$XIAOMI-W(01810.HK)
Can Xiaomi protect phone margins through premium push?
While Xiaomi’s EV delivery momentum is undeniably impressive, the Q4 earnings are likely to be defined by a significant 'pincer movement' on margins.
On one side, the core smartphone business is under immense pressure as memory chip costs surge and global shipments cool, with analysts projecting margins could dip as low as 8%.
On the other hand, the aggressive RMB 60B commitment to AI and the razor-thin margins on the new SU7 mean the company is burning capital faster than it can be offset by premium phone sales.
Even with the SU7’s success, the high cost of components and the 'price war' in the Chinese EV market suggest that bottom-line profitability will struggle this quarter. Investors should look past the delivery hype and focus on whether the premiumization strategy can actually stabilize these deteriorating gross margins.
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