China Securities Co., Ltd. has given a "buy" rating to Xiaomi-W (01810), sustained improvement in the 17 series structure and high-end development.

China Securities Co., Ltd. released a research report stating that it is expected that the revenue of XIAOMI-W (01810) in 2025/2026 will be 473.9/606.6 billion yuan (yoy +30%/+28%), with adjusted net profit of 43.3/54.4 billion yuan (yoy +59%/+25%), and a target price of 58.8 Hong Kong dollars, with a "buy" rating. At present, Xiaomi's valuation price ratio is already reflected, looking at 2026 at the year-end point, next year's automobile will greatly release profits, and the current stock price corresponds to a cost-effective overall PE ratio for 26 years; on the other hand, automobile production capacity release + new product warming up + public opinion coming out of the trough is expected to provide support. The bank expects the company's Q3 revenue to reach 110.1 billion, yoy +19%, the adjusted net profit exceeds 10 billion, reaching 10.1 billion, yoy +62%, and the automobile sector will achieve profitability in the season. On the mobile phone side, the increase in storage prices has led to a decline in gross profit margin, but the trend of high-end phones continues to strengthen. According to IDC data, in the 3Q25, Xiaomi's global smartphone shipments were about 43.5 million units, a year-on-year increase of 1.8%, with a global market share of 13.5%, basically flat year-on-year. The bank predicts that the ASP of smartphones in 3Q will slightly decrease month-on-month, mainly due to changes in the proportion of overseas and domestic product structures, and the mobile phone gross profit margin will decline slightly to 11% month-on-month under pressure from storage price, with Q4 expected to remain flat month-on-month. The high-end strategy continues to be promoted, with sales of the 17 series expected to exceed the 15 series throughout the entire lifecycle, and the product structure significantly improved (Pro/Promax ratio exceeding 80%, ProMax ratio exceeding 45%). In terms of IoT, under the influence of high base numbers, reduced government subsidies, and increased competition, it is slightly under pressure, with expected year-on-year revenue growth of +5%, both in China and internationally. Gross profit margin remains strong month-on-month increase (not significantly involved in price wars). Internet business continues to maintain steady growth. On the automotive side, it is expected to achieve profitability for the first time in Q3. Delivery volume reached 109,000 units, with ASP increasing month-on-month (due to more YU7 deliveries), and gross profit margin slightly decreased to 25%+ month-on-month (mainly due to the lower proportion of Ultra). In terms of deliveries, delivery volume exceeded 40,000 units in September, and is expected to continue to increase in October, with a faster pace of capacity ramp-up than last year's su7. On the other hand, next year's capacity will be greatly improved, and at the current point in time, the automotive business will quickly switch to the valuation of 2026, with capacity in 26 not being the main contradiction, but more focused on new models + going global.