To The Moon

Hong Kong SDR Spotlight: Xiaomi – Rising Tech Titan from Budget Smartphones to EVs
SGX Stock Code: $Xiaomi HK SDR 2to1(HXXD.SI)$

🎯TBSG March Series: Data → Portfolio → Trading [🎟️ Sign Up Now]

19 Hong Kong (HK) mega-cap stocks including Alibaba, CATL, Zijin Gold and Xiaomi, are now tradable on SGX via Singapore Depository Receipts (HK SDR). HK SDR allows investors to flexibly diversify portfolios with bite-sized investment amounts <$1,000 compared to >$10,000 in Hong Kong. SDRs trade in Singapore dollars on SGX during local market hours, in board lot size of 100 units, and are fungible with the underlying security of the relevant stocks listed in Hong Kong. Learn more about SDRs here. 

Xiaomi has emerged as one of China’s most dynamic consumer-technology powerhouse, evolving from a budget smartphone maker into a multi-industry force spanning wearables, home appliances, lifestyle products, internet services, and now electric vehicles (EVs). With over 742 million global monthly active users, Xiaomi has built an ecosystem that increasingly touches multiple aspects of daily life, reinforcing its position as a central hub in consumers’ digital lives. Here are some highlights from SGX Academy Trainer, Tim Phillips from Inkcome, on Xiaomi’s transformation and growth drivers. Full article attached.

1. Smartphone business as anchor; stabilising volumes, improving profitability

• Smartphones account for >40% of Q3 2025 revenue, making it Xiaomi’s largest revenue driver.

• Consistently ranks among the world’s top smartphone vendors by shipment volume, supported by disciplined product‑mix management to defend market share.

• Strategic push towards higher‑end models lifts average selling prices and gross margins, creating a more resilient revenue base while retaining appeal for cost‑conscious consumers.

2. IoT & lifestyle products as potential monetization opportunities

• LoT and lifestyle made up ~25% of revenue and grew at a mid-single-digit rate.

• Asset‑light, partner‑driven model enables rapid ecosystem expansion without heavy capital commitments.

• Wide product ecosystem enhances user retention, creating optionality for future monetisation via software updates, subscriptions, and services.
   

3. Internet services underpin long-term margin expansion

• Internet services comprise ~8% of revenue, spanning advertising, gaming, financial services, and other software‑based offerings layered on top of Xiaomi’s hardware user base.

• Gross margin of 76.9%, higher than overall group’s gross margin (22.9%), contributing disproportionately to profits. 

• Scalable service revenue with minimal incremental cost has the potential to structurally lift group margins, repositioning Xiaomi closer to platform‑oriented peers rather than pure hardware manufacturers.
   

4. Bold expansion into EVs shows early promise 

• Entered the EV market in 2024 and secured 4.5% of China’s EV market by early 2026 with its wildly successful SU7. Global EV ambitions as it targets 550K EV deliveries by end 2026 (+34% YoY).

• First quarterly operating profit in Q3 2025 (RMB 700M), signaling improving economics.

• EV drove bulk of capex increase (+87% YoY to RMB 13B) and remains riskiest part of Xiaomi’s story.
   

5. Q3 2025 earnings: improving profitability but sentiments remain mixed

• Revenue +20% YoY to RMB 113.1B, with adjusted net profit +80% YoY to RMB 11.3B. Gross margin reach 22.9%, a multi-year high.

• Stronger earnings and margin expansion reflected improving demand alongside firmer pricing discipline and a richer product mix.

• Stock price declined ~20% YoY weighed down by concerns over rising DRAM prices potentially pressuring smartphone margins.
   

6. Valuation and market expectations

• Trades at ~22x trailing P/E ratio, in line with Tencent and Alibaba; higher than Meituan (~16×) and Pinduoduo (~10×).

• Re‑rating potential hinges on reducing reliance on low‑margin hardware and scaling higher‑margin services and EVs.

• Key risks include:
  (i) Execution across multiple strategic fronts (smartphones, IoT, internet services, EVs); and
  (ii) Regulatory, geopolitical and supply‑chain uncertainties affecting China‑based companies with global exposure.

For SG users only, welcome to open a CBA today and enjoy access to a trading limit of up to SGD 20,000 with unlimited trading on SG, HK, and US stocks, as well as ETFs.

🎉Cash Boost Account Now Supports 35,000+ Stocks & ETFs – Greater Flexibility Now