Xiaomi's Q2 2026 revenue rebounded to RMB 108.9bn (+QoQ), though it dipped slightly YoY. Adj. net profit fell to RMB 6.2bn (-YoY), pressured by storage cost hikes squeezing mobile gross margins and increased R&D investment in EVs and AI, reflecting transitional pains from proactive strategic investments. High-end smartphone penetration continues, with ASP hitting record highs as the product mix optimizes; EV deliveries maintain steady growth, remaining a key growth driver. R&D spending remains elevated, bolstering foundational layouts in large models and smart manufacturing, while the 'human x car x home' ecosystem advances steadily. Short-term margin pressure persists due to cost headwinds, but mid-to-long-term catalysts lie in EV profitability ramp-up and AI-driven hardware monetization. The company is currently trading short-term earnings for long-term upside, warranting close tracking of GPM recovery and the inflection point for EV profitability.