Xiaomi

Xiaomi CEO Lei Jun stated the company will avoid a price war, focusing on sustainable growth in the automotive sector. Xiaomi aims for a long-term hardware profit margin capped at 5% and plans to produce its own automotive chips. The YU7 standard edition pricing will be decided just before launch. The company projects its automotive, chip, and other new ventures will achieve profitability in Q3 or Q4, supported by strong Q1 performance and significant investment in intelligent driving system R&D.

Xiaomi’s stock is trading around HK$53.2, nearing a previous high. Its P/E ratio of 54 indicates strong growth potential. Facing the question of whether to buy, CEO Lei Jun emphasizes Xiaomi’s improving fundamentals and long-term performance, expressing confidence in future growth for long-term investors.

Xiaomi is combating speculation surrounding the pricing of its upcoming YU7 electric vehicle. The company issued a statement dismissing all circulating price estimates as unfounded, urging consumers to await official announcements. Company executives, including Wang Hua, emphasized pricing will only be confirmed just before the launch. Xiaomi also aims for its automotive division to achieve profitability this year, with significant investment in intelligent driving development.

Xiaomi’s founder, Lei Jun, revealed strategic updates, hinting at a transformed approach to the EV market. The YU7 model’s pricing deviates from initial speculations. Xiaomi aims for automotive division profitability as early as Q3/Q4, driven by technological innovation. The company invests heavily in AD and chip design to boost competitiveness. Robotics are also making progress, while Xiaomi maintains a 5% profit margin on hardware, signaling disruption in the competitive landscape.

Xiaomi partner Pan Jiutang commented on China’s EV market, highlighting the diverse approaches of key players like SAIC, BYD, Huawei, and Xiaomi itself. He emphasized the importance of market forces and consumer choice over internal evaluations of competitors. This followed public comments from another tech executive, reflecting the intense competition and evolving dynamics of the burgeoning Chinese EV industry.

Xiaomi founder Lei Jun responded to criticisms regarding its EV market entry with social media posts. He echoed resilience, emphasizing “opportunities for those who come later”. This followed remarks from a rival executive appearing to target Xiaomi’s success. Lei Jun also shared a quote about criticism signifying influence, indicating the company views scrutiny positively while acknowledging user support.

Xiaomi’s Lu Weibing, following Q1 earnings, discussed future challenges. He emphasized the risks associated with losing touch with core values as the company expands and the need for a scalable management system. External competition wasn’t highlighted; instead, Weibing advocated internal focus, referencing a proverb about self-improvement. Xiaomi’s automotive success further validates its strategy and product strength.

Xiaomi’s investment partner, Pan Jiutang, commented on the company’s entry into the EV market. He believes Xiaomi’s presence benefits the industry by driving competition and focusing on consumer needs. Jiutang emphasized their premium electric vehicle strategy, targeting a large market. His comments respond to predictions of Xiaomi’s rapid growth potentially impacting competitors, with significant sales growth expected in the coming years.

A social media exchange hints at a potential rivalry between Xiaomi and Huawei. Indirect responses from Xiaomi executives, including Lei Jun, to comments by Huawei’s Yu Chengdong at an automotive conference sparked speculation on Weibo. The exchange used cryptic quotes and proverbs to address Yu’s remarks on brand power and user experience in the EV market, suggesting a subtle disagreement.

Xiaomi’s 618 shopping festival kicked off strongly, with over RMB 16.9 billion in total channel payments by May 31st. Smartphones led the way, dominating domestic brand sales volume on major platforms like JD.com, Tmall, Douyin, Pinduoduo, and Kuaishou. Aggressive pricing, including significant discounts on the Xiaomi 15 series and Redmi Turbo 4 Pro, fueled the success. Promotional efforts extended to a range of connected devices. The 618 campaign is structured in three phases, with the kickoff phase starting May 31st.