1、ab8 July 2025Global ResearchXiaomiTeach-in deck:Decoding Xiaomi-volume 1Answering investors most asked questionsSince our report in March,Xiaomis stock dipped by 31%amid headwinds from multiple events,before rebounding to prior levels with the successful launch of its YU7 EV.In our discussions with

2、investors,we indentified a significant gap in understanding around Xiaomis core businesses strategy beyond its EV segment-particularly its highly effective new retail model,as well as the synergies Xiaomi is achieving among its various business segments.To address this,we are rolling out a teach-in

3、series designed to systematically recap and clarify Xiaomis strategic roadmap and success metrics.This is the first instalment.(Please also see APAC Focus:Turning negative on potential down-cycle and new competition.)Risk profile looks balanced;overseas expansion is the key catalyst to watchWe maint

4、ain Neutral on Xiaomi as we think the current valuation already prices in optimism about 2026 EV deliveries and added capacity.We think the current risk/reward profile looks balanced with strong YU7 demand and profit contribution from the EV business expected in H225/2026,offset by softening smartph

5、one and AIoT demand as China consumption subsidy impacts unwind.Xiaomis overseas execution is the primary catalyst that could prompt us to turn more positive.Namely,growing high-end smartphone mix abroad and the companys plan to open 10,000 Mi Stores by 2030.If Xiaomis new retail model succeeds over

6、seas,we think it could unlock a large IoT market and potentially pave the way for EV exports from 2027.Estimate changes:lifting earnings on EV earnings turnoverWe raise our 2025/26/27E adjusted net profit by 6%/11%/4%as we:1)fine tune core business earnings by 7%/3%/3%to reflect better margins from