Xiaomi will report 4Q25E results in mid-March. We estimate 4Q revenue/adj.NP growth of +5%/-8% YoY, mainly driven by smart EV/Internet biz (+119%/5% YoY), offset by softer smartphone/AIoT (-19%/-18% YoY) on higher memory price and market weakness. Looking into FY26E, while we expect memory cost pressure will weigh on smartphone market demand, we believe Xiaomi is wellpositioned to navigate industry headwinds with secured memory supply, price hikes on high-end models and de-spec on mid/low-end models. In addition, we expect IoT/internet to stay resilient and smart EV biz to remain strong with SU7 upgrade in 2Q26E and new model launch in 2H26E. Overall, we lower FY25- 27E adj. EPS by 5-15% to factor in memory cost impact and market softness. Our new SOTP-based TP of HK$50.21 implies 28x/23x FY26/27E P/E. During earnings call, we will look for mgmt’s comment on memory impact, EV outlook and emerging technology updates (AI, chips, robotics). Maintain BUY.
4Q25 preview: expect softer earnings dragged by smartphone/IoT despite resilient internet/EV biz. We estimate 4Q revenue/net profit to grow 5%/drop 8% YoY to RMB114.4bn/7.97bn in 4Q25E. 1) Smartphone (-19% YoY): Omdia reported Xiaomi’s 4Q global shipments of 37.8mn (- 11% YoY), due to higher memory cost and weakness in major regions (except China). We estimate 4Q ASP QoQ hikes thanks to strong Xiaomi 17 demand, but 4Q GPM QoQ decline of 8.3% due to memory cost and higher mix from Africa market. 2) EV (+119% YoY): For 4Q, we estimate 140k deliveries and ASP/GPM QoQ decline on mix shift. 3) IoT (-18% YoY): we expect softer domestic demand offset by overseas expansion in 4Q. 4) Internet (+5% YoY): we expect resilient revenue backed by continued MAU expansion.
2026 outlook: smartphone premiumization, EV upgrade/new model and IoT overseas expansion. 1) Smartphone: to mitigate memory impact, we believe Xiaomi can ensure memory supply from all five DRAM makers, with ASP lift in high-end models and de-spec in mid/low-end models; 2) Smart EV: we expect 620k deliveries in 2026E driven by SU7 upgrade in 2Q and new product launch in 2H; 3) IoT: resilient growth backed by domestic subsidies, overseas penetration and new-retail expansion.
Maintain BUY. We trim our FY25-27E adj. EPS by 5-15% and our new SOTP-based TP of HK$50.21 implies 28x/23x FY26/27E P/E. Upcoming catalysts include 4Q25 results, new EV launch and overseas expansion.
Valuation
Maintain BUY with new SOTP-based TP of HK$50.21 We derive our TP of HK$50.21 based on the SOTP methodology in order to reflect different growth profiles of Xiaomi’s various businesses. We assign 18x/23x/25x FY26E P/E to its smartphone/AIoT/Internet businesses (vs prior 20x/24x/25x), as we expect industry headwinds and market demand softness in smartphone and EV segments. For EV business, we assign the same 2.0x FY26E P/S. In addition, we believe our implied target multiple of 28x/23x FY26E/27E P/E is justified given Xiaomi’s global share gains in smartphone market, premiumization strategy, IoT overseas expansion, resilient internet business, and EV shipment momentum. Upcoming catalysts include 4Q25 results, new product launches, and EV capacity expansion.