2025-11-20 02:16Xiaomi Corp. (1810.HK) Earnings Call Summary Company Overview - Company: Xiaomi Corp. (1810.HK) - Market Cap: HK$1.1 trillion / $136.0 billion - Enterprise Value: HK$859.5 billion / $110.6 billion - 12-Month Target Price: HK$53.50, current price HK$40.78, implying 31.2% upside potential [1][4][7] Key Financial Highlights - 3Q25 Revenue: Grew by 22% year-over-year (yoy) to Rmb46.0 billion, exceeding expectations [1][2] - Adjusted Net Profit: Increased by 81% yoy, driven by higher AIoT gross profit margin (GPM) and investment gains [1][2] - Smartphone Revenue: Declined by 3% yoy, with total shipments of 43.3 million units [28] - AIoT Revenue: Grew by 6% yoy to Rmb27.6 billion, with GPM increasing by 3.2pp yoy to 23.9% [47] Core Themes from Management 1. Smartphones: Focus on increasing average selling price (ASP) and market share in 2026 amidst rising memory costs and declining industry shipments [2][3] 2. AIoT: Prioritizing profitability over growth, with overseas AIoT revenue expected to drive growth after reaching record levels in 3Q25 [2] 3. Electric Vehicles (EV): Achieved an IFRS net profit of Rmb0.7 billion in 3Q25, on track to meet full-year delivery target of 350,000 units [2] 4. Artificial Intelligence (AI): Released multiple multi-modal large language models (MLLMs) to enhance smart home positioning [2] 5. New Retail Strategy: Focus on operational efficiency and store optimization in China while expanding Mi Home stores overseas [2] Forecast Changes - Revenue Forecasts: 2025E revenue remains unchanged at Rmb365.9 billion, with net profit for 2025E raised by 3% post 3Q beat [3] - Net Profit Projections: 2026E-27E net profit lowered by 4-5% due to increased smartphone GPM pressure [3][18] Market Position and Competitive Landscape - Smartphone Market Share: Maintained No.3 global ranking with 13.6% market share in 3Q25, despite a slight decline [28] - Regional Performance: - China: +7% yoy revenue growth, with market share increasing to 14.9% [28] - Overseas: Market share gains in Latin America, Southeast Asia, Africa, and Europe, but a decline in India [28] Valuation Insights - Valuation Scenarios: - Bull Case: HK$63.9 per share (57% upside) - Base Case: HK$53.5 per share (31% upside) - Bear Case: HK$37.0 per share (-9% downside) [20][21] - 12-Month Target Price: Updated to HK$53.5, reflecting favorable risk-reward for investors [19][20] Additional Insights - AIoT Connectivity: Over 1 billion active connected devices, with a 20% yoy increase in connected devices [47] - New Retail Expansion: Added 1,000 Mi Stores in China, totaling 18,000, and expanded to 300 stores overseas [28] - Smartphone GPM: Expected to decline to 10.1% in 4Q25E due to rising memory costs [37] Conclusion Xiaomi Corp. is navigating a challenging market landscape with strategic focuses on profitability, innovation, and expansion across its product lines. The company shows potential for growth in AIoT and EV segments, while maintaining a competitive position in the smartphone market. The updated valuation reflects a positive outlook, although short-term challenges may persist.