9] - The launch of Xiaomi HyperOS 3 aims to improve user experience and system fluidity, supporting the company's strategy to drive innovation [9][10] - The company plans to invest over RMB 200 billion in R&D over the next five years, with R&D expenses exceeding RMB 30 billion this year [14][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in ensuring stable raw material supply despite rising memory costs impacting smartphone gross margins [10][27] - The company is focused on maintaining profitability through product mix upgrades and ASP increases [10][29] - Management acknowledged the challenges posed by industry competition but emphasized the importance of innovation and product value [11][12] Other Important Information - The smart home appliance factory commenced operations, designed for a peak annual capacity of 7 million units [11][19] - The company was named to the Fortune Global 500 list for the seventh consecutive year, ranking 297th [14] - The MSCI ESG rating was upgraded from BBB to AA, marking the third consecutive year of improvement [23][24] Q&A Session Summary Question: Concerns about the impact of rising memory costs on smartphone gross margins - Management acknowledged the long cycle of cost increases for memory and its impact on gross margins, suggesting price increases and product structure optimization as solutions [27][29] Question: Strategy for EV deliveries and future development - Management highlighted the rising delivery volumes and improvements in delivery efficiency, with a focus on maintaining quality and expanding the sales network [32][33] Question: Adjustments to smartphone strategy and profitability - Management indicated that while price increases may impact the overall smartphone market, the focus remains on enhancing ASP and achieving premiumization targets [39][41] Question: Impact of subsidies on EV gross margins - Management noted that while there may be short-term impacts from subsidies, the current gross margin remains healthy, and efforts are being made to maintain delivery capabilities [42][43] Question: AIoT ecosystem and future plans - Management discussed the integration of AI with IoT devices and the commitment to maintaining an open ecosystem for future developments [46][67] Question: Expansion strategy for stores and overseas markets - Management outlined plans for store efficiency improvements and gradual expansion in overseas markets, emphasizing the complementary nature of AIoT products [82][84] Question: Operating expenses trends - Management explained that the increase in operating expenses is primarily due to R&D investments and the expansion of the retail network [85][86]

Core Viewpoint - The company has lowered its revenue and adjusted net income forecasts for Q3 2025 due to pressures in smartphone shipments, competition, and subsidy tightening, but maintains a positive outlook on mid-term growth sustainability [1]. Group 1: Smart EV Business - The elevated YU7 SUV mix is expected to improve the product mix and raise the average selling price (ASP) to RMB 260,000, with the smart EV segment projected to achieve its first profitable quarter with a GAAP net profit of RMB 700-800 million [2]. - Xiaomi's limited-time subsidy program of up to RMB 15,000 for locked orders is seen as a strategic move to align with peers amid government tax benefit reductions, although potential profit erosion from this policy is viewed as manageable [2]. Group 2: Smartphone Market - Xiaomi's global smartphone shipments reached 43.5 million units in Q3 2025, reflecting a 2% year-over-year increase, with a decline in shipments in China attributed to subsidy tightening and a lack of new products [4]. - The company has adjusted its gross profit margin (GPM) forecasts for smartphones downward by 0.3-0.6 percentage points for 2025-2027 due to anticipated upward pressure on DRAM and NAND prices [4]. - Premiumization efforts are expected to help Xiaomi manage pricing pressures, with a 30% increase in cumulative shipments of the Xiaomi 17 series compared to the previous generation, and over 80% of these shipments attributed to Pro versions [5].

Core Insights - Xiaomi's recent annual speech by Lei Jun emphasized the company's innovative journey and breakthroughs in chip and automotive sectors, marking its 15th anniversary [2][3] - The success of Xiaomi's innovations is attributed to a well-rooted methodology that combines user-centricity, technology, cost-effectiveness, efficiency, and leadership [2][21] Group 1: Reflection and Methodology - The breakthroughs in chips and automotive sectors stem from a deep internal reflection initiated five years ago, addressing critical questions about past successes and failures [3][4] - This reflection led to a strategic shift towards becoming a hard-tech company, with a commitment to invest 100 billion yuan in core technologies over five years [6][19] Group 2: Chip Business Insights - Xiaomi's chip business began with the establishment of Pinecone Electronics in 2014, but initial attempts faced challenges due to a focus on low-end products [8][9] - The rebranding of the chip initiative to "Xuanjie" in 2021 involved aligning the chip team closely with the smartphone team, fostering a shared risk and goal environment [9][11] - The successful launch of the Xuanjie chip, utilizing a 3nm process, is expected to position Xiaomi among the top players in the market [9][19] Group 3: Automotive Business Insights - Xiaomi's automotive venture, initiated in 2021, aims to create the world's strongest pure electric performance vehicle, reflecting a long-term investment philosophy [12][14] - The SU7 Ultra's development faced challenges but ultimately achieved record-breaking performance, while the YU7 model was designed based on user insights, leading to significant pre-orders [14][18] Group 4: Leadership and Organizational Evolution - Leadership and organizational capabilities are crucial for Xiaomi's success, with Lei Jun's direct involvement in the automotive sector being a key factor [36][37] - The evolution of Xiaomi's leadership structure, with new executives joining, signifies a maturation of the company's management philosophy [36][42] Group 5: Broader Industry Impact - Xiaomi's innovative methodology serves as a benchmark for the transformation of China's manufacturing industry, demonstrating that high-end products can be achieved without high prices [44][46] - The company's approach to user co-creation and efficiency optimization has implications for various sectors, providing a replicable model for other businesses [50][49]

Core Viewpoint - The article highlights the ongoing safety concerns and controversies surrounding a specific automotive brand, particularly in light of recent accidents and the subsequent public and regulatory scrutiny regarding vehicle safety standards and marketing practices [1][7]. Group 1: Recent Incidents and Public Response - A serious accident involving the SU7 Ultra occurred in Chengdu, resulting in fatalities and raising significant public concern about the vehicle's safety features [1]. - The brand has faced multiple controversies over the past 198 days, including a fatal incident in March and ongoing issues related to product quality and safety [1][3]. - Following the Chengdu accident, the company's social media presence continued to focus on promotional content rather than addressing the incident directly, leading to public backlash and a decline in followers [3][4]. Group 2: Regulatory Developments - In response to the accidents, the Chinese government has introduced stringent safety standards for electric vehicles, particularly focusing on battery safety and autonomous driving features [7][8]. - New national standards have been proposed, including requirements for battery safety that mandate no fire or explosion within two hours of thermal runaway, and regulations for door handle safety to ensure accessibility in emergencies [8][7]. - The introduction of these standards reflects a broader industry shift towards prioritizing safety in the rapidly evolving electric vehicle market [7][8]. Group 3: Company Leadership and Strategy - The company's founder, Lei Jun, has publicly acknowledged the challenges faced by the brand, describing the period following the accidents as one of the most difficult times since its inception [4][6]. - Despite the controversies, the company reported significant pre-orders for its new model, YU7, indicating a strong market interest, although the authenticity of these figures has been questioned [4][6]. - Lei Jun has emphasized the difficulties of car manufacturing and the importance of safety, yet he has not directly addressed the safety issues in his public communications [6][4].

Core Viewpoint - The article highlights the ongoing safety concerns and controversies surrounding a specific automotive brand, particularly in the context of recent accidents and regulatory changes in the electric vehicle industry [5][12][14]. Group 1: Recent Accidents and Public Response - A recent accident involving the SU7 Ultra model resulted in a fire and fatalities, occurring just hours before a social media post promoting the vehicle [3][5]. - The brand has faced significant public backlash, with social media comments criticizing the vehicle's safety features, particularly the inability to open doors during emergencies [8][9]. - The company has not issued a formal response to the latest accident, contrasting with its previous actions following an earlier incident in March [8][15]. Group 2: Safety Standards and Regulatory Changes - The recent accidents have prompted the introduction of stricter safety standards for electric vehicles, particularly concerning battery safety and automated driving systems [12][14]. - New national standards have been proposed, including requirements for the safety of battery systems and door handles, reflecting the industry's need to address safety concerns highlighted by recent incidents [13][14]. - The automotive brand's issues have coincided with the rollout of these new regulations, which aim to enhance safety measures in the rapidly evolving electric vehicle market [12][14]. Group 3: Company Leadership and Communication - The company's CEO, Lei Jun, has faced criticism for his handling of the situation, with a notable lack of direct communication regarding the safety issues and accidents [9][11]. - Despite the controversies, the company continues to promote its products, raising questions about its commitment to addressing safety concerns [5][10]. - Lei Jun has acknowledged the challenges of vehicle manufacturing but has not specifically addressed safety issues in recent public statements [11].

Core Insights - The 2025 Nanjing International Auto Show and Nanjing RV Show opened with nearly 1,000 vehicles from 58 brands, covering an area of approximately 80,000 square meters, showcasing a significant focus on new energy vehicles [1][2] Group 1: Event Overview - The auto show features a variety of promotional measures aimed at boosting consumer spending, including a vehicle renewal policy offering subsidies up to 8,000 yuan for new car purchases [1][3] - Over 80% of the vehicles on display are new energy models, reflecting a nearly 10 percentage point increase from the previous year, indicating a growing penetration of electric vehicles [1][2] Group 2: Brand Participation - BYD showcased its full brand matrix, including the debut of the Yangwang U8L and several other models, emphasizing its technological advancements [2] - Traditional luxury brands are accelerating their electrification efforts, with models like the Audi A5L and Volvo XC70 highlighting the integration of luxury and new energy technology [3] Group 3: Market Trends - In the first eight months of the year, China's automotive production and sales both exceeded 20 million units, with new energy vehicle production and sales reaching approximately 9.63 million units each [3] - The Nanjing auto show is part of a broader initiative to stimulate automotive consumption, supported by government subsidies and promotional activities [3][4] Group 4: Consumer Engagement - The event includes interactive experiences such as test drives and a lottery for fuel receipts, enhancing consumer engagement and excitement around vehicle purchases [4][6] - The introduction of free ticket registration aims to make the event more accessible, encouraging higher attendance and participation [6]