XIACY · Forward model · Bear case
The Bear case, 20 quarters out
Each segment is projected from its own operating driver, rolled up into consolidated cash flow, and discounted back to a fair value per share. The assumptions below are editable — change them and every number on this page moves with them.
Four decisions decide how this model reads. First, the verticals are Xiaomi's five disclosed revenue lines and nothing finer: smartphones, IoT and lifestyle products, internet services, smart EV with AI and other new initiatives, and the other-related residual. Xiaomi publishes a gross margin for each of the first four and an operating result for the fifth segment only, so revenue and gross margin are disclosed and every EBITDA margin here is ours - an allocation of the RMB19.4bn of quarterly operating expense the company reports only at group level, with an assumed depreciation add-back. Nothing below gross profit is split by the company. Second, the currency. Xiaomi reports in renminbi and publishes no US dollar convenience translation, so every figure here is converted at the rate implied by each quarter's own stored consolidated revenue on this site - 7.2332 for the June 2025 quarter through 6.8046 for June 2026. That is deliberate: it makes the five verticals sum to the reported consolidated dollar figure to within one dollar in all five quarters, and it means the growth rates carry the exchange rate with them. Revenue fell 6.1% in renminbi and 0.1% in dollars over the year to June 2026. Third, what is estimated. The June 2026 quarter is disclosed in full and is the basis. Four earlier figures are ours: the December 2025 smartphone line, which is the full-year total less the other three quarters; the June 2025 internet services line, derived from the disclosed -0.6% year-over-year change; the September 2025 smart EV segment, which is the full-year total less the other three quarters; and every other-related quarter except June 2026, which is the residual after the four named lines. Those quarters are flagged, and a flag on any vertical flags the consolidated quarter with it. Fourth, three driver kinds rather than one. Smartphones and vehicles are modelled as units times price because Xiaomi discloses both halves every quarter and because in the June 2026 quarter they moved hard in opposite directions - a single growth rate would have hidden the whole story. Internet services is modelled as users times ARPU because monthly active users are disclosed; the ARPU itself is our division of two reported numbers and is not a company metric. IoT and the residual use growth rates because no unit, price or user figure exists for them in the public record. Two figures are softer than they look. Net cash of -$301m counts only the RMB37,252.4m of cash and cash equivalents disclosed at 30 June 2026 against RMB39.3bn of total borrowings; it excludes short-term investments the results announcement does not detail, so it understates liquidity - and at $0.06 per ADS either way it changes nothing. And the share count of 5,301,755,400 is the diluted weighted average of 26,508,777 thousand ordinary shares divided by five, because one XIACY ADR is five ordinary shares. The $17.70 price is a build-time snapshot and the page resolves the live quote instead.
Memory stays expensive, the premium mix reverts when it does, and the Chinese electric-vehicle price war reaches Xiaomi's segment before its volume does. Terminal revenue lands about 20% below base. What this case does NOT say is that Xiaomi breaks: internet services at a 76.8% gross margin is untouched by both problems, and it is the line that keeps group EBITDA positive throughout. The bear case here is a company that stops compounding, not one that stops earning.
Latest: $17.18B (2031Q2E)
| Period | Value |
|---|---|
| 2025Q2 | $16.03B |
| 2025Q3 | $15.81B |
| 2025Q4 | $16.49B |
| 2026Q1 | $14.32B |
| 2026Q2 | $16.01B |
| 2026Q3E | $16.12B |
| 2026Q4E | $16.23B |
| 2027Q1E | $16.35B |
| 2027Q2E | $16.46B |
| 2027Q3E | $16.58B |
| 2027Q4E | $16.71B |
| 2028Q1E | $16.83B |
| 2028Q2E | $16.97B |
| 2028Q3E | $17.10B |
| 2028Q4E | $17.24B |
| 2029Q1E | $17.39B |
| 2029Q2E | $17.55B |
| 2029Q3E | $17.71B |
| 2029Q4E | $17.88B |
| 2030Q1E | $18.05B |
| 2030Q2E | $17.88B |
| 2030Q3E | $17.70B |
| 2030Q4E | $17.52B |
| 2031Q1E | $17.35B |
| 2031Q2E | $17.18B |
What drives each segment
Smartphones
Units × priceThe acquisition engine, deliberately shrinking. Xiaomi shipped 31.2 million phones in the June quarter, down 26.5% year over year, while pushing average selling price to a record RMB1,351 - up 25.9%. The strategy is working on its own terms: phones at RMB3,000 or more reached 32.1% of Chinese mainland units, a record. It produced an 8.5% gross margin anyway, because memory cost more than the price increase recovered. This line is not where the profit is and has not been for years. It is where the 766 million monthly active users come from, which is where the profit is.
Latest: $5.20B (2031Q2E)
| Period | Value |
|---|---|
| 2025Q2 | $6.29B |
| 2025Q3 | $6.43B |
| 2025Q4 | $6.25B |
| 2026Q1 | $6.40B |
| 2026Q2 | $6.19B |
| 2026Q3E | $6.14B |
| 2026Q4E | $6.10B |
| 2027Q1E | $6.05B |
| 2027Q2E | $6.00B |
| 2027Q3E | $5.95B |
| 2027Q4E | $5.90B |
| 2028Q1E | $5.85B |
| 2028Q2E | $5.80B |
| 2028Q3E | $5.75B |
| 2028Q4E | $5.70B |
| 2029Q1E | $5.65B |
| 2029Q2E | $5.60B |
| 2029Q3E | $5.55B |
| 2029Q4E | $5.50B |
| 2030Q1E | $5.45B |
| 2030Q2E | $5.40B |
| 2030Q3E | $5.35B |
| 2030Q4E | $5.30B |
| 2031Q1E | $5.25B |
| 2031Q2E | $5.20B |
Assumptions & reasoning
- Gross margin of 8.5% is disclosed. The 1.0% EBITDA margin is ours: it loads this line with a share of the RMB19.4bn of quarterly operating expense that Xiaomi reports only for the group, and adds back an assumed share of depreciation. Xiaomi publishes no operating profit for the smartphone line.
- The terminal 6% assumes memory prices normalise and the premium mix built during the squeeze survives it. Both halves have to be true. If memory stays where it is and the mix reverts, this line runs closer to 2% and the model loses roughly a tenth of its value.
- Units and price are modelled independently, which is the point: the June quarter is the first in years where they moved hard in opposite directions, and a single growth rate would have hidden it entirely.
IoT and lifestyle products
Growth pathThe lock-in engine. RMB31.3 billion in the June quarter at a 20.1% gross margin, with 1.16 billion connected devices on the platform, up 17.4%. Revenue fell 19.2% year over year as Chinese appliance subsidies faded and overseas growth only partly offset it, which is what makes this the most cyclical line in the company. Its job is not margin. Its job is to raise the number of Xiaomi devices in a household, because a user with five is a different user from one with one.
Latest: $4.70B (2031Q2E)
| Period | Value |
|---|---|
| 2025Q2 | $5.35B |
| 2025Q3 | $3.86B |
| 2025Q4 | $3.47B |
| 2026Q1 | $3.57B |
| 2026Q2 | $4.60B |
| 2026Q3E | $4.62B |
| 2026Q4E | $4.63B |
| 2027Q1E | $4.65B |
| 2027Q2E | $4.66B |
| 2027Q3E | $4.67B |
| 2027Q4E | $4.68B |
| 2028Q1E | $4.68B |
| 2028Q2E | $4.69B |
| 2028Q3E | $4.69B |
| 2028Q4E | $4.70B |
| 2029Q1E | $4.70B |
| 2029Q2E | $4.70B |
| 2029Q3E | $4.70B |
| 2029Q4E | $4.70B |
| 2030Q1E | $4.70B |
| 2030Q2E | $4.70B |
| 2030Q3E | $4.70B |
| 2030Q4E | $4.70B |
| 2031Q1E | $4.70B |
| 2031Q2E | $4.70B |
Assumptions & reasoning
- A growth driver is the honest choice here and not the lazy one. Xiaomi discloses connected device count and revenue but no unit shipments, no average price and no category split with economics attached, so a unit driver would need a price per device that does not exist in the public record.
- This line is seasonal - air conditioners peak in the June quarter, which is most of why revenue rose 26.7% sequentially while falling 19.2% year over year. The projection is smooth and the history is not. Read the annual totals rather than individual projected quarters.
- The 20.1% gross margin is disclosed; the 10% EBITDA margin is our allocation of group operating expense and is the input most likely to be wrong in either direction.
Internet services
Subscribers × ARPUThe profit engine, and the reason the hardware margin can be as bad as it is. RMB9.0 billion of revenue in the June quarter at a 76.8% gross margin - 8.3% of revenue and, on gross profit, roughly 40% of everything the Smartphone x AIoT segment contributed. It scales with monthly active users, which reached a record 766.5 million, and it is monetised mostly through advertising, which grew 4.8%. This is the classic software-on-hardware conversion, and it is what funds the R&D that the other four verticals spend.
Latest: $1.45B (2031Q2E)
| Period | Value |
|---|---|
| 2025Q2 | $1.25B |
| 2025Q3 | $1.31B |
| 2025Q4 | $1.40B |
| 2026Q1 | $1.37B |
| 2026Q2 | $1.32B |
| 2026Q3E | $1.33B |
| 2026Q4E | $1.34B |
| 2027Q1E | $1.35B |
| 2027Q2E | $1.36B |
| 2027Q3E | $1.36B |
| 2027Q4E | $1.37B |
| 2028Q1E | $1.38B |
| 2028Q2E | $1.39B |
| 2028Q3E | $1.39B |
| 2028Q4E | $1.40B |
| 2029Q1E | $1.40B |
| 2029Q2E | $1.41B |
| 2029Q3E | $1.42B |
| 2029Q4E | $1.42B |
| 2030Q1E | $1.43B |
| 2030Q2E | $1.43B |
| 2030Q3E | $1.44B |
| 2030Q4E | $1.44B |
| 2031Q1E | $1.44B |
| 2031Q2E | $1.45B |
Assumptions & reasoning
- ARPU is derived, not disclosed. Xiaomi publishes internet services revenue and monthly active users separately and never divides them, so the $0.575 figure is our arithmetic on two reported numbers rather than a company metric.
- The 76.8% gross margin is disclosed and is the highest in the company by a wide margin. The 50% EBITDA margin is ours - advertising carries real sales and platform cost that Xiaomi reports only at group level.
- Terminal capex intensity rises rather than falls, which is deliberate: serving AI features into the OS costs compute that advertising in 2026 did not need.
- Attach mode is used rather than net adds because the constraint is how much of an existing device base ever becomes active, not how fast Xiaomi can add users.
Smart EV, AI and other new initiatives
Units × priceThe second engine, and the only vertical here with a shape rather than a rate. RMB24.9 billion in the June quarter, up 17.1%, at a 19.2% gross margin - a car business whose gross margin is now more than double the phone business's. Xiaomi delivered 104,199 vehicles, up 28.2%, into a Chinese passenger-vehicle market that shrank 22%. It still lost RMB2.6 billion from operations, because the quarter carried the run-up to the SkyNomad extended-range SUV line launching in September. The AI tail inside this segment - MiMo, priced by API token - turned over about RMB1.0 billion and is the first time it has been visible at all.
Latest: $5.57B (2031Q2E)
| Period | Value |
|---|---|
| 2025Q2 | $2.94B |
| 2025Q3 | $4.07B |
| 2025Q4 | $5.25B |
| 2026Q1 | $2.87B |
| 2026Q2 | $3.66B |
| 2026Q3E | $3.79B |
| 2026Q4E | $3.92B |
| 2027Q1E | $4.06B |
| 2027Q2E | $4.20B |
| 2027Q3E | $4.35B |
| 2027Q4E | $4.50B |
| 2028Q1E | $4.67B |
| 2028Q2E | $4.83B |
| 2028Q3E | $5.01B |
| 2028Q4E | $5.19B |
| 2029Q1E | $5.38B |
| 2029Q2E | $5.57B |
| 2029Q3E | $5.78B |
| 2029Q4E | $5.99B |
| 2030Q1E | $6.21B |
| 2030Q2E | $6.08B |
| 2030Q3E | $5.95B |
| 2030Q4E | $5.82B |
| 2031Q1E | $5.69B |
| 2031Q2E | $5.57B |
Assumptions & reasoning
- The unit price here is segment revenue divided by vehicles delivered, which is higher than the car's own average selling price because the segment also contains the AI and other-new-initiatives line. A reader moving the deliveries slider is moving the whole segment with it, and that is stated rather than hidden.
- This is the one vertical where operating profit IS disclosed: the segment lost RMB2.6bn from operations in the June quarter, and earned RMB0.9bn across the whole of 2025. The -2.5% EBITDA margin is that loss with an assumed depreciation add-back, and the depreciation is ours.
- Capex intensity of 9.2% comes from a disclosed figure: of RMB3,620.5m of group capital expenditure in the quarter, RMB2,382.6m was smart EV, AI and other new initiatives. It is the only vertical here whose capex is not an allocation.
- The terminal 12% EBITDA margin is the largest single judgement in this model. It assumes Xiaomi reaches something like a mature volume carmaker's economics on a line that has been positive for exactly one year. Move it before anything else.
Other related businesses
Growth pathThe residual inside Smartphone x AIoT - roughly RMB1.6 billion a quarter of accessories, repairs and other items Xiaomi reports as a line but never describes. It exists in this model so the five verticals sum to the reported consolidated revenue exactly, in every quarter, rather than approximately.
Latest: $269M (2031Q2E)
| Period | Value |
|---|---|
| 2025Q2 | $194M |
| 2025Q3 | $140M |
| 2025Q4 | $124M |
| 2026Q1 | $107M |
| 2026Q2 | $238M |
| 2026Q3E | $240M |
| 2026Q4E | $242M |
| 2027Q1E | $244M |
| 2027Q2E | $246M |
| 2027Q3E | $248M |
| 2027Q4E | $250M |
| 2028Q1E | $251M |
| 2028Q2E | $253M |
| 2028Q3E | $254M |
| 2028Q4E | $256M |
| 2029Q1E | $257M |
| 2029Q2E | $258M |
| 2029Q3E | $260M |
| 2029Q4E | $261M |
| 2030Q1E | $262M |
| 2030Q2E | $264M |
| 2030Q3E | $265M |
| 2030Q4E | $266M |
| 2031Q1E | $267M |
| 2031Q2E | $269M |
Assumptions & reasoning
- Only the June 2026 quarter is a disclosed figure here, at RMB1.6bn. The four earlier quarters are the residual left when the four named lines are subtracted from reported consolidated revenue, and are flagged estimated for that reason.
- Its economics are assumed outright. Xiaomi discloses neither a gross margin nor an operating result for this line, so both margin inputs are ours and the vertical is small enough that neither changes the answer.
- It is carried as its own vertical rather than folded into another one so that no named segment absorbs a residual it did not earn.
Where each case comes from
Bear case — primary sources
The primary sources this case is built from — filings, calls and posts. Where they are claims by an interested party rather than disclosures, every number in the Bear column is what happens if they are taken at face value.
Cost pressure, in the company's own words
Base case — primary sources
The primary sources this case is built from — filings, calls and posts. Where they are claims by an interested party rather than disclosures, every number in the Base column is what happens if they are taken at face value.
Bull case — primary sources
The primary sources this case is built from — filings, calls and posts. Where they are claims by an interested party rather than disclosures, every number in the Bull column is what happens if they are taken at face value.
The second engine, as disclosed
- Aug 18, 2026 104,199 vehicles delivered, up 28.2% year-over-year; smart EV, AI and other new initiatives revenue RMB24.9bn, up 17.1%
- Aug 18, 2026 Xiaomi SkyNomad will be officially launched in September, and we hope to receive everyone's continued support.
- Aug 18, 2026 Short-term pressure will not change our long-term strategy.
From cash flow to fair value
| Present value of free cash flow, 20 quarters | $2.10B |
| Terminal-year revenue | $69.75B |
| Terminal-year EBITDA | $4.45B |
| Exit multiple, on revenue | 1.2x |
| Terminal value | $83.70B |
| Discounted at 12.0% a year, terminal value becomes | $47.49B |
| Enterprise value | $49.60B |
| Net cash | -$301M |
| Equity value | $49.30B |
| Diluted shares | 5.30B |
| Fair value per share | $9.30 |
| Against the current price of $17.64 | -47% |
1.6x terminal revenue against roughly 1.5x enterprise value to trailing revenue today - $17.70 across 5.30bn ADS-equivalents, plus RMB2.0bn of net debt, over $62.6bn of trailing revenue. So the exit multiple assumes almost no re-rating, which is the conservative choice for a Hong Kong-listed company held through an over-the-counter ADR. The 12% discount rate is above the 10-11% used for US names on this site for the same reason. Move this slider before any other: it decides more of the answer than every operating assumption combined.
Read the other way round: at $17.64 the market is paying 2.3x terminal-year revenue, holding every other assumption on this page fixed. That is the number to argue about.
The projected path
| Quarter | Smartphones | IoT and lifestyle products | Internet services | Smart EV, AI and other new initiatives | Other related businesses | Revenue | YoY | EBITDA | Capex | FCF | R40 | PV of FCF |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2026 Q3E | $6.14B | $4.62B | $1.33B | $3.79B | $240M | $16.12B | +2% | $203M | $532M | -$329M | +0 | -$320M |
| 2026 Q4E | $6.10B | $4.63B | $1.34B | $3.92B | $242M | $16.23B | -2% | $293M | $533M | -$240M | -3 | -$226M |
| 2027 Q1E | $6.05B | $4.65B | $1.35B | $4.06B | $244M | $16.35B | +14% | $376M | $534M | -$158M | +13 | -$145M |
| 2027 Q2E | $6.00B | $4.66B | $1.36B | $4.20B | $246M | $16.46B | +3% | $453M | $536M | -$83M | +2 | -$74M |
| 2027 Q3E | $5.95B | $4.67B | $1.36B | $4.35B | $248M | $16.58B | +3% | $524M | $538M | -$14M | +3 | -$12M |
| 2027 Q4E | $5.90B | $4.68B | $1.37B | $4.50B | $250M | $16.71B | +3% | $590M | $541M | $40M | +3 | $34M |
| 2028 Q1E | $5.85B | $4.68B | $1.38B | $4.67B | $251M | $16.83B | +3% | $651M | $544M | $88M | +4 | $72M |
| 2028 Q2E | $5.80B | $4.69B | $1.39B | $4.83B | $253M | $16.97B | +3% | $708M | $548M | $131M | +4 | $105M |
| 2028 Q3E | $5.75B | $4.69B | $1.39B | $5.01B | $254M | $17.10B | +3% | $760M | $552M | $171M | +4 | $133M |
| 2028 Q4E | $5.70B | $4.70B | $1.40B | $5.19B | $256M | $17.24B | +3% | $810M | $556M | $208M | +4 | $157M |
| 2029 Q1E | $5.65B | $4.70B | $1.40B | $5.38B | $257M | $17.39B | +3% | $856M | $562M | $241M | +5 | $177M |
| 2029 Q2E | $5.60B | $4.70B | $1.41B | $5.57B | $258M | $17.55B | +3% | $899M | $567M | $272M | +5 | $194M |
| 2029 Q3E | $5.55B | $4.70B | $1.42B | $5.78B | $260M | $17.71B | +4% | $940M | $573M | $301M | +5 | $208M |
| 2029 Q4E | $5.50B | $4.70B | $1.42B | $5.99B | $261M | $17.88B | +4% | $979M | $580M | $327M | +5 | $220M |
| 2030 Q1E | $5.45B | $4.70B | $1.43B | $6.21B | $262M | $18.05B | +4% | $1.01B | $587M | $350M | +6 | $229M |
| 2030 Q2E | $5.40B | $4.70B | $1.43B | $6.08B | $264M | $17.88B | +2% | $1.05B | $573M | $389M | +4 | $247M |
| 2030 Q3E | $5.35B | $4.70B | $1.44B | $5.95B | $265M | $17.70B | +0% | $1.08B | $560M | $424M | +2 | $262M |
| 2030 Q4E | $5.30B | $4.70B | $1.44B | $5.82B | $266M | $17.52B | -2% | $1.10B | $547M | $456M | +1 | $274M |
| 2031 Q1E | $5.25B | $4.70B | $1.44B | $5.69B | $267M | $17.35B | -4% | $1.13B | $535M | $484M | -1 | $283M |
| 2031 Q2E | $5.20B | $4.70B | $1.45B | $5.57B | $269M | $17.18B | -4% | $1.15B | $524M | $510M | -1 | $289M |
Every row is projected. A year-over-year change is shown only where the quarter it compares against exists — an em dash means there is no comparable quarter, not a flat year.
Model revisions
Assumptions are marked to reality as each quarter prints. Every change is appended here, with the fair value the model produced at the time, so the model's own history stays visible.
| Date | Changed | Fair value then | Note |
|---|---|---|---|
| 2026-08-20 | $18.59 | First model. Five verticals on Xiaomi's five disclosed revenue lines, basis the June 2026 quarter, with units-times-price drivers on phones and vehicles and a users-times-ARPU driver on internet services. |