Xiaomi's Electric Vehicle Profit Recovery Fails to Ease Concerns Over Production as Stock Falls

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Xiaomi's Electric Vehicle Profit Recovery Fails to Ease Concerns Over Production as Stock Falls

Bitget-RWA2025/11/18 12:50

By:Bitget-RWA

- Xiaomi Corp. reported 22.3% YoY revenue growth to 113.1B yuan in Q3, driven by EV and IoT expansion, but missed analyst forecasts of 116.5B yuan. - EV division posted first 700M yuan profit, selling 108,796 vehicles, but faces production delays and nine-month delivery waits. - Smartphone revenue grew 1.6% to 84.1B yuan amid rising chip costs; IoT revenue rose 5.6% to 27.6B yuan as subsidies declined. - Shares fell 2.81% to 41 HKD despite 80.9% net profit surge, as investors worried about revenue shortfal

Xiaomi Corp. (1810.HK) announced a 22.3% rise in revenue year-over-year, reaching 113.1 billion yuan ($15.9 billion) for the third quarter, fueled by growth in its electric vehicle (EV) and Internet of Things (IoT) sectors, although

this result did not meet analyst projections

of 116.5 billion yuan. The company’s adjusted net profit soared by 80.9% to 11.3 billion yuan,

surpassing market estimates

of 10.3 billion yuan. Despite outperforming profit expectations, Xiaomi’s shares slipped 2.81% to 41 Hong Kong dollars, as investors remained wary of

the revenue shortfall

and ongoing doubts about the scalability of its EV business.

The EV unit, which began operations in 2024,

recorded its inaugural profit of 700 million yuan

during the quarter, a significant improvement from the previous period’s 300 million yuan loss. Xiaomi

delivered 108,796 EVs

in the third quarter, setting a new company record, with revenue from this segment nearly tripling to 28.3 billion yuan. CEO Lei Jun

anticipates 350,000 EV shipments

by the end of the year, aiming to position Xiaomi alongside

Tesla Inc.

and BYD Co. in the global market. Still,

experts remain wary

due to production constraints and lengthy delivery times, with some customers facing waits of up to nine months for their vehicles.

Xiaomi's Electric Vehicle Profit Recovery Fails to Ease Concerns Over Production as Stock Falls image 0

Revenue from smartphones, Xiaomi’s primary business,

edged up by 1.6%

to 84.1 billion yuan, as higher memory-chip prices pressured selling prices. The IoT division, which covers wearables and smart home products,

achieved a 5.6% rise in revenue

to 27.6 billion yuan, though its growth slowed as government subsidies tapered off in 2024.

The recent drop in Xiaomi’s stock price mirrors wider market trends. Although the stock is up 18.2% so far this year, it has declined 23% since September

amid concerns over EV production capacity

and shrinking smartphone profit margins. According to HSBC Global Research, memory chips now make up over 20% of the material costs for Xiaomi’s entry-level smartphones, a challenge as global demand for AI hardware continues to drive prices higher.

Xiaomi’s gross margin improved to 22.9% from 20.4% a year ago,

thanks to reduced EV component expenses

and gains in manufacturing efficiency. The company’s goal to rank among the world’s top five automakers depends on its ability to ramp up production and compete in China’s fiercely contested EV market, where competitors such as Huawei Technologies Co. and BYD Co. are also expanding rapidly.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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