Xiaomi hosted its flagship product launch event yesterday, debuting the newgen SU7 EV and introducing three new MiMo-V2 models (Pro/Omni/TTS). We view the new-gen SU7's feature upgrade and enhanced battery range as highly competitive in the premium EV segment, continuing the strong momentum from its previous generation, and the launch of the new MiMo-V2 models underscores Xiaomi's commitment to embedding AI seamlessly across its devices, reinforcing its "Human x Car x Home" ecosystem. In addition, mgmt. reiterated Xiaomi’s AI R&D investments of over RMB60bn in next three years, and we believe Xiaomi's premiumization progress in smart EVs and strengthened AI ecosystem will bolster its LT margin outlook. Overall, we adjust our earnings estimates to reflect higher AI investments and recent industry headwinds. Our new SOTP-based TP is HK$47.16, implying 28.8x FY26E P/E. Reiterate BUY.
New-gen SU7: competitive positioning with spec upgrades; expect premium share gains to continue. Xiaomi positioned the new-gen SU7 as a benchmark in the premium EV market (with starting price of RMB219.9k) featuring an upgraded 800V silicon carbide high-voltage platform for ultrafast charging and extended range (up to 902 km). Equipped with next-gen LiDAR and computing chips (Snapdragon 8 Gen-3, NVIDIA DRIVE AGX Thor), the new SU7 significantly outperforms its predecessor in urban NOA capabilities. We expect it will gain strong traction and further enhance Xiaomi's brand equity and margin mix in the EV segment.
MiMo-V2 LLM models: AI empowerment and ecosystem integration. The models are segmented into three tiers: 1) MiMo-V2-Pro: Xiaomi’s flagship foundation model for real-world agentic workload (1T+ parameters, 42B active parameters, 1mn context window). 2) MiMo-V2-Omni: Xiaomi’s omni foundation model uniting frontier multimodal understanding (image, video, audio) with strong agent capabilities. 3) MiMo-V2-TTS: Xiaomi’s large-scale voice synthesis model that targets natural, controllable speech generation. Overall, we believe the introduction of the three MiMo-V2 models can enhance Xiaomi's “Human x Car x Home” ecosystem, which is positive to its long-term growth and earnings visibility.
Maintain BUY. We trim our FY25-27E EPS by 6-13% for higher AI investments and near-term industry headwinds, and our new SOTP-based TP of HK$47.16 implies 28.8x FY26E P/E. Upcoming catalysts include 4Q25 results, new SU7 orders and overseas expansion.
Valuation
Maintain BUY with new SOTP-based TP of HK$47.16
We derive our TP of HK$47.16 based on the SOTP methodology in order to reflect different growth profiles of Xiaomi’s various businesses. We assign the same 18x/23x/25x FY26E P/E to its smartphone/AIoT/Internet businesses, as we expect industry headwinds and market demand softness in smartphone and EV segment. For EV business, we assign the same 2.0x FY26E P/S. In addition, we believe our implied target multiple of 28.8x FY26E P/E is justified given 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.