小米集团：要么做大，要么回家

Company UpdateXIACYOVERWEIGHTChina TechnologyPrice TargetPrice (23-May-25)Potential Upside/DownsideSource: Bloomberg, Barclays ResearchChina TechnologyJiong Shao, CFA+1 212 526 5562jiong.shao@barclays.comBCI, USLian Xiu (Roger) Duan+1 212 526 4633lianxiu.duan@barclays.comBCI, USXinyao Song+1 212 526 6972xinyao.song@barclays.comBCI, US Restricted - External POSITIVEUSD 45.00USD 33.64+33.8% including two Arm Cortex-X925 prime cores clocked at 3.9GHz, and has delivered impressiveperformance with AnTuTu test score over 3 million points. Notably, single-core CPUperformance still lags A18 Pro, yet multi-core score has surpassed it. Further, XRING's powerefficiencyis on a par with A18 Pro, and is roughly 3 degree centigrade lower temperature duringgaming scenarios, highlighting great thermal management. Now the chip has entered massproduction and debuted in Xiaomi's new flagship smartphone Xiaomi 15S Pro and high-endtablet Pad 7 Ultra – both priced under RMB 6,000 and eligible for a RMB 500 national subsidy.XRING O1 of course has yet to fully surpass A18 Pro, but its arrival marks a major milestone thatXiaomi's in-house SoC is among the first-tier league in the industry and is closing the gap muchfaster than we had expected. Strategically, self-developed chips align with Xiaomi's long-termfocus of technology development, and can reinforce its competitive moat in the high-endsegment. Stepping back, it started SoC research over a decade ago in 2014 and launched its firstmid-end processor Pengpai S1 in 2017, which was limited adopted in its products. It determinedto restart SoC in 2021, has spent RMB 13.5bn (mainly in R&D) thus far to launch the XRINGchipset, and has committed to invest over RMB 50bn over 10 years to build in-house chipproducts. The chip R&D team now exceeds 2,500 people.Another in-house chip is XRING T1, which powers a new edition of smartwatch S4. A notablebreakthrough is that Xiaomi made the 4G LTE modem within chip, and 5G modem developmentis underway. Modem in SoC is likely a long-term initiative for Xiaomi.Given the long investment cycle for chip development, it remains too early to evaluate ROI. Thenear term financial impact on revenue and smartphone margins is limited. However, we seesignificant potential for these high-performance chips to power products across Xiaomi'sbroader ecosystem, from smartphone, home appliances and electronics, to EV. Alongside itsoperating system HyperOS and AI assistant, XRING will be instrumental in deliveringdifferentiatedproduct experiences and building a premium high-tech brand image for Xiaomi.Regulation-wise, Xiaomi has no presence in the US and is not planning to enter the market.Nonetheless, it's quite popular in the rest of the world and has maintained the top 3 globalsmartphone shipment market share for 19 consecutive quarters. We will monitor thegeopolitical and regulatory dynamics.SUV EV - YU7Xiaomi unveiled its second EV - YU7, a luxury high-performance SUV, slated for deliveries in July.Order bookings are expected to open on a similar pace. The model includes three versions -Standard, Pro and Max. Prices were not disclosed at the event, but CEO refuted reports of a RMB199k entry price, calling it unrealistic. YU7 appears positioned as direct rival to Tesla's Model Y,featuring a longer wheelbase (3,000mm), superior CLTC range (835km for Standard, 770km forPro, and 760km for Max), and faster charging time (12min from 10% to 80% under 800V 5.2C fastcharging). Also, all three models are equipped with LiDAR to improve night driving and complexobstacle scenarios, enhancing safety in assisted driving.Xiaomi's second EV factory is expected to complete in mid-June, and our channel checkssuggest it could achieve similar capacity as the existing one at 28k per month(two-shiftoperation)afterramping up. For Xiaomi, the main bottleneck remains production capacityrather than demand. Currently, its first EV SU7 continues to face over 10 months of waiting time.CEO shared that SU7 has delivered a total of over 258k units thus far, indicating over 121k unitsthis year until mid-May. April alone saw over 28k deliveries, making SU7 the top-selling modelpriced above RMB 200k in China. These results suggest our previous estimate of 76k deliveriesfor both 1Q and 2Q might be conservative.2 Home AppliancesXiaomi also introduced a lineup of smart home appliances at the event. CEO shared that, in 1Q,Xiaomi AC, refrigerator and washing machine sales volume each ranked fourth in China,increasing 102.7%, 144.9% and 184.4% yoy, respectively. Water purifier grew 78% yoy, claimingthe first position in China, while TV was up 7% yoy, ranking third. We estimate these categorieslikely represent over 40% of IoT segment revenues, underpinning the strong segment growth in1Q. 3 Analyst(s) Certification(s):We, Jiong Shao, CFA and Lian Xiu (Roger) Duan, hereby certify (1) that the views expressed in this research report accurately reflect our personal viewsabout any or all of the subject