To The Moon

$XIAOMI-W(01810)$ China’s tech titan Xiaomi is making waves with its Q2 2025 financial results, unveiling a record-breaking RMB 116 billion in revenue—a 30.5% year-on-year surge—and an adjusted net profit of RMB 10.8 billion, up an impressive 75.4%. This marks the third straight quarter above RMB 100 billion, cementing Xiaomi’s position as a global powerhouse. With the S&P 500 at 6,466.58, Bitcoin at $124,002, and oil hovering at $75/barrel amid 30-35% tariffs, the rally stands out, though the VIX at 14.49 suggests potential volatility. The stock, trading at HK$26.80 as of August 19, 2025, has climbed 15% this month, fueled by a second EV model launch and robust smartphone sales. Will this earnings beat propel it to new highs, or is the growth already priced in? This detailed analysis dives into the drivers, market sentiment, and strategies to navigate the potential breakout.

The Earnings Triumph: What’s Behind Xiaomi’s Surge?

The numbers paint a picture of explosive growth:

• Revenue Rocket: RMB 116 billion, up 30.5% from last year, outpacing the RMB 107.6 billion analyst consensus, driven by a 14.8% rise in smartphone and AIoT revenue to RMB 94.7 billion and a 21.3 billion contribution from the EV and AI segment.

• Profit Powerhouse: Adjusted net profit of RMB 10.8 billion, a 75.4% jump, smashing the RMB 10.1 billion estimate, with a gross margin of 22.8% reflecting premiumization success.

• EV Acceleration: The second EV model, launched in July, delivered 81,302 units in Q2, generating RMB 21.3 billion, with losses narrowing to RMB 1.2 billion from RMB 1.8 billion, bolstered by the Beijing Phase II factory’s 150,000-unit capacity.

• Smartphone Strength: Global shipments hit 42.4 million, up 0.6%, securing a 14.7% market share and third-place ranking, with the Xiaomi 15 Ultra driving a 19% ASP increase to RMB 1,211.

• Market Buzz: Posts found on X highlight “Xiaomi’s EV revolution” and “record-breaking margins,” though some question if the stock’s 15% monthly gain already reflects the news.

This earnings beat signals a pivot to profitability, but execution remains key.

Market Dynamics: Breakout or Bubble?

The broader context offers both opportunity and caution:

• Global Tailwinds: U.S. retail sales rose 0.3% in July, and India’s 100 GW solar milestone supports tech growth, while Xiaomi’s 23% European smartphone share and 58.7% IoT revenue surge add fuel.

• Tariff Tension: The 30-35% tariffs on EU/Mexico/Canada could raise costs, with Prism Capital’s 0.9% GDP cut forecast pressuring export margins, though domestic EV demand offsets some risk.

• Technical Edge: At HK$26.80, Xiaomi’s 50-day moving average at HK$23.50 and resistance at HK$28 suggest upside, with support at HK$25 if profit-taking hits.

• Valuation Debate: A forward P/E of 15.2x and P/S of 2.37x are above historical norms, sparking debate on whether growth is fully priced in, with analysts split between “Buy” and “Hold.”

• Sentiment Split: Optimism on X touts “undervalued tech giant,” but bearish notes warn of a 10-15% correction if EV losses persist or competition intensifies from BYD and Tesla.

The stock’s next move hinges on investor confidence and macro stability.

Will New Highs Follow? The Week’s Outlook for August 20-22

Can Xiaomi break out to a new peak?

• Bull Case: At HK$26.80, a 5-10% rise to HK$28-$29.50 is plausible this week if earnings momentum holds, with a 12-month target of HK$40 (49% upside) if EV and smartphone growth accelerate.

• Bear Case: A 5-8% dip to HK$25-$26 risks if tariff costs or EV delays spook investors, with HK$24 as support; a drop below could test HK$22, a 52-week low.

• Historical Context: Xiaomi’s all-time high of HK$38.70 (October 2021) and recent low of HK$15.32 (January 2025) frame a volatile range, but its $170 billion market cap signals strength.

• Catalyst Watch: EV production updates, smartphone ASP trends, or tariff resolutions could drive gains, while Q3 guidance below expectations might cap the rally.

• Daily Forecast: HK$27-$28.50 (Wednesday), HK$27.50-$29 (Thursday), HK$28-$30 (Friday), per analyst projections, eyeing a HK$29+ close if sentiment stays bullish.

• Long-Term View: If EV deliveries hit 350,000 in 2025 and IoT users grow to 800 million, a HK$45-$50 target (68-87% upside) by 2026 is in sight, though risks linger.

A new high above HK$38.70 is possible by year-end if catalysts align.

Trading Strategies: Ride the Wave or Lock in Gains

Short-Term Plays

• Chase Breakout: Buy at HK$27-$27.50, target HK$29-$30, stop at HK$26. A 5-9% gain if momentum holds.

• Dip Buy: Buy at HK$25-$26, target HK$28-$29, stop at HK$24.50. A 8-12% rebound if support holds.

• Profit Take: Sell at HK$29-$30, target HK$27-$28, stop at HK$31. A 3-7% gain if overbought.

• Options Play: Buy HK$30 calls or sell HK$25 puts (August expiry) for 150-200% gains on a 10% move.

• Scalp Swing: Buy at HK$26.80, sell at HK$28-$29, stop at HK$26. A 4-8% quick win.

Long-Term Investments

• Hold Xiaomi: Buy at HK$26-$27, target HK$45-$50 by 2026, for 68-87% upside if growth persists. Stop at HK$23.

• EV Play: Buy BYD (1211.HK) at HK$250-$255, target HK$300-$320, for 20-26% upside. Stop at HK$240.

• Tech Diversify: Buy Tencent (0700.HK) at HK$450-$455, target HK$500-$520, for 10-14% upside. Stop at HK$440.

• Defensive Pick: Buy Nestlé (NESN.SW) at CHF 100-$102, target CHF 110-$115, for 8-13% upside. Stop at CHF 98.

Hedge Strategies

• VIXY ETF: Buy at $14, target $17, stop at $12, to hedge volatility.

• SPY Puts: Use puts at 6,400 for a 5-10% market drop.

• Gold (GLD): Buy at $200, target $220, stop at $190, as a buffer.

My Trading Plan: Capitalizing on Xiaomi’s Momentum

I’m riding Xiaomi’s earnings wave with a strategic approach. I’ll buy at HK$27-$27.50, targeting HK$29.50, with a HK$26 stop, betting on the EV and smartphone boost. I’ll add BYD at HK$250-$255, aiming for HK$280, with a HK$240 stop, for EV exposure. I’ll include Tencent at HK$450-$455, targeting HK$470, with a HK$440 stop, and Nestlé at CHF 100-$102, targeting CHF 107, with a CHF 98 stop. I’m hedging with VIXY at $14, targeting $16, and holding 20% cash for a dip to HK$25 or tariff news. I’ll monitor EV updates and Q3 guidance closely.

Key Metrics

The Bigger Picture

Xiaomi’s Q2 2025 record of RMB 116 billion revenue and RMB 10.8 billion profit, up 30.5% and 75.4%, signals a tech titan on fire as of August 19, 2025, against a 6,466.58 S&P 500 and $124,002 Bitcoin. A 5-10% weekly rise to HK$28-$29.50 is in play, with a new high above HK$38.70 possible by year-end if EV and smartphone growth hold. A 5-8% dip to HK$25-$26 threatens if tariffs or competition bite, but support at HK$25 offers a floor. Long-term, HK$45-$50 (68-87% upside) beckons by 2026 if targets are met. Chase the rally, hedge with VIXY or GLD, and watch the news. This could be your next big win—act decisively.

Will you bet on Xiaomi hitting a new high? Share your strategy below! 🎁

📢 Like, repost, and follow for daily updates on market trends and stock insights.

📝 Disclaimer: This post is for informational purposes only and does not constitute financial advice. Always conduct your own research before making investment decisions.

📌@Daily_Discussion @Tiger_comments @TigerStars @TigerEvents @TigerWire