Core Viewpoint - Xiaomi Group achieved record high revenue and profit in Q2 2025, with total revenue reaching 116 billion yuan, a year-on-year increase of 30.5%, and adjusted net profit of 10.8 billion yuan, up 75.4% [2] Business Segments - The "Mobile × AIoT" segment generated revenue of 94.7 billion yuan in Q2 2025, marking a historical high with a year-on-year growth of 14.8% [5] - Xiaomi's smartphone shipments reached 42.4 million units in Q2 2025, reflecting a 0.6% year-on-year increase, maintaining a position among the top three global smartphone vendors with a market share of 14.7% [6] - The number of active users on Xiaomi's ecosystem reached a record high of 731.2 million globally, growing 8.2% year-on-year, while the number of connected IoT devices (excluding smartphones, tablets, and laptops) increased to 989.1 million, up 20.3% [6] - Xiaomi added over 1,700 new retail stores in mainland China, bringing the total to over 17,000, and approximately 200 new retail stores overseas [6] Innovative Business Revenue - Revenue from smart electric vehicles and AI-related innovative businesses reached 21.3 billion yuan in Q2 2025, a significant increase of 233.9% from 6.4 billion yuan in Q2 2024 [8] - Smart electric vehicle revenue rose to 20.6 billion yuan, up 230.3% from 6.2 billion yuan in the previous year, driven by increased delivery volumes and average selling prices (ASP) [8] - The number of electric vehicles delivered surged to 81,302 units, a 197.7% increase from 27,307 units in Q2 2024, attributed to successful capacity enhancements [8] - The ASP for smart electric vehicles increased by 10.9% to 253,700 yuan per vehicle, primarily due to the delivery of higher ASP models like the Xiaomi SU7 Ultra [8] - Other related business revenues grew to 600 million yuan, up 411.1% from 200 million yuan, driven by increases in after-sales services, automotive financial services, and parts sales [8] High-End Strategy - In Q2 2025, Xiaomi ranked first in smartphone sales in mainland China, with high-end smartphone sales accounting for 27.6% of total smartphone sales, an increase of 5.5 percentage points year-on-year [9] - Xiaomi's market share in the 4,000-5,000 yuan price segment reached 24.7%, up 4.5 percentage points year-on-year, while the market share in the 5,000-6,000 yuan segment increased by 6.5 percentage points to 15.4% [9]

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Core Viewpoint - Nvidia's CEO Jensen Huang emphasizes the importance of the Chinese market and expresses a commitment to continued collaboration with China during his visit to Beijing [2]. Group 1: Jensen Huang's Visit and Activities - Jensen Huang was photographed with Xiaomi's CEO Lei Jun in Beijing, highlighting their ongoing relationship and collaboration [1]. - Huang's visit coincides with the 3rd China International Supply Chain Promotion Expo, where Nvidia will showcase its new products and reaffirm its long-term commitment to the Chinese market [1][2]. - This marks Huang's third visit to China this year, indicating a strong focus on the Chinese market [1]. Group 2: Nvidia's Market Performance - Nvidia recently achieved a market capitalization of over $4 trillion, becoming the first company to reach this milestone [3]. - The company's stock price has increased by 22% this year, resulting in an estimated valuation increase of approximately $700 billion [3].

Vehicle Performance Benchmark - Xiaomi SU7 Ultra achieved a Nürburgring lap time of 6:22.091, ranking it as the 3rd fastest car [1] - The Nordschleife circuit, known for its comprehensive testing environment, is 20.832 km long with 177 corners and a 304-meter elevation change [1] - Performance on the Nürburgring serves as a benchmark for vehicle capability across aerodynamics, power delivery, handling, and thermal management [2] Product & Pricing - Limited edition Xiaomi SU7 Ultra starts at 113,500 USD [1] Strategic Rationale - Xiaomi chose the Nürburgring to demonstrate the automotive engineering capabilities of its vehicles [1]

Group 1 - Wang Ning, the founder of Pop Mart, has become the new richest person in Henan with a net worth of 203 billion USD, surpassing Qin Yinglin of Muyuan Foods, whose net worth is 163 billion USD [1] - Pop Mart's market value reached 328.8 billion HKD (approximately 301.2 billion RMB) as of June 6, 2023, driven by the popularity of its Labubu products [1] - Wang Ning holds a 48.73% stake in Pop Mart, translating to a holding value of approximately 146.7 billion RMB [1] Group 2 - BYD's General Manager of Brand and Public Relations, Li Yunfei, addressed recent controversies regarding "atmospheric pressure fuel tanks" and "car circle Evergrande," asserting compliance with regulations and clarifying financial stability [3] - Li Yunfei mentioned that the company switched to high-pressure fuel tanks following customer feedback about engine startup experiences [3] Group 3 - Atour Group apologized for a recent incident involving pillowcases at its Hangzhou hotel, confirming that the issue was an isolated case due to a supplier error [4] - The hotel has ceased operations for comprehensive rectification, and all 4,440 pieces of bedding will be replaced [4] Group 4 - Xiaohongshu's valuation has reportedly risen to 35 billion USD, with no shareholders willing to sell their stakes [8] - The valuation reflects a significant increase from an internal document that indicated a valuation of 26 billion USD earlier in the year [8] Group 5 - NIO announced that multiple individuals have been detained for spreading false rumors about the company, including claims of acquisition and misinformation about its operations [8] - The company expressed gratitude towards law enforcement for their efforts in combating online rumors [8] Group 6 - Chery announced the launch of the new "Starry Edition" of its Exeed Yaoguang C-DM hybrid SUV, priced at 218,800 RMB [20] - The vehicle features a closed front face and a sleek design with a floating roof effect [20] Group 7 - The rapid payment system interconnection project between mainland China and Hong Kong is progressing smoothly, with some services expected to launch soon [24][25] - This initiative aims to facilitate real-time cross-border remittances and enhance trade and personnel exchanges between the two regions [25]

Core Insights - Polyphony Digital has announced a partnership with Xiaomi to feature the Xiaomi SU7 Ultra in the game Gran Turismo 7, marking the first appearance of a Chinese car in the series [1] Company Developments - The collaboration between Polyphony Digital and Xiaomi highlights the growing integration of automotive brands into the gaming industry, particularly in racing games [1] - The inclusion of the Xiaomi SU7 Ultra in Gran Turismo 7 signifies a strategic move for Xiaomi to enhance its brand visibility in the gaming community [1] Industry Trends - The partnership reflects a broader trend of video game developers collaborating with automotive manufacturers to create immersive experiences that blend gaming and real-world automotive technology [1] - This development may influence other gaming companies to seek similar partnerships with automotive brands, potentially leading to increased competition and innovation in both industries [1]

Core Insights - Xiaomi has become the world's third-largest phone maker and is now entering the electric vehicle market, launching the YU7 crossover, which is seen as a potential competitor to Tesla's Model Y [1] - The YU7 is anticipated to significantly impact Model Y sales in China, with comparisons drawn to luxury brands like Ferrari [2] - Xiaomi's previous vehicle, the SU7, has been compared to the Porsche Taycan and has shown strong performance on the Nurburgring racetrack [3] Market Challenges - Xiaomi faces challenges following a fatal crash involving its vehicle, leading to increased scrutiny from the Chinese government on self-driving vehicle marketing and testing [3] - Analysts emphasize the importance of monitoring Xiaomi's sales over the next year to assess the impact of safety perceptions on consumer confidence [4] - The competitive landscape in China's EV market is described as brutal, necessitating Xiaomi to expand its product portfolio and seek international growth to avoid intense domestic competition [5]

Investment Ratings - The report assigns an Overweight (OW) rating to Xiaomi, Will Semiconductor, and Accton Technology, indicating a positive outlook for these companies [1][2]. Core Insights - Xiaomi's launch of the SU7 Ultra marks the beginning of its luxury car journey, with the upcoming launch of its second electric vehicle, YU7, expected to be a significant positive catalyst in 2025. The price target for Xiaomi is raised to HK$62 [1]. - Will Semiconductor is identified as a key beneficiary in the AI glasses supply chain, with an upgrade to Overweight due to anticipated rapid shipment growth [2]. - Accton Technology reported solid earnings for Q1 2025, with expectations of impressive revenue and operating profit growth of 68% and 73%, respectively, for 2025. The price target is raised to NT$850 [2]. Summary by Sections Performance Summary - As of May 6, 2025, there are 1,341 investment ideas with a cumulative outperformance of 6,724 basis points against local benchmarks. The average holding period total return is 2.9%, while the average 12-month total return is -2.8% [3]. - The hit ratio for positive returns stands at 53%, indicating that more than half of the ideas have generated positive returns [3]. Market Insights - The report highlights that Hong Kong and China account for the most ideas in the region, followed by Japan. India shows the best holding period relative return at 2.1%, while Korea has the lowest at 0.6% [25][22]. - Taiwan has a hit ratio of 52.7% for positive relative returns, while Korea's hit ratio is the lowest at 44.7% [25][23].

Investment Rating - The investment rating for BYD is "Buy" with a target price of HK$688, implying a 32x/22x 2025E/26E PER [15] - The investment rating for CATL is "Buy" with a target price of Rmb362/share, implying a 24.5x 25E P/E and 19.4x 26E P/E [19] Core Insights - In March 2025, China EV battery installation reached 61.4 GWh, marking a 54% month-over-month and 56% year-over-year increase, with total installations for 1Q25 at 148.9 GWh, also up 54% YoY [1][2] - CATL's market share remained stable at 43% in 1Q25, while BYD's market share increased by 2 percentage points to 29% [2] - Lithium Iron Phosphate (LFP) batteries continued to dominate the market with a 79% share in 1Q25, up 17 percentage points from 62% in 1Q24 [2][5] Summary by Sections Market Dynamics - CATL is shifting towards the low-end market due to the rise of A-class passenger vehicles, which accounted for approximately 41% of battery installations in 1Q25, up from 25% in 2024 [8] - The combined market share of A-class and B-class vehicles rose to 66% in 1Q25, compared to 61% in 2024 [8] Company Performance - Xiaomi's battery demand surged to 6.67 GWh in 1Q25, with the SU7 model contributing over 2 GWh monthly since its launch in March 2024, while Huawei's battery installation volume fell by about 40% YoY to 2.2 GWh [12] - CATL's product mix saw A-class and B-class vehicles account for 50% of its offerings in 1Q25, compared to 29% in 1Q24 [8] Valuation Metrics - BYD's target price is derived using a PEG ratio of 1.0x based on a projected 32% NP CAGR from 2025 to 2027 [15][17] - CATL's valuation is based on a 15.0x 2025E EV/EBITDA, reflecting its historical average minus 0.25 standard deviation since listing [19]

Core Viewpoint - Xiaomi Group has shown significant growth in its 2024 annual performance, with revenue reaching 365.9 billion and a net profit of 23.58 billion, indicating a year-on-year growth of 35% and 34.9% respectively. The company has successfully delivered 137,000 electric vehicles, exceeding its initial target of 100,000 [1]. Group 1: Revenue Structure - The "Mobile x AIoT" segment generated revenue of 333.2 billion in 2024, reflecting a year-on-year growth of 22.9% [3]. - Xiaomi's smartphone revenue rebounded to 191.8 billion in 2024, with a slight increase in average selling price (ASP) to 1,138.2 yuan, marking a historical high [4]. - The IoT and lifestyle products segment surpassed 100 billion in revenue for the first time in 2024, achieving a year-on-year growth of 30% [6]. - Internet services revenue reached 34.1 billion in 2024, growing by 13.3% year-on-year [7]. - The global monthly active users (MAUs) exceeded 700 million in December 2024, a 9.5% increase year-on-year [8]. Group 2: Profit Structure - Internet services emerged as the most profitable segment for Xiaomi, with a total gross profit of 89.7 billion from 2021 to 2024, surpassing the gross profit from smartphones, which totaled 87.1 billion [9]. - In 2024, the gross profit from smartphones was 24.3 billion with a gross margin of 12.6%, while IoT products contributed 21.1 billion with a gross margin of 20.3% [10]. - The gross margin for smartphones improved from 13.1% in 2021 to over 20% in 2024, indicating a successful shift towards higher-end products [11]. Group 3: Market Positioning - Xiaomi is often labeled as a "hardware company," with smartphones and IoT products accounting for 80% of its revenue, which affects its valuation in the market [12]. - The IoT product range includes over 9 billion devices across more than 260 categories, indicating a broad market presence [13]. - Xiaomi's retail strategy includes a significant expansion of its offline stores, aiming to reach 15,000 by the end of 2024 and 20,000 by 2025 [14]. Group 4: New Ventures - The electric vehicle segment, including the Xiaomi SU7 series, has shown promising growth, with a gross profit of 44,000 yuan per vehicle by Q4 2024 [17][18]. - Despite the high costs associated with entering the automotive market, Xiaomi has managed to maintain a stable gross margin and control expenses effectively [20][22]. - The company aims to deliver 350,000 vehicles in 2025, with expectations of increasing gross profit per vehicle to 50,000 yuan [23]. Group 5: Strategic Outlook - Xiaomi's entry into the electric vehicle market positions it alongside major tech giants, potentially elevating its status within the competitive landscape of Chinese internet technology companies [29]. - The company is focused on expanding its ecosystem beyond smartphones, which is crucial for long-term growth and market competitiveness [25][28].