XIAOMI(HK:01810)2026-02-11 01:55Summary of Xiaomi's Business Conference Call Industry Overview - The conference call primarily discusses Xiaomi's home appliance and technology sectors, including air conditioning, Internet of Things (IoT), smartphones, and automotive business. Key Points Home Appliances - Air Conditioning Shipment: The target for 2025 is to ship 10 million units, with an actual completion of 9.2 million units in 2025 [1] - Strategic Shift: Starting from Q4 2025, the strategy will shift to focus on profitability in the home appliance sector [1] - Air Conditioning Profit Margins: The gross margin for air conditioning was 18% last year, with a net profit margin around 2%. The goal for 2026 is to increase the gross margin to over 23% [1] IoT and Internet - IoT Revenue Structure: Black and white appliances account for 43% of revenue with an overall gross margin of 15%, while other IoT products contribute 57% of revenue with a gross margin of 35% [1] - Internet Revenue: In 2025, the internet segment generated revenue of 36 billion yuan with a net profit margin of 58% [2] Television - Global Shipment: The global shipment of televisions remains stable at 12 million units, with hardware yielding zero net profit and internet services generating profit [3] Smartphones - Profitability Levels: The breakeven gross margin for smartphones is 12%. The gross margin reported for Q3 2025 was 11%, with expectations for Q4 2025 to drop below 9%. Pressure on margins is expected to continue into Q1 2026, with some relief anticipated in Q2 2026 [3] - Shipment Volume: For Q4 2025, the expected shipment is 37 million units, with a forecast of 35 million units for Q1 2026. The annual shipment target for 2026 has been revised down from 185 million to 155 million units, following an actual shipment of 166 million units in 2025, which fell short of the 175 million target [3] Automotive Business - Order Status: As of mid-January, there are 133,000 existing orders (equivalent to 3.5 months of production capacity), with an additional 13,000 new orders (only for the Yu7 model) [4] - Production Capacity: The Beijing factory has a full production capacity of 1.2 million units, while the Wuhan factory has a capacity of 450,000 units [4] - Profit per Vehicle: The net profit per vehicle in 2025 is approximately 35,000 yuan, with investments in AI and robotics affecting apparent profitability [4] New Industry Investments - Robotics: An estimated investment of 2.5 to 3 billion yuan is planned for 2026, focusing on model development and hardware research [4] - Chip Development and OS: An annual investment of 9 billion yuan is allocated, with 13.5 billion yuan invested over four years in the Xuanjie chip [4] - Autonomous Driving: An investment of 3.5 billion yuan is planned for 2026 [4] - AI Large Models: An investment of 8 billion yuan is required for 2026 [4] Offline Channel Adjustments - Store Count Reduction: The number of stores decreased from 18,000 in mid-2025 to 14,000 by the end of 2025, with plans to further reduce to 10,000 to 12,000 stores, focusing closures on lower-tier cities [4] - Adjustment Logic: The rapid expansion of stores and low commission rates for franchisees are cited as reasons for the adjustments [5] - Major Appliance and Automotive Store Count: Currently, there are over 400 stores selling cars and 2,000 stores selling major appliances, with a cap of 4,000 stores for major appliances [5]