China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy Research

Equity Bottom-Up

<ul>
<li>Xiaomi reported C1Q25 top line, non-IFRS operating income and IFRS net profit 2.0%, 41% and 57% vs. our estimate. </li>
<li>While there are a few product positives supporting outperformance, the main driver is still trade-in subsidy (TIS), which will start to end in C3Q25;</li>
<li>We continue to view Xiaomi as having an enviable market position as a “Huawei without the sanctions”, its valuation has also become very rich.</li>
</ul>


Xiaomi reported C1Q25 top line, non-IFRS operating income and IFRS net profit 2.0%, 41% and 57% vs. our estimate. 
While there are a few product positives supporting outperformance, the main driver is still trade-in subsidy (TIS), which will start to end in C3Q25;
We continue to view Xiaomi as having an enviable market position as a “Huawei without the sanctions”, its valuation has also become very rich.


[Xiaomi Inc. (1810 HK, BUY, TP HK$55) TP Change]: Trade-In Subsidy Is Still the Main Driver