+852-2978-7347 | xinyu.ruan@gs.com Goldman Sachs (Asia) L.L.C. Carol Chen +852-2978-7999 | carol.chen@gs.com Goldman Sachs (Asia) L.L.C. 24 November 2025 | 4:53PM HKT Equity Research Miniso (MNSO): NDR takeaways: solid SSSG; mix dragged US GPM but operating leverage supports margin improvement; Buy We hosted Miniso's CFO Mr. Eason Zhang and Director of Capital Markets Christina Zhu for a virtual NDR on Nov 24 post its 3Q25 result. Key takeaways include: 1) Miniso China SSSG momentum has been holding up well ...

Core Insights - Honor has officially launched the MagicOS 10 system, which is the world's first AI operating system with self-evolution capabilities, marking a significant technological leap from traditional operating systems to AI OS [1][5] - The CEO of Honor emphasized that a true AI OS must achieve a value transition centered around human needs, integrating user experience with ecosystem collaboration [1][5] Group 1: Five-Dimensional Evolution - MagicOS 10 introduces a "Five-Dimensional Evolution" path that addresses traditional OS ecosystem fragmentation by enhancing model capabilities, system kernel, collaborative boundaries, service efficiency, and multi-modal interaction [2][5] - The AI agent YOYO, powered by Honor's MagicGUI model, can autonomously predict user needs and execute tasks across over 3000 scenarios, transforming from a tool to a partner in user experience [2][3] Group 2: Proactive Services - YOYO offers proactive services by analyzing user behavior to anticipate needs, supporting over 200 proactive service scenarios, such as ticket reminders and navigation prompts [3] - During the Golden Week, over 13 million Honor users interacted with YOYO, showcasing its capabilities in travel planning and information retrieval [3] Group 3: Ecosystem Interconnectivity - MagicOS 10 breaks down barriers between data, devices, and services, enabling seamless communication across iOS, HarmonyOS, Android, and Windows platforms [4] - The system supports unique features like "one-touch screen sharing" with all brand smart TVs and collaborates with over 140 automotive brands for smart connectivity [4] Group 4: System Aesthetics and Security - MagicOS 10 introduces a "zero-gravity transparent design" for enhanced visual aesthetics while maintaining low power consumption [4] - The AI call fraud prevention feature utilizes large model recognition to protect users from scams, enhancing security during calls [4] Group 5: Continuous Evolution through Collaboration - Honor's strategy involves collaboration with users, industries, and developers to create a self-evolving ecosystem, collecting over 30,000 user suggestions for continuous feature iterations [6][7] - The "Honor Far Sailing Plan" aims to incentivize developers and foster innovation, with over 350,000 developers from more than 100 countries joining the ecosystem [7] Group 6: Industry Collaboration - Honor collaborates with industry partners like Alibaba and BYD to enhance smart services in navigation, tourism, and smart home applications, integrating AI technology into daily life [6][7] - The focus on an open ecosystem rather than zero-sum competition signifies a shift towards collaborative innovation in the AI terminal market [7]

Core Insights - The launch of MagicOS 10 marks a significant evolution towards a "partner era" in smart operating systems, featuring AI security technology, the YOYO assistant, and cross-brand connectivity [3][4][8] Security Upgrade - The AI face-swap detection technology has been recognized by Time magazine as a "best invention," addressing asymmetric attack and defense issues, providing comprehensive protection against scams [4] - The system can identify AI-generated voices during scam calls, enhancing user safety through a dual protection mechanism developed since 2022 [4] AI Optimization - YOYO has evolved from a tool to a life assistant, supporting over 3,000 automated scenarios with an accuracy rate exceeding 95%, capable of executing up to 14 complex tasks [5] - The technology relies on a three-tier system, integrating visual models, multi-sensory perception, and partnerships to create a service ecosystem while ensuring user data privacy [5] Experience Improvement - The introduction of the "Hummingbird architecture" addresses user complaints about system lag, featuring three engines for real-time adjustments and faster response times [7] - A new "zero-gravity transparent design" enhances aesthetic appeal without increasing power consumption, improving the overall user experience [7] Ecosystem Expansion - The "one-touch" feature allows users to sync information across different brands, breaking down barriers between devices, and enabling seamless sharing of files and data [8] - This technology supports collaboration with iOS, HarmonyOS, and Windows, facilitating cross-brand interactions [8] User Participation - The company actively collects user feedback through various channels, resulting in over 30 implemented suggestions to enhance system usability [9] - The approach aims to align the system more closely with user needs, promoting a collaborative development process [9] Future Plans - Future developments include a new phone model and further advancements in MagicOS 11, focusing on a "de-interface" concept to enhance user experience [10] - The improvements in MagicOS 10 reflect a commitment to making technology serve user experience, exploring the ideal form of smart systems [10]

Core Insights - The conference highlighted the launch of MagicOS 10, which is the world's first AI intelligent operating system with self-evolution capabilities [1][2] - CEO Li Jian emphasized the importance of a human-centered value leap for a true AI OS, focusing on collaboration with users, industries, and developers [1] Group 1: MagicOS 10 Features - MagicOS 10 represents a qualitative leap from traditional operating systems to AI operating systems through a five-dimensional system evolution [2] - The intelligent agent YOYO, based on Honor's Magic Model 3.0, has three core capabilities: "seeing, remembering, and executing," transitioning from a passive tool to an active partner [2] - The system enables seamless cross-device connectivity, breaking down barriers between data, devices, and services, and achieving deep interconnectivity with major systems like iOS, HarmonyOS, Android, and Windows [2] Group 2: Industry Collaboration - Honor is expanding its partnership landscape, collaborating with various sectors including internet, telecommunications, large models, intelligent agents, and smart travel [2] - Notable collaborations include working with Alibaba on large models and intelligent service ecosystems, and exploring smart integration solutions with BYD in the context of smart terminals and new energy vehicles [2]

Core Insights - AI is reshaping the terminal ecosystem, with smart agents being viewed as the next "super entry point" following operating systems [2][4] - Honor has invested over 10 billion yuan in AI research and development, indicating a strong commitment to AI technology [2] - A strategic partnership between Honor and BYD has been established to integrate AI smart agents into the automotive sector, marking a shift from functional connectivity to ecological integration [2][3] Group 1: Company Developments - Honor announced the upgrade of its interconnection platform to "HONOR AI Connect," launching AI solutions covering eight major scenarios, including "smart vehicle connectivity" [3] - The collaboration with BYD aims to create a seamless smart experience in transportation, focusing on technology co-research and ecosystem building [2][3] - Honor's CEO emphasized that the partnership represents a comprehensive strategic collaboration in the AI era, with smart mobility as a key focus [2] Group 2: Industry Trends - The automotive industry is evolving from traditional transportation to becoming a "mobile smart terminal," with AI applications becoming increasingly significant [3] - Major smartphone manufacturers are replicating their AI and operating system capabilities in vehicles, indicating a trend of "getting on the car" [3] - The competition is shifting from single-point technology to ecosystem-level battles, as the integration of AI smart agents enhances user interaction and service provision [4]

Core Insights - The article discusses the evolving landscape of AI in the smartphone industry, particularly focusing on the shift from large model parameters to practical applications in China, contrasting with the U.S. approach led by companies like OpenAI and NVIDIA [2][12] - Chinese smartphone manufacturers are prioritizing practical AI applications over competing in model parameter rankings, emphasizing cost-effectiveness and usability [2][10] Group 1: AI Development Strategies - Chinese companies are moving away from the "burning money" strategy of developing large AI models, recognizing the high costs associated with such investments [2][10] - The focus is shifting towards smaller models that can be effectively integrated into specific applications, enhancing user experience and operational efficiency [2][12] Group 2: Practical Applications of AI - Companies like Honor are showcasing AI capabilities that allow smartphones to predict user actions and streamline interactions, significantly improving user experience [3][6] - AI is being integrated into various high-frequency scenarios, such as real-time flight updates and automated purchasing, demonstrating its practical utility [6][10] Group 3: Challenges in AI Implementation - The smartphone industry faces challenges related to power consumption, computational demands, and cost pressures, which have hindered significant sales growth despite AI advancements [9][10] - The need for additional investments in specialized hardware, such as NPU chips, increases costs and impacts profit margins for smartphone manufacturers [10][12] Group 4: Future Trends and Market Potential - The number of AI-supported scenarios in smartphones is rapidly increasing, with companies reporting significant growth in the capabilities of their AI systems [12] - By 2029, it is projected that 57% of smartphones will support generative AI, indicating a growing trend towards AI integration in high-end devices, with Chinese brands playing a crucial role in this shift [12][13]

Core Viewpoint - The article discusses the evolving landscape of AI in the smartphone industry, highlighting the shift from large-scale model competition to practical applications and cost-effective solutions among Chinese manufacturers, contrasting with the strategies of leading US companies like OpenAI and NVIDIA [3][4]. Group 1: AI Development Strategies - Chinese smartphone manufacturers are moving away from competing on large model parameters and are focusing on deploying smaller models that enhance practical applications [3][4]. - The cost of developing large AI models is prohibitively high, with estimates suggesting that creating models with 400 billion parameters could require investments of up to 50 billion yuan, including significant ongoing electricity costs [13][14]. Group 2: Practical Applications of AI - Companies like Honor are showcasing AI capabilities that allow smartphones to predict user actions and streamline interactions, significantly improving user experience [6][9]. - Vivo and OPPO are also exploring AI applications, with Vivo's AI capable of processing long contexts and OPPO focusing on AI memory capabilities to help users manage information overload [10][12]. Group 3: Challenges in AI Implementation - The smartphone industry faces challenges such as power consumption, computational demands, and cost pressures, which have hindered significant sales growth despite AI advancements [11][13]. - The need for additional hardware, such as independent NPU chips, increases costs by 15%-20%, further complicating the profitability of AI integration in smartphones [13]. Group 4: Future Trends and Market Potential - The number of AI-supported scenarios in smartphones is rapidly increasing, with Honor reporting a growth from 200 to 3000 scenarios in just three months, indicating a strong trend towards AI integration [16][17]. - By 2029, it is projected that 57% of smartphones will support generative AI, with Chinese brands playing a crucial role in this transition [17].

Core Insights - The article discusses the shift in the Chinese AI market from competing on large model parameters to focusing on practical applications and smaller models, emphasizing cost-effectiveness and usability [1][11] - Chinese smartphone manufacturers are increasingly integrating AI capabilities into their devices, enhancing user experience through features like proactive assistance and improved interaction methods [2][5][10] Group 1: Industry Trends - Chinese companies are moving away from the costly race to build massive AI models, recognizing the unsustainable nature of such investments [1] - The focus has shifted to developing smaller, more efficient models that can be applied in real-world scenarios, allowing for faster deployment and better user experience [1][11] - The introduction of DeepSeek's open-source model has leveled the playing field, enabling smaller models to achieve comparable AI capabilities [8] Group 2: Technological Advancements - AI integration in smartphones is advancing, with features that allow for one-click operations and proactive suggestions based on user behavior [2][5] - Companies like Honor and Vivo are reporting significant increases in the number of AI-supported scenarios, indicating rapid growth in AI application [9] - The development of AI capabilities is not only about enhancing performance but also about optimizing hardware efficiency and user interaction [5][6] Group 3: Challenges and Considerations - Despite advancements, the industry faces challenges related to power consumption, computational demands, and cost pressures, which have hindered significant sales growth in smartphones [7][8] - The need for additional investments in specialized hardware, such as NPU chips, poses a risk to profit margins for smartphone manufacturers [8] - The industry is recognizing that merely increasing computational power is not a viable long-term strategy; practical application and user experience are becoming the primary focus [8][11]

Core Insights - The article discusses the launch of the Honor Magic8 series, featuring the AI intelligent agent YOYO, which aims to enhance user experience by providing personalized and automated shopping assistance [1][2] - Honor emphasizes the importance of continuous evolution of AI technology, allowing it to grow alongside users and adapt to their needs [2][3] - The company is positioning itself as a leader in the AI smartphone market, with projections indicating significant growth in AI smartphone shipments in China by 2025 [2] Group 1: AI Technology and User Experience - Honor's CEO, Li Jian, highlights that the Magic8 series, powered by MagicOS 10, offers a new lifestyle driven by AI, covering over 3000 scenarios for user convenience [1][2] - YOYO is designed to evolve through user interaction, with features being defined collaboratively through initiatives like the "YOYO Wish Pool" [2][3] - The focus is on enhancing user experience rather than just technical specifications, with user feedback being crucial for AI's intelligence [3] Group 2: Product Features and Innovations - The Honor Magic8 Pro features a 200MP ultra-night telephoto camera with advanced stabilization capabilities, showcasing significant improvements in imaging technology [5][6] - The entire Magic8 series is equipped with the fifth-generation Snapdragon 8 processor, offering substantial performance enhancements across CPU, GPU, and AI capabilities [5][6] - Honor aims to maintain a strong commitment to user experience, ensuring that the Magic series consistently meets consumer expectations [6] Group 3: Future Developments and Vision - Honor is exploring the evolution of AI devices, envisioning a transition from smartphones to AI Phones and eventually to Robot Phones [6][8] - The upcoming Honor ROBOT PHONE, set to debut in 2026, aims to integrate AI, robotics, and imaging capabilities, enhancing user interaction with technology [8][9] - The Honor Alpha global flagship store serves as a platform for consumers to experience AI technology in daily life, reinforcing the company's commitment to innovation and user engagement [9]

Core Viewpoint - The Honor Magic8 series introduces significant upgrades in product design, configuration, and user experience while maintaining similar pricing to the previous year [2] Group 1: AI Features - YOYO remains a core highlight, now achieving L3 excellence certification from the China Academy of Information and Communications Technology, enabling it to understand user intent and respond flexibly to various scenarios [3][5] - New AI capabilities include one-click coupon shopping, food recommendations via video calls, travel guidance, calorie tracking, and research report generation for students and professionals [6][10][12] Group 2: Imaging Advancements - The Honor Magic8 Pro features a triple-camera setup with a 50MP main sensor, 50MP ultra-wide, and a 200MP periscope lens, while the standard Magic8 has a 50MP main, 50MP ultra-wide, and 64MP periscope lens [21][22] - AI enhancements improve long-distance, night scene, portrait, and stage portrait photography, with the Pro model offering superior clarity and stabilization [24][26] - The series introduces industry-first color tracking technology and various AI-driven photo editing features [26][28] Group 3: Hardware Specifications - Both models feature a sleek design with narrow bezels and high-quality displays, including a 6.58-inch OLED for Magic8 and a 6.71-inch curved display for Magic8 Pro [29][31] - The series is powered by the Snapdragon 8 Gen 2 processor, with impressive performance metrics and gaming enhancements [38] - Battery capacities are 7000mAh for Magic8 and 7200mAh for Pro, with fast charging capabilities [38] Group 4: Pricing and Availability - The Honor Magic8 is priced from 4499 yuan to 5499 yuan, while the Magic8 Pro ranges from 5699 yuan to 6699 yuan, both available from October 23 [41][43] Group 5: Future Developments - Honor teased a new "ROBOT Phone" set to be unveiled next year in Barcelona, indicating ongoing innovation [45]