00:00Xiaomi has posted record results for 2025.
00:03Total revenue has climbed 25% year on year.
00:07Xiaomi's electric vehicle and AI innovation unit was the standout performer,
00:13posting its first annual operating profit.
00:16Revenue for that segment up by a staggering 223% to nearly $15.5 billion.
00:24Despite the robust performance of its electric vehicle,
00:27Xiaomi's overall growth was hindered by a slump in smartphone sales.
00:32In the fourth quarter alone, it fell more than 11%.
00:36Wuzhang Zhewei is President and Chief Economist at Pinpoint Asset Management.
00:42I would say really good numbers,
00:44considering that the overall macro environment in China now is,
00:48you know, the consumption space, the demand is not very strong,
00:51so the expectation was not very high.
00:54Nonetheless, I think the numbers they delivered are pretty good,
00:58particularly in their EV segment.
01:00I think the growth rate is quite impressive.
01:02You mentioned the EV business.
01:05It's relatively new.
01:07How central do you think it's going to become to Xiaomi's growth story?
01:12Well, this is absolutely the most important part of their business from a growth perspective.
01:18I think, you know, they certainly mobile phone sales is probably the number one component in their total revenue.
01:29But in terms of growth rate, I think the investors all focus on the EV sector.
01:36And they have been doing very well in the past couple of years.
01:40And they're the newcomer in this business,
01:42but nonetheless already made profit in the very competitive market.
01:46So on the right track.
01:47It is a competitive market.
01:49Picking up on what you were saying about smartphones,
01:52the core business is clearly under pressure.
01:55Is this cyclical?
01:57Is it structural?
01:58Something else?
02:00Yeah, I think there's a structural component,
02:04and then there's also some cyclical tidal wind.
02:07The consumption growth in China has been rather not very strong.
02:16It has been supported by government subsidies,
02:17and the subsidies are becoming less.
02:21So this year, I think the market already expects some slowdown in mobile phone sales.
02:26At the same time, there's also this cost factor that is also a bit challenging,
02:34that memory chips have become a lot more expensive because of the spillover effect from the AI sector.
02:42So the cell phone sales, I think not just for Xiaomi, for other makers as well,
02:49has been quite challenging, probably going to stay challenging for a while.
02:54Xiaomi talks about this connected ecosystem, AI, EVs, devices.
03:01And is that integration really taking shape yet, or is it still more of a vision for the future?
03:09I think we are probably still at the early stage.
03:13So, you know, this is a good concept.
03:17It's a very good story to tell over the longer term.
03:20And I think there is potential to be developed.
03:24But, you know, with the recent development in AI and agents and so on,
03:30so I think there's a clear upside that we can look over the next, say, one, two years.
03:38But I think right now, this is still a story.
03:43It hasn't really contributed that much to Xiaomi's quarterly earnings.
03:48Now, having said that, Xiaomi is probably the player, I would say, in the market
03:54because they are good across different sectors.
03:58So if anybody can pull out this story and deliver good results connecting all these different sectors,
04:06Xiaomi is probably the player that can do that.
04:10So if anybody can do that, we can do that.
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