Core Viewpoint - The article discusses the evolution and current state of smartwatches, highlighting their popularity and the varying levels of user engagement with their features. It emphasizes that many users only utilize a small fraction of the smartwatch's capabilities, often limiting their use to basic functions like timekeeping and calorie tracking. Group 1: Popularity and Usage - Smartwatches have become a popular category of digital products since the launch of the first Xiaomi Mi Band in 2014 and the initial smartwatches from Huawei and Apple in 2015 [1][3] - Many users report that after purchasing smartwatches, they often end up as unused products, leading to the conclusion that they can be seen as "pretty little waste" [3] Group 2: User Experience and Battery Life - A significant difference between smartwatches and traditional watches is the need for regular charging, which is a major pain point for users [5] - Battery life varies significantly among different brands, with some models offering less than 5 days of usage while others can last close to or over 10 days [12][14] - Full-featured smartwatches like the Apple Watch and Huawei Watch 5 typically have a battery life of around 4 days, while semi-smartwatches can achieve longer durations [14][17] Group 3: Functionality and Health Monitoring - Smartwatches are equipped with various health monitoring features, including heart rate variability (HRV) and electrocardiogram (ECG) capabilities, which can provide insights into users' health [32][34] - The article notes that while smartwatches can track sleep quality and provide reminders, many users do not fully utilize these features, leading to a perception of wasted potential [42][49] - The effectiveness of sleep monitoring varies, with some brands providing more detailed analysis than others, and the accuracy of these measurements is sometimes debated [44][51] Group 4: Consumer Behavior and Market Trends - The development of smartwatches is closely tied to the growing health consciousness among consumers, although there are criticisms that they may contribute to health anxiety [51][53] - Ultimately, the article suggests that while smartwatches can enhance awareness of personal health metrics, they do not replace the need for active lifestyle choices and personal responsibility in maintaining health [55]

Investment Rating - The report maintains a "Buy" rating for Xiaomi Group with a target price of HKD 53.00, indicating a potential upside of over 15% relative to the benchmark index [6]. Core Insights - Xiaomi has achieved significant milestones, including maintaining a top-three global market share in smartphones for 19 consecutive quarters, successfully launching its automotive and chip businesses, and completing its ecosystem strategy [1][3]. - The introduction of the new self-developed chips, the Xiaomi玄戒 O1 and T1, positions the company among the leading flagship chip manufacturers, enhancing its competitive edge in the market [2]. - The company is expected to see substantial revenue growth, with projected revenues of RMB 506.27 billion, RMB 605.21 billion, and RMB 700.89 billion for 2025, 2026, and 2027 respectively, alongside net profits of RMB 35.71 billion, RMB 45.78 billion, and RMB 59.89 billion for the same years [5][3]. Summary by Sections Product Launch and Achievements - Xiaomi unveiled its new玄戒 O1 and T1 chips and the YU7 SUV series during its 15th-anniversary event, showcasing a range of innovative products [1]. - The玄戒 O1 chip features advanced specifications, including a 3nm process, 19 billion transistors, and a multi-core CPU architecture, achieving over 3 million points on AnTuTu benchmark [2]. Automotive Business - The cumulative delivery of the Xiaomi SU7 series has surpassed 258,000 units, and the YU7 series is set to launch in July, featuring impressive specifications such as a range of 835 km for the standard version [3]. Financial Projections - The report forecasts significant revenue and profit growth for Xiaomi, with a projected revenue increase of 35% in 2024 and a steady growth trajectory in subsequent years [5][3]. - The expected earnings per share (EPS) are projected to rise from RMB 0.91 in 2024 to RMB 2.31 by 2027, reflecting strong profitability growth [5].

Investment Rating - The report maintains a "Buy" rating for Xiaomi Group, indicating a positive outlook for the company's stock performance in the next 12 months [6]. Core Insights - Xiaomi has achieved significant milestones, including maintaining a top-three global market share in smartphones for 19 consecutive quarters, successfully launching its automotive and chip businesses, and completing its ecosystem strategy [1][3]. - The introduction of the Xiaomi玄戒 O1 and T1 chips positions the company among the leading flagship chip manufacturers, with the O1 chip utilizing advanced 3nm technology and achieving over 3 million points in AnTuTu benchmarks [2]. - The company has delivered over 258,000 units of the SU7 series and is set to launch the YU7 series, which features impressive specifications such as a range of 835 km for the standard version [3]. Financial Projections - Revenue projections for Xiaomi are as follows: 2025 estimated revenue of 506.27 billion RMB, 2026 at 605.21 billion RMB, and 2027 at 700.89 billion RMB, reflecting growth rates of 38.4%, 19.5%, and 15.8% respectively [5]. - The net profit estimates are projected to be 35.71 billion RMB for 2025, 45.78 billion RMB for 2026, and 59.89 billion RMB for 2027, with corresponding growth rates of 50.9%, 28.2%, and 30.8% [5]. - The report anticipates a decrease in the price-to-earnings (P/E) ratio from 36 in 2025 to 21 in 2027, indicating an improving valuation as earnings grow [5]. Strategic Developments - Xiaomi's investment in research and development has exceeded 100 billion RMB over the past five years, with an additional 200 billion RMB planned for the next five years, highlighting the company's commitment to innovation [1]. - The successful integration of self-developed chips and the launch of the YU7 series are expected to enhance Xiaomi's high-end smartphone strategy and accelerate growth in its automotive business, which is viewed as a new growth curve for the company [3].

Core Viewpoint - The article highlights Xiaomi's significant advancement in chip development with the launch of its first 3nm flagship processor, "Xuanjie O1," marking it as the first in mainland China and the fourth globally to achieve this milestone, indicating a strategic shift towards self-reliance in high-end chip technology [1][4][6]. Group 1: Chip Development - Xiaomi has invested over 13.5 billion yuan in chip research and development over the past four years, with plans to invest an additional 200 billion yuan in the next five years [1][5][10]. - The "Xuanjie O1" chip integrates 19 billion transistors in a compact area of 109mm², featuring a 10-core CPU and a 16-core GPU, positioning it among the industry's top performers [4][5]. - The introduction of the "Xuanjie O1" chip is expected to reduce Xiaomi's reliance on Qualcomm, enhance AI computing capabilities, and improve cost control in the long term [6][10]. Group 2: Strategic Vision - Xiaomi's strategy includes a comprehensive "human-vehicle-home" ecosystem, with the self-developed chips playing a crucial role in this integration [6][8]. - The company aims to establish itself as a leading hard-tech firm, emphasizing the necessity of chip development as a fundamental challenge to overcome [5][6]. - Xiaomi's long-term goal is to enhance its product differentiation and competitiveness through self-developed chips, which are essential for its high-end market strategy [10]. Group 3: Market Position and Future Outlook - The launch of the "Xuanjie O1" and "Xuanjie T1" chips signifies a new phase in Xiaomi's SoC strategy, with the latter being a 4G smartwatch chip that includes Xiaomi's first 4G baseband [5][6]. - Xiaomi's revenue is projected to grow by over 30% this year, with a significant increase in high-end smartphone sales expected to reach 35% by Q4 2024 [10]. - The company has outlined a clear path for its next decade, focusing on substantial investments in core technologies to become a global leader in hard-tech [9][10].