Application Analysis of Duan Yongping's 'Certainty' Investment Philosophy in Xiaomi's Diversified Model

: Xiaomi’s Q3 2025 financial report shows that its auto business achieved a first quarterly profit of 700 million yuan, with 500,000 units delivered in 19 months [1][2]. Its diversified strategy of “Phone + AIoT + Car + AI” contrasts with Duan Yongping’s investment philosophy of “certainty, moat, anti-diversification”.

:

• Certainty Dimension
  : Xiaomi’s phone business has high operational certainty relying on brand and supply chain advantages; however, new businesses like AIoT and cars are in the early stages of development, with significant uncertainty brought by technological iteration and industry competition [3], which conflicts with Duan Yongping’s principle of “focusing on predictable business models”.
• Moat Dimension
  : Traditional moat theory (brand, scale, technology, etc.) partially applies to Xiaomi’s phone business, but for the integrated model of AIoT ecosystem and smart cars, competitive advantages need to be re-evaluated: new types of moats such as the network effect of the AIoT ecosystem and the synergistic experience between smart cars and phones are emerging but not yet fully solidified [0].
• Anti-diversification Dimension
  : Xiaomi’s multi-track layout is directly opposite to Duan Yongping’s philosophy of “focusing on core businesses and avoiding resource dispersion”, and investors hold a wait-and-see attitude towards the long-term effect of its diversification strategy.

1. Layered Assessment of Certainty
   : For diversified tech companies like Xiaomi, businesses need to be assessed in layers as “certain core businesses” (phone) and “uncertain growth businesses” (cars, AIoT) instead of applying a single “certainty” standard.
2. Expansion of Moat Theory
   : Traditional moat theory needs to add new dimensions such as “ecological synergy effect” and “data value” to adapt to the business model of AIoT and smart car integration. Xiaomi’s ecological synergy potential is an important part of its future moat [0].
3. Balance Between Short-term Profit and Long-term Value
   : Xiaomi Auto’s first profit demonstrates its mass production capability and cost control advantages, but long-term competition in the smart car industry still requires continuous investment. Profit sustainability depends on technological iteration and ecological synergy [1].

:

• It is difficult to quantify the value of the ecological chain, making it hard for investors to evaluate its long-term contribution [0];
• The smart car industry is highly competitive, requiring huge investment in technology R&D and production capacity, and the sustainability of profits is questionable [1];
• Diversified layout may lead to resource dispersion, affecting the competitiveness of core businesses [3].

:

• The integration of AIoT and smart cars can form a unique ecological barrier, enhancing user stickiness and data value [0];
• The stable cash flow from Xiaomi’s phone business can support the development of new businesses [1].

• Xiaomi’s auto business achieved its first quarterly profit of 700 million yuan in Q3 2025, with 500,000 units delivered in 19 months [1][2];
• The applicability of Duan Yongping’s “certainty” investment philosophy to Xiaomi needs to distinguish between core businesses and new businesses;
• Traditional moat theory needs to be expanded to adapt to the new model of AIoT and smart car integration;
• The long-term effect of Xiaomi’s diversification strategy depends on ecological synergy and the improvement of certainty in new businesses.

This report is for information analysis only and does not constitute investment advice.