2025-08-20 04:51Summary of Xiaomi Corp 2Q25 Earnings Call Company Overview - Company: Xiaomi Corp - Industry: Technology Hardware - Market Cap: US$170,748 million - Stock Rating: Overweight - Price Target: HK$62.00 - Current Stock Price: HK$52.40 Key Financial Highlights - Adjusted Net Profit: Rmb10.831 billion, up 75.4% YoY and 1.5% QoQ, marking the highest quarterly profit in company history [1] - Total Revenue: Rmb115.956 billion, representing a 30% increase YoY and 4% QoQ [9] - Revenue Breakdown: - AIoT: Rmb38.7 billion, up 45% YoY, 18% above estimates [1] - Electric Vehicles (EV): Rmb21.3 billion, more than doubled YoY, 6% above forecast [2] - Smartphones: Rmb45.5 billion, down 2% YoY, 8% below forecast [2] - Internet Services: Rmb9.1 billion, up 10% YoY, 5% below estimates; overseas revenue reached Rmb3.0 billion, up 12.6% YoY [2] Margin Analysis - Gross Profit Margin (GPM): Improved by 1.8 percentage points YoY to 22.5%, but declined 0.3 percentage points QoQ [3] - Smartphone GPM: Declined to 11.5%, down 0.7 percentage points YoY and 0.9 percentage points QoQ [3] - AIoT GPM: Improved to 22.5%, but declined 2.7 percentage points QoQ [3] - EV GPM: Increased to 26.4%, up 3.3 percentage points QoQ [3] Future Outlook - 3Q-4Q25 Expectations: EV delivery is anticipated to be the key driver for growth, with expectations of increased delivery volumes for the YU7 model, which has a higher average selling price (ASP) and better margins [4] - Smartphone Margins: Expected to hit bottom in 3Q25, with a potential turnaround in 4Q25 [4] Additional Insights - AIoT and EV Growth: Stronger-than-expected growth in AIoT and EV segments offset the weakness in smartphone sales, leading to revenue and gross profit exceeding estimates by 2-3% [8] - Investor Sentiment: Anticipation of increased EV delivery volumes is likely to improve investor sentiment in the second half of 2025 [8] Risks and Considerations - Downside Risks: Smartphone gross margin pressure due to inventory de-stocking and weak demand, along with fierce competition in the EV market [14] This summary encapsulates the key points from Xiaomi Corp's 2Q25 earnings call, highlighting financial performance, future outlook, and potential risks.