Annual profit guidance, automobile exports, self-developed automotive chips... A comprehensive understanding of what was discussed at Xiaomi's Investor Day

On June 3rd, Xiaomi delivered a series of exciting messages during its Investor Day event.

According to the Chasing Wind Trading Desk, Deutsche Bank summarized the key highlights of Xiaomi's Investor Day in its latest research report, including strong full-year performance guidance, the profitability timeline for its automotive business, plans for overseas expansion, and progress in chip self-development.

Deutsche Bank maintains a "Buy" rating on Xiaomi, with a 12-month target price of HKD 75, indicating a potential upside of 45% from the current stock price of HKD 51.6.

Full-Year Revenue and Profit Point to High Growth

Xiaomi provided an optimistic full-year performance guidance for 2025. The company expects full-year revenue to grow by more than 30% year-on-year, with adjusted net profit under non-International Financial Reporting Standards expected to achieve over 40% year-on-year growth.

The key support for this guidance comes from the collaborative efforts of multiple business segments. According to Deutsche Bank, in the smartphone business, Xiaomi expects the average selling price (ASP) for the year to increase by 3-5% year-on-year, with gross margin maintained at 12-12.5%. The AIoT business is also performing strongly, with expected full-year revenue growth of over 30% year-on-year and gross margin expansion of 2.0-2.5 percentage points.

Electric Vehicles Expected to Reach Profitability in Q3, Full-Year Sales Likely to Exceed Expectations

The most eye-catching expectation is undoubtedly the profitability timeline for the smart electric vehicle business. Xiaomi stated that its smart electric vehicle business is expected to achieve profitability starting in the third quarter of 2025, which aligns with Deutsche Bank's previous expectations.

Deutsche Bank predicts that Xiaomi's "smart electric vehicle" business will incur a net loss of RMB 69 million in the second quarter of 2025, followed by net profits of RMB 400 million and RMB 2.63 billion in the third and fourth quarters, respectively.

Deutsche Bank believes that the improvement in Xiaomi's electric vehicle business profitability is mainly due to two factors: the release of scale effects and the optimization of product structure.

From a capacity planning perspective, Deutsche Bank expects Xiaomi's delivery volumes in the second, third, and fourth quarters of 2025 to reach 86,600 units, 100,000 units, and 137,500 units, respectively, with total annual deliveries expected to reach 400,000 units, exceeding the company's previous guidance of 350,000 units. Xiaomi plans to launch its second factory in the third quarter, which will support sales of 100,000 to 150,000 units in the second half of the year.

In terms of product matrix, the high-margin SU7 Ultra and the YU7 SUV, which will be launched in July, will gradually enhance the profitability of the product mix. Deutsche Bank expects the YU7 to contribute sales of 25,000 units and 75,000 units in the third and fourth quarters, respectively.

Based on the above factors, the bank expects the gross margin of Xiaomi's smart electric vehicle business to gradually increase from 23.2% in the first quarter to 24%, 25%, and 25.8% in the second, third, and fourth quarters, respectively, with an expected annual gross margin of 24.7%.

Xiaomi's Cars to Enter Overseas Markets in 2027

Even more ambitious is Xiaomi's globalization strategy. The company plans to start selling smart electric vehicles in overseas markets from 2027 and will significantly expand its offline retail network for this purpose. The number of Xiaomi overseas Mi store locations is expected to expand from approximately 500 in 2025 to 3,000 in 2026, reaching a scale of 10,000 stores within five years (by 2030) Deutsche Bank believes that the growth of overseas "Xiaomi Home" stores will support Xiaomi's overseas expansion in the smart electric vehicle business.

Accelerating Self-Developed Chips, Production of Automotive Semiconductor Products to Begin

In terms of technological autonomy, Xiaomi is accelerating the self-development process of automotive semiconductors. Following the release of the flagship SoC chip "Xring o1" in May, the company announced that it will soon begin production of automotive semiconductor products.

According to the ten-year plan established in 2021, Xiaomi will invest 50 billion yuan in self-developed chip development. As of February 2025, the company has cumulatively invested 13.5 billion yuan, and it is expected that the total R&D investment for the year 2025 will reach 6 billion yuan. Xiaomi emphasizes that its accumulated technological capabilities and talent reserves in flagship SoC chip development will provide strong support for the development of other chip categories, such as automotive semiconductors