Guosheng Securities maintained a "Buy" rating on XIAOMI-W (01810) with a target price of HK$52, highlighting the company's robust Q3 performance and long-term growth potential. Revenue surged 22.3% YoY to RMB113.1 billion, while adjusted net profit hit a record high of RMB11.3 billion, up 80.9% YoY. Growth was driven by the premium smartphone strategy and automotive business, with Xiaomi Auto deliveries reaching 109,000 units. The automotive and AI innovation segment achieved its first quarterly profit.

**Key Highlights:** - **Financial Performance:** XIAOMI-W reported Q3 2025 revenue of RMB113.1 billion (+22.3% YoY), with smartphones, IoT, internet services, and automotive/AI contributing RMB46 billion, RMB27.6 billion, RMB9.4 billion, and RMB29 billion, respectively. Adjusted net profit rose 80.9% YoY to RMB11.3 billion.

- **Smartphones:** Premiumization efforts progressed, with global shipments at 43.3 million units (+0.5% YoY). Xiaomi ranked among the top three globally (13.6% share) and top two in China (16.7% share). Premium models (priced RMB4,000–6,000) accounted for 24.1% of domestic sales, with the Xiaomi 17 Pro/Max series making up over 80% of shipments.

- **IoT & AIoT:** Xiaomi ranked among the top five globally in tablet shipments, second in TWS earphones, and first in wearable bands. The AIoT platform surpassed 10 billion connected devices (+20.2% YoY), while Mi Home App and Xiao AI Assistant MAUs exceeded 110 million and 150 million, respectively. The smart appliance factory, launched in October 2025, completed the industrial chain from R&D to production.

- **Automotive & AI Innovation:** Xiaomi Auto delivered 109,000 units in Q3, with the YU7 series topping China’s SUV sales in October. The segment turned profitable for the first time, generating RMB700 million in operating income.

- **Outlook & Valuation:** Despite near-term challenges like subsidy adjustments and rising material costs, Xiaomi’s leadership in premiumization and "Human x Car x Home" ecosystem positions it for long-term growth. The firm expects 2025–2027 revenue of RMB470/557/694 billion and non-GAAP net profit of RMB44/50.1/65 billion. The HK$52 target is based on 20x 2026E P/E for core electronics and 2.5x 2026E P/S for automotive/AI.

**Risks:** Intensified smartphone/EV competition, higher component costs, and slower IoT adoption.