Investment Rating - The report maintains a "Buy" rating for Xiaomi Group [4][7]. Core Insights - The innovative business segment is rapidly developing, with revenue from smart electric vehicles and AI reaching 21.3 billion yuan in Q2 2025, despite an operating loss of 300 million yuan. The Xiaomi YU7 series launched with over 240,000 units locked in within 18 hours, indicating strong demand [2]. - The overseas penetration of the smartphone business is increasing, with Q2 2025 smartphone revenue at 45.5 billion yuan and a gross margin of 11.5%. Global shipments reached 42.4 million units, a year-on-year increase of 0.6%, with a market share of 14.7% [2]. - IoT and lifestyle product revenue reached a record high of 38.7 billion yuan in Q2 2025, growing 44.7% year-on-year, driven by demand for smart appliances and wearable products in mainland China [3]. Financial Projections - The report forecasts adjusted EPS for 2025-2027 to be 1.80, 2.32, and 2.99 yuan, corresponding to P/E ratios of 26.82, 20.88, and 16.19 respectively [4][6]. - Revenue projections for 2025-2027 are 483.38 billion yuan, 595.47 billion yuan, and 726.58 billion yuan, with year-on-year growth rates of 32.11%, 23.19%, and 22.02% [6][13]. - The net profit attributable to the parent company is expected to grow from 40.72 billion yuan in 2025 to 67.37 billion yuan in 2027, with growth rates of 72.11% and 28.87% respectively [6][12]. Market Position - Xiaomi ranks among the top three global smartphone vendors, with significant market share increases in Southeast Asia, Europe, and Africa [2]. - The company is expected to leverage its high-end strategy and overseas expansion to drive steady growth in its smartphone business despite short-term margin pressures [2]. Strategic Outlook - The report expresses optimism regarding Xiaomi's high-end product strategy, the continuous development of AI technology and ecosystem, and the ongoing growth of its automotive business [4].

Core Insights - Xiaomi's automotive business achieved a record gross margin of 26.4% in Q2, driven by cost reductions and increased sales of high-end models [2][4] - The company reported revenue of 20.6 billion yuan from its smart electric vehicle segment, with a significant reduction in operating losses to 300 million yuan [2][4] - Xiaomi aims to achieve quarterly profitability in the second half of the year, although the timeline remains uncertain [2][4] Revenue and Profitability - In Q2, Xiaomi's revenue from the smart electric vehicle and AI innovation segment reached 21.3 billion yuan, up 14.4% from 18.6 billion yuan in Q1 [2][4] - The gross margin for the smart electric vehicle segment increased from 23.2% in Q1 to 26.4% in Q2, and from 15.4% in Q2 2024 [2][4] - The average selling price of Xiaomi's vehicles is approximately 250,000 yuan, contributing to higher gross margins [4] Product Development and Technology - Xiaomi launched the YU7 SUV series in June, achieving over 240,000 pre-orders within 18 hours [5] - The YU7 series features advanced technology, including an 800V silicon carbide high-voltage platform and a maximum range of 835 km [5] - The company is continuously updating its autonomous driving technology, with the SU7 series receiving significant performance upgrades [7] Brand Expansion and Market Strategy - Xiaomi plans to enter the European market by 2027, focusing on increasing brand awareness for its automotive division [8] - The brand has high recognition in Europe, with awareness levels exceeding 95%, particularly in countries like Spain [8] - The company is confident in building its automotive brand, drawing from its successful history in China [8] Robotics and Future Outlook - Xiaomi has invested in robotics for four to five years, particularly in humanoid robots for factory applications [9] - The company is currently working on achieving a business closure in its own factories, although it acknowledges the challenges ahead [10]

Core Insights - Xiaomi Group reported a record total revenue of 116 billion yuan for Q2 2025, representing a year-on-year growth of 30.5% [2] - The adjusted net profit reached 10.8 billion yuan, marking a significant year-on-year increase of 75.4% [2] Business Segments - The revenue from the mobile and AIoT segment was 94.7 billion yuan, showing a year-on-year growth of 14.8% [2] - The smart electric vehicle and AI innovation segment generated 21.3 billion yuan, with smart electric vehicle revenue accounting for 20.6 billion yuan and other related business revenue at 600 million yuan, both achieving record highs [2] Vehicle Deliveries and Product Launch - The company delivered 81,302 new vehicles in Q2, setting a new historical record [2] - The Xiaomi YU7 series, the company's first SUV, was launched in June 2025, featuring three configurations with starting prices of 253,500 yuan, 279,900 yuan, and 329,900 yuan, respectively [2] - The Xiaomi YU7 series received strong order demand, surpassing 240,000 units within 18 hours of its launch [2] AI Integration and New Products - The company continues to leverage AI to enhance the smart cockpit of the Xiaomi YU7 series, receiving positive feedback for features like voice control and multimodal interaction [3] - The first generation of Xiaomi AI glasses was also launched in June 2025, equipped with advanced multimodal smart interaction capabilities, including real-time translation in multiple languages [3]

Core Viewpoint - Xiaomi Group reported a record high total revenue of RMB 1160 billion in Q2, representing a year-on-year growth of 30.5%, and an adjusted net profit of RMB 108 billion, up 75.4% year-on-year, showcasing strong profitability and growth potential [1][3][12]. Financial Performance - Total revenue for Q2 reached RMB 1159.6 billion, marking a 30.5% increase compared to the previous year, surpassing the forecast of RMB 1149.4 billion [4]. - Adjusted net profit was RMB 108.3 billion, reflecting a significant year-on-year increase of 75.4%, exceeding the expected RMB 102.3 billion [5]. - Operating profit stood at RMB 134.4 billion, outperforming the forecast of RMB 104.3 billion [6]. - Gross margin improved to 22.5%, although it slightly decreased by 0.3 percentage points quarter-on-quarter [7]. - R&D expenditure reached RMB 77.6 billion, up 41.2% year-on-year, surpassing the expected RMB 71.8 billion [8]. Business Segment Performance Electric Vehicle and AI Segment - Revenue from the electric vehicle and AI segment reached RMB 213 billion, with the automotive business contributing RMB 206 billion, reflecting a staggering year-on-year growth of 233.9% [10][12]. - The number of new car deliveries was 81,302, a 197.7% increase from the previous year [12]. - The gross margin for the automotive segment was 26.4%, significantly up from 15.4% year-on-year, with operating losses narrowing to RMB 3 billion [13]. Smartphone Business - Smartphone revenue was RMB 455 billion, down 2.1% year-on-year, primarily due to a decrease in average selling price (ASP) [10][14]. - Despite a slight increase in global shipment volume to 42.4 million units, the gross margin for smartphones fell from 12.1% to 11.5% due to intensified market competition and promotional activities [10][14]. - Xiaomi's high-end smartphone strategy is showing results, with a 27.6% market share in high-end smartphones in mainland China, up 5.5 percentage points year-on-year [14]. IoT and Home Appliances - The IoT and lifestyle product segment generated RMB 387 billion in revenue, a 44.7% year-on-year increase, marking a historical high [11][15]. - Revenue from smart home appliances grew by 66.2%, with significant sales in air conditioners, refrigerators, and washing machines [15]. - The number of active users globally reached 731 million, an 8.2% increase year-on-year, with 989 million connected IoT devices, up 20.3% [15]. R&D and Innovation - R&D investment continued to increase, reaching RMB 78 billion in Q2, with the number of R&D personnel hitting a record high of 22,641 [17]. - The focus on artificial intelligence is evident, with the release of open-source multimodal models and language models, enhancing product competitiveness [17].

Core Viewpoint - Xiaomi has reported strong financial performance for Q1 2025, with multiple historical highs in revenue and profit, despite facing recent controversies related to its automotive division [1][2]. Financial Performance - Total revenue for Q1 2025 increased by 47.40% year-on-year to 111.29 billion RMB, with IoT and lifestyle products contributing significantly [2]. - Adjusted net profit for Q1 2025 reached 10.68 billion RMB, marking a 64.47% year-on-year growth [2][3]. - Overall gross margin improved by 0.54 percentage points to 22.83%, driven by higher margins in IoT and lifestyle products, despite a decline in smartphone margins [2][3]. Smartphone Business - Global smartphone shipments reached 41.8 million units, a 3.0% increase year-on-year, while the average selling price (ASP) rose by 5.8% to 1,210.6 RMB [3]. - Revenue from the smartphone segment grew by 8.89% year-on-year to 50.61 billion RMB, although gross margin declined from 14.80% to 12.41% due to rising component costs [3]. IoT and Consumer Electronics - The IoT and lifestyle products segment achieved record revenue of 32.34 billion RMB, up 58.73% year-on-year, with a gross margin increase of 5.35 percentage points to 25.22% [4]. - Smart home appliances saw significant growth, with revenue increasing by 113.8%, particularly in refrigerators and air conditioners [4]. Internet Services - Monthly active users reached a record high of 719 million globally, with a 9.2% year-on-year increase [5]. - Revenue from advertising grew by 19.7% year-on-year to 6.6 billion RMB, contributing to an expanded gross margin of 76.93% for the internet services segment [5]. Automotive Business - Xiaomi delivered 75,869 units of the Xiaomi SU7 series in Q1 2025, with an ASP of 238,300 RMB, reflecting a 1.63% increase from the previous year [8]. - The automotive segment's gross margin reached 23.17%, significantly higher than the previous year's 12.26% [8]. - Despite operational losses of 500 million RMB in the automotive division, management remains optimistic about achieving an annual delivery target of 350,000 units [11]. Market Challenges - Recent controversies surrounding the SU7 model have raised concerns about brand perception and market performance [10][12]. - The competitive landscape in the electric vehicle market is intensifying, with new pricing strategies being adopted by competitors [14].

Group 1 - The company reported a revenue of 111.29 billion RMB for the first quarter of 2025, a year-on-year increase of 47.4% [1] - Gross profit reached 25.41 billion RMB, up 50.96% year-on-year, while net profit attributable to shareholders was 10.92 billion RMB, marking a 161.22% increase [1] - The adjusted net profit for the quarter was 10.7 billion RMB, a historical high with a year-on-year growth of 64.5% [1] Group 2 - The company’s global smartphone shipments reached 41.8 million units in the first quarter of 2025, a 3.0% year-on-year increase, maintaining a top-three global ranking with a market share of 14.1% [2] - The number of active users globally reached 719 million, a 9.2% increase year-on-year, while the number of connected IoT devices grew to 944 million, up 20.1% [2] - The company delivered 75,869 units of the Xiaomi SU7 series vehicles in the first quarter of 2025 [2] Group 3 - The company invested 6.7 billion RMB in R&D during the first quarter of 2025, a 30.1% year-on-year increase, with R&D personnel reaching a record high of 21,731, accounting for 47.7% of total employees [3] - The company’s high-end smartphone sales in mainland China accounted for 25.0% of total smartphone sales, a 3.3 percentage point increase year-on-year [3] - The market share for smartphones priced at 4,000 RMB and above in mainland China reached 9.6%, up 2.9 percentage points year-on-year, with the Xiaomi 15 Ultra achieving over 90% year-on-year growth in its first month of sales compared to the Xiaomi 14 Ultra [3]