Understanding the Market | Xiaomi Corporation-W fell over 3%, with a cumulative decline of 25% in stock price over the past month. Institutions expect its Q3 smartphone gross margin to be under pressure
Xiaomi Corporation-W's stock price fell over 3%, with a cumulative decline of 25% in the past month, currently reported at HKD 44.42. Due to the rise in storage chip prices, the gross margin for smartphones in Q3 is expected to slightly decline to 11%. Although sales of the high-end Xiaomi 17 series increased by 30%, overall performance may be slightly below expectations, mainly due to lower-than-expected gross margins for smartphones and Internet of Things revenue. Citigroup expects adjusted net profit to be RMB 10.2 billion, a year-on-year growth of 64%
According to Zhitong Finance APP, Xiaomi Corporation-W (01810) fell over 3%, with a cumulative decline of 25% in stock price over the past month. As of the time of publication, it dropped 3.01% to HKD 44.42, with a trading volume of HKD 5.994 billion.
On the news front, the current storage chip market is facing a price surge, and Xiaomi's founder Lei Jun stated on Weibo on the 24th, "Recently, the price increase of memory has been too much." Cathay Securities believes that due to the sequential decline in sales proportion in the Chinese market and the impact of rising storage prices, it is expected that Xiaomi's smartphone gross margin will slightly decline by 0.5 percentage points to 11% in Q3. According to Lu Weibing's disclosure on October 23, the total sales of the Xiaomi 17 series, released at the end of September, increased by 30% year-on-year, with the Pro version accounting for over 80%, showing significant results in high-end positioning, which may offset the impact of rising storage prices in Q4 to some extent. In addition, the steady increase in vehicle deliveries is expected to bring operational profitability.
Citi's research report pointed out that Xiaomi Corporation is expected to announce its Q3 2025 results on November 18. Overall, the performance may be slightly below the bank's expectations, mainly due to lower-than-expected smartphone gross margins and Internet of Things (IoT) revenue, while the Internet business and electric vehicle business are generally in line with expectations. Citi now expects the group's adjusted net profit to reach RMB 10.2 billion (an annual increase of 64%, a quarterly decrease of 5%), affected by the smartphone gross margin due to an unfavorable regional mix and rising memory prices, as well as IoT revenue impacted by the weakening of China's subsidy effect
