Guosen Securities maintained its “Outperform” rating for Xiaomi Group-W (01810), after the technology giant’s record 2025 financial performance and the first-ever annual profit from its smart electric vehicle business.
The investment bank’s report highlighted Xiaomi’s successful diversification and the synergistic potential of its “human-car-home” ecosystem, projecting the company’s net profit to reach 36.2 billion yuan in 2026.
The rating affirmation was driven by a strong 2025 showing where Xiaomi’s adjusted net profit surged 43.8 percent year-over-year to 39.2 billion yuan. Total revenue climbed 25.0 percent to 457.3 billion yuan, with overall gross margin improving by 1.4 percentage points to 22.3 percent.
EV Division Hits Profit Milestone
A key factor in the report was the performance of Xiaomi’s smart electric vehicle and AI division, which posted its first annual operating profit of 900 million yuan. The company delivered 410,000 vehicles in 2025, a 200.4 percent increase from the previous year, boosting the unit’s revenue to 103.3 billion yuan. The company has set a delivery target of 550,000 vehicles for 2026.
Core Segments Deliver Growth
Beyond electric vehicles, Xiaomi’s traditional business lines also posted strong results. The smartphone division maintained its position as the world's third-largest by shipments, with 165 million units sold in 2025. The IoT and lifestyle products segment saw revenue grow 18.3 percent to a record 123.2 billion yuan, while internet services revenue also hit a new high of 37.4 billion yuan.
The company is also increasing its focus on foundational technology, with research and development spending rising 37.8 percent to 33.1 billion yuan in 2025. This investment supports the "human-car-home" strategy, including the recent release of a trillion-parameter AI model, MiMo-V2-Pro.
The positive rating validates Xiaomi's costly diversification into the competitive electric vehicle market. Investors will now watch closely to see if the company can meet its ambitious 550,000-unit delivery target for 2026, which would confirm its trajectory as a major player in the automotive sector.
This article is for informational purposes only and does not constitute investment advice.
