Xiaomi Q3 2025 Earnings: Strong Results Meet Undervalued Stock Amidst Headwinds

Social Media Insights

Key points from the Xueqiu community highlight Xiaomi’s strong Q3 2025 results: record revenue (113.1B yuan), profit (11.3B yuan), and gross margin (22.9%), with auto business turning profitable for the first time (7B yuan). Concerns include storage chip cost hikes eroding smartphone margins and auto business’s long-term reliance on global expansion. The HK$40 valuation is seen as attractive, with long-term growth anchored in high-endization, auto globalization, and AI integration [1][3][9].

Research Findings

• Earnings: Q3 revenue rose 22.3% YoY to 113.1B yuan, net profit up 80.9% YoY to 11.3B yuan; auto revenue hit 28.3B yuan (197.9% YoY) with first quarterly profit [2][3][9].
• Stock Performance: Shares fell over 30% since June to below HK$40, with current P/E at 19-21x (half of年初 highs) [6][7][8].
• Market Sentiment: 47 buy ratings vs.5 non-buy; short interest surged 53% but mainland investors net bought for 13 consecutive days [4][8].

Synthesis

The strong Q3 results contrast with the stock’s sharp decline, indicating potential undervaluation. While short-term pressures (storage chip costs, auto margin risks) weigh on sentiment, long-term drivers (auto globalization, high-end phone growth) and analyst bullishness suggest a possible rebound [8][9].

Risks & Opportunities

• Risks: Storage chip price hikes (10%+ impact on smartphone margins) and lithium cost increases pressuring auto margins [1][8].
• Opportunities: Auto global expansion (key to scaling), high-end phone ASP growth, and AI integration into devices driving future revenue [3][5][8].