A：The three key points covered in the company's 2025 annual results announcement are the review of the company's main achievements in 2025, breakthroughs in hardcore tech such as AI and embodied intelligence, and the company's strategic direction for the coming year.

A：The main achievements of the Xiao MI Group in 2025 include maintaining high growth with both annual revenue and net profit reaching all-time highs, with total group revenue reaching 457.3 billion RMB, and adjusted net profit reaching 39.2 billion RMB. Additionally, the company saw a rise in its global smartphone market share, ranking top three for 22 consecutive quarters and achieving second place in Europe and Africa.

A：In the global smartphone market in 2025, the company's global smart phone shipments ranked top three with a market share of 13.3%. It maintained a consistent presence in the top three positions in Latin America and Southeast Asia and also rose to second place in Europe and Africa. In mainland China, the company's premium smartphone sales ranking rose to second place, with a significant increase in market share.

A：Highlights of the company's international business in 2025 include the launch of the first light phone for global markets priced at 1999 euros, marking a new milestone in its overseas premium strategy. The company's IoT business also achieved a record revenue of 123.2 billion RMB, with a 18.3% year-on-year growth.

A：Key achievements of the company's AI and home appliances business in 2025 include IT reaching a revenue of 23% growth with record shipments, with wearables ranking first globally, TWS earphones ranking second, and a 25.2% year-on-year growth in tablet shipments. The company successfully executed a full category premium strategy at home and abroad, with a strong showing in the European market and solid progress in the ultra-high-end 68k RMB market domestically.

A：In the company's electric vehicle business, they delivered 410,000 units in 2025, exceeding the 300,000 units target set at the start of the year. The company is fully committed to delivering an additional 550,000 units. The new SUC7 model was launched in March 2025 with major upgrades across the electric powertrain, chassis, electronics, and architecture, achieving significant pre-order numbers within the first 34 minutes of launch.

A：The company announced several breakthroughs in AI and hardware integration in 2025. These include major advancements in the era of truly useful AI, with paradigm shifts in complex task processing, planning, and ecosystem attributes. They also developed foundation large models that entered the leading global open source tier, with three models released completing the technical foundation for the agent Memo. Notably, they introduced the 'Xiao MI Auto' concept car, showcasing innovation and recognition by top simulation driving platforms. The new SUC7 was equipped with an 'XL' cognitive large model for advanced features in parking, navigation, scene understanding, and voice control. Additionally, they launched a medical smart home solution, 'Xiao Mi Mimo', which lays a new vision for next-generation smart homes.

A：The company plans to invest sixty billion RMB in AI over the next three years.

A：The company's haptic-driven precision grasping model cortex for robotic dexterous hands achieved several new state-of-the-art (SOTA) results.

A：The embodied robots in the car factory internship achieved a 92% deal size simultaneous installation success rate and a production line cycle time as quick as 76 seconds with three hours of auto operation.

A：In the short term, the company may face some pressure on their business due to challenges such as cost increase, but they will continue steadfast in their strategy.

A：The company's total revenue reached a record high of 157.3 billion, with a year-on-year increase of 25%.

A：The overall gross profit margin for the year was 22.3%, up one point three percent from the previous year.

A：The company's smartphone segment revenue was 186.4 billion RMB, accounting for 40.8% of total revenue, with global shipments reaching 165 million units in 2025.

A：The company's high-end strategy had significant results with a continuous product strength enhancement, showing an increase in sales and market share in China for the RMB 4000 to 6000 and RMB 6000 to 10000 price segments.

A：The company's revenue from IoT grew rapidly by 18.3% year on year to 123.2 billion RMB, with a gross profit margin of 23.1%, up 2.8% year on year.

A：Smart home appliances performed exceptionally well with a revenue increase of 23.1% year on year, maintaining an industry leading position. The company's wearable devices also maintained rapid growth, ranking first in global shipments for bands and second for tws earphones.

A：The company's internet service revenue hit a record 37.4 billion RMB, up 9.7% year on year, with a growth margin remaining relatively stable at 76.5%.

A：The annual revenue for the company's EV and AI innovation business segment reached 106.1 billion RMB, with a gross profit margin of 24.3%, up 5.8% year on year.

A：The company delivered a total of 418,202 new vehicles in 2025, with an average post-tax unit price of 251,071 RMB, up 7% year and year.

A：The company's five-year cumulative R&D expenditure was 105.5 billion RMB, up 37.8% from 2024, with an R&D expenditure of 33.1 billion RMB in 2025.

A：The company's adjusted net profit was 39.2 billion RMB, a record high and up 43.8% year on year. The capital expenditure (CAPEX) for 2025 was 18.2 billion RMB, up 73% year on year.

A：The company repurchased its shares on the open market, with a total of approximately 6.3 billion Hong Kong dollars in 2025. In January 2026, an automatic share repurchase plan was announced with a cap of 2.5 billion Hong Kong dollars, indicating the company's confidence in its long-term future.

A：The company performed well in the recent economic assessment, achieving its best-ever score of eighty one in the economics gold medal.

A：The company is confident in its robust and enterprising operating strategy and looks forward to even greater achievements in the coming year.

A：The company acknowledges the rising memory prices and the pressure it puts on smartphone manufacturers. They have made preparations for this and are closely monitoring the situation, with an expectation that the cycle of price hikes may be longer and the hikes higher than anticipated. The company is trying to absorb these costs, but if it becomes unfeasible, they may need to adjust their smartphone prices.

A：The company's product mix affects its exposure to memory price hikes in such a way that products with more memory are more impacted by price hikes. In the company's categories, such as smartphones, tablets, and notebooks, which have a higher proportion of memory, the impact is more significant compared to products like high-end smartphones where the memory part is less significant.

A：The company's competitive advantage in managing memory price hikes comes from their strong global relationships with memory suppliers, long-term supply contracts, and a diverse product portfolio. This helps them to mitigate the risks associated with supply shortages and to better manage the pressure of increased memory costs.

A：The company has announced that for the new generation of vehicles, they have achieved significant sales and have started delivering the cars to users after the first three days of sales, as they had prepared for the manufacturing of cars in advance to meet the delivery commitments.

A：The company justifies its approach by stating that locked-in orders represent solid commitments from buyers to take delivery of the vehicles, which govern the manufacturing cycle. They believe this is a fair representation of sales commitments and does not include pre-orders or backorders.

A：Locked contracts of purchase are considered a fairer way of looking at IT because this is the approach that the speaker and their company maintain is the right way, although they acknowledge that the industry may have different practices.

A：The locked orders buyers are from new buyers, according to the speaker.

A：The progress of locked contracts is faster than that of the first generation users, with larger locked orders and better penetration rates compared to the previous generation.

A：Approximately sixty percent of the locked contract users are using paid options.

A：The micro positioning of AI is not explicitly explained, but the speaker implies it is significant and that AI is moving into the physical world with the development of AI LLMs (large language models).

A：AI can enable individuals to do things they were not able to do before, and the potential market for AI in the physical world is significant, including applications in driving, robots, and human noise, which xiao mi has already started to deploy.

A：The AI agent developed by xiao mi, referred to as Michelle, is a prototype for testing the company's modeling capabilities, integration, and data handling. It will also integrate cloud-based data and ensure safety while serving the xiao M ecosystem.

A：Specific commercialization models and KPIs for the AI team at xiao mi are not yet established because the team will only have KPIs when the AI is mature and ready for commercialization.

A：The sixty billion IT expenditure over the next three years includes research and development (R&D), current and previous year's R&D carry-forwards, and capital expenditures (CAPEX). The allocation is such that in 2023, 70% of the capex is related to current period R&D, while the rest includes previous year's R&D carry-forwards and CAPEX.

A：Concerns include the potential economic ramping down in the domestic situation and how this will affect the business, as well as the planning for the IoT business to go overseas. The company sees an opportunity for premium growth in the China market, as the average selling price (ASP) of their products is low, and there is room for pricing in major home appliances.

A：The growth prospects for the IoT business in overseas markets are significant, with the potential to be six times the size of the domestic China market. There is a substantial amount of untapped room for development and growth in overseas markets.

A：The company plans to send people and products for overseas development, with a significant focus on the IoT sector. The intention is to grow the number of charm devices from 4.5 thousand to 10 to 110 thousand. The company's plan is to leverage the existing robust product range to enter and succeed in the high-end product sales prevalent in overseas markets like the UK.

A：The company is very confident about meeting its targets for the AI and new business segment, which include AI investment and new development areas. The segment has performed very well, showing growth in the auto sector and other areas, indicating potential for encouraging results.

A：The company aims to maintain balanced pricing to protect its profit margin, particularly for smartphones, without revealing a specific profit level for adjustments. For vehicles, there may be some pressure, but the company's focus is on product innovation and technological capability to keep products attractive despite potential increases in memory prices. The company tries to balance its market position and keep a cautious approach to forecasting, given the difficulty in quantifying cost impacts for products with significant memory components like smartphones.

A：The company views the Middle Eastern conflict as something to be avoided and hopes for a resolution to minimize global industry and economic impacts. As for its business, the impact is limited, with revenue from the Middle East being in the single digits as a contribution to profit, making it manageable to control. The company is closely monitoring the situation and the impact on raw materials such as pellets and plastics.

A：The company has increased R&D expenses and continues to see chips as a long-term strategic capability crucial for product types and categories beyond AI. Even with increased investment in AI, the company has not reduced its investment in chips, with many of the chips being part of the AI strategy. For PCs and tablets, the company will follow a similar strategy as smartphones, and it remains committed to delivering a good performance despite challenges such as rising memory prices.