Xiaomi Investment Value Assessment: Analysis Based on Duan Yongping's 'Certainty' Standard

Xiaomi’s ecosystem chain covers multiple areas such as smart hardware and home appliances, with a rich product line [0]. However, the network effect value of more than 5,000 products (not fully verified) is difficult to quantify using traditional financial indicators. Duan Yongping’s investment standard emphasizes the predictability of future cash flows [2]. Although the synergy effect of Xiaomi’s ecosystem chain is significant, the lack of a clear quantitative model increases the difficulty in evaluating investment certainty.

Xiaomi’s automotive business achieved its first quarterly profit of 700 million yuan in Q3 2025 [1], but the quality of the profit needs further verification. Data such as the 6.2 billion yuan loss in car manufacturing in 2024 (unverified) and 500,000 units delivered in 19 months (not fully verified) are pending official confirmation. The current automotive market is highly competitive, and whether Xiaomi’s technical reserves and supply chain advantages can support long-term profitability has become a key factor affecting investment certainty.

Duan Yongping’s traditional investment targets (Moutai, Apple) have clear brand, technology, or cost moats [2]. Xiaomi bets on future technologies like AIoT, and its moat is significantly different from traditional targets. Xiaomi’s net profit per phone is 14 yuan (unverified), and its brand is still labeled ‘cost-effective’ [0]. How to shift from ‘cost-effective’ to ‘technology-led’ and build a sustainable moat is the core issue in Xiaomi’s investment evaluation.

From September 1 to December 21, 2025, Xiaomi’s stock price dropped from 53.70 USD to 40.54 USD, a decrease of 24.51% [0], with a price-to-earnings ratio of 24.67 [0]. The market has a cautious attitude towards Xiaomi, focusing both on the positive signal of automotive business profit and concerns about its uncertainty.

• The network effect value of Xiaomi’s ecosystem chain needs to establish a quantitative evaluation system; otherwise, it will be difficult to meet Duan Yongping’s ‘certainty’ standard
• The profit of the automotive business needs to be comprehensively evaluated in combination with long-term technical investment and market competition pattern
• The construction of moats for new technologies like AIoT is the core of Xiaomi’s future investment value
• Investors need to strike a balance between Xiaomi’s ‘unfathomable’ new businesses and traditional ‘cost-effective’ businesses

1. Insufficient quantification of ecosystem chain value affects the certainty of future cash flow predictions [0]
2. Doubts about the sustainability of automotive business profits and fierce market competition [1]
3. Significant difference between AIoT moat and traditional targets, requiring time for verification [0]

1. The first profit of the automotive business shows the potential of technology and supply chain integration [1]
2. The AIoT market is still in the development stage, and Xiaomi has a first-mover advantage [0]
3. Long-term technical investment may promote the brand transformation from ‘cost-effective’ to ‘technology-led’ [0]

Based on Duan Yongping’s ‘certainty’ investment standard, this analysis comprehensively evaluates three dimensions of Xiaomi: ecosystem chain, automotive business, and moat evolution. Xiaomi’s automotive business achieved its first profit in Q3 2025, but issues such as difficulty in quantifying ecosystem chain value, doubts about automotive profit sustainability, and significant differences between moat and traditional targets remain to be resolved. Investors need to strike a balance between Xiaomi’s ‘unfathomable’ new businesses and investment opportunities, and pay attention to the improvement of predictability of its future cash flows.

It should be noted that data such as Xiaomi’s net profit of 14 yuan per phone, 6.2 billion yuan loss in car manufacturing in 2024, more than 5,000 products in the ecosystem chain, and 500,000 units delivered in 19 months have not been fully verified and should be subject to Xiaomi’s official financial reports.