05.21 YU7 GT Carrying on the past and ushering in the future, a great journey

Recently, Xiaomi's stock price has fallen into the range of HKD 29 since its continuous decline last October. Under the dual pressures of fierce competition in the smartphone and automotive markets and the industry cycle of rising supply chain costs, tonight's new product launch event shows that Xiaomi has delivered a well-considered answer.

I. Smartphone Market: Leveraging Cycle Differences for Top-Tier Specs, Accelerating Expansion of High-Net-Worth Users

The newly launched Xiaomi 17 Max features an 8000mAh Jinshajiang battery, a 200-megapixel main camera, and the Snapdragon 8 Ultimate Edition, priced in the 4K ~ 5K range, making it a well-rounded flagship with no weak points.

While the industry generally raises prices or reduces specifications due to soaring costs, Xiaomi leverages its scale bargaining power and price-locking advantages to maintain specifications and stable prices, effectively increasing product competitiveness within the same cycle. Looking at the price range, instead of blindly competing on scale in the 2K-3K market, it directly targets the mid-to-high-end segment, with clear intent—sacrificing some short-term profits to fully lock in high-net-worth users. Why expand high-net-worth users? Because Xiaomi's strategy is 'Human x Car x Home.' Compared to users seeking absolute low prices, high-net-worth users are easier to convert into deep users. Only with an appropriate user scale and structure is there room for future development.

As for the value-for-money base, REDMI's previous push into the high-end segment was somewhat aggressive, and it is expected to return to its main focus.

II. Automotive Market: Offense and Defense Combined, Bridging Past and Future

The YU7 Standard Edition at 235,000 yuan actually follows a logic similar to REDMI. Looking at gross margin alone, it's not impressive, but in a sluggish consumption cycle and fierce price war, it can stabilize market share and ensure a certain production scale to dilute supply chain costs.

The YU7 GT, priced at 389,900 yuan, has indeed received a good 'letter of introduction' from its European team, with Nürburgring endorsement bridging the past and future. It not only increases gross margin with extremely high segment value-for-money and leverages the domestic mid-to-high-end market but also lays a strong brand foundation for a full-scale overseas expansion in 2027.

III. Shareholding Sentiment: Take the Long View

Xiaomi is set to release its Q1 2026 financial report next Tuesday, and the stock price also reflects extreme pessimism under the cost cycle and market competition. Industry and market cycles are not within Xiaomi's control. Although the recent new product launch event tried to make balanced offensive and defensive decisions, in this macro environment, short-term stock prices and the market are likely to find it difficult to rebound.

However, looking at a longer cycle, Xiaomi's product power, execution, and technological capabilities have reached a new level. Compared to the past, today's Xiaomi has stronger automotive reputation, market endorsement, as well as AI and in-house chip capabilities. From the perspective of the company's lifecycle, I believe Xiaomi's real crisis can only occur when its core capabilities decline, not during this period of continuous breakthroughs.

Zooming out to the macro level, the East's new energy layout spans over 30 years, and its manufacturing layout over 15 years. Although the industrial momentum from these two overlapping advantages transmits slowly, its follow-through power is immense, and its international competitiveness cannot be surpassed in the short term. The current period is merely one of weak domestic demand and will not affect the macro trend. Take the long view.

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