Analysis of the Impact of Xiaomi SU7's Pricing Strategy and Market Performance on Group Valuation

Based on collected market data, news, and financial information, I have prepared this

.

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The Xiaomi SU7 adopts a

, covering a price range of RMB 215,900 to RMB 529,900:

Edition	Pricing (10,000 RMB)	Core Positioning	Competitor Benchmarking
Standard Edition	21.59	Mainstream Volume Model	Zeekr 007 (20.99), Tesla Model 3
Pro Edition	24.59	Mid-to-High-End Intelligent Model	Tesla Model 3 Long Range
Max Edition	29.99	High-Performance Coupe	BMW 5 Series New Energy, Zhijie S7
Ultra Edition	52.99	Ultimate Performance/Brand Upgrading	Tesla Model S Plaid (81.49)

The pricing of the Xiaomi SU7 Ultra is a model for the industry. During the pre-sale phase, the Nürburgring limited edition was priced at

, establishing an “upscale, scarce” image; upon official launch, it was unveiled at , a price difference of up to RMB 285,000, almost equivalent to the price of a SU7 MAX. This “high-first, low-later” strategy created a huge psychological gap and topic buzz:

• Over
  6,900 orders
  within 10 minutes of launch
• Over 10,000 orders within 2 hours
• Nearly
  20,000 firm orders
  within 3 days
• Far exceeding Lei Jun’s original target of “10,000 units sold annually”[1]

In the mainstream electric sedan market of RMB 200,000 to RMB 300,000, the Xiaomi SU7 has established a differentiated advantage through a

strategy:

• 800V high-voltage platform
• 800km ultra-long range (Max Edition)
• 2-second 0-100km/h acceleration (Ultra Edition)
• 350km/h top speed (Ultra Edition)

These performance parameters could only be achieved by million-level supercars in the traditional fuel vehicle era; Xiaomi has lowered the threshold to the RMB 200,000 to RMB 500,000 range, directly benchmarking against Tesla Model S Plaid (RMB 814,900) and Zeekr 001 FR (RMB 769,000), but at only

[1].

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Time Node	Deliveries/Orders	Milestone Significance
April 2024 (First Month)	Approximately 7,000 units	Production Ramp-Up Phase
December 2024 (First Full Year)	136,854 units	Completed First Full Delivery Year
January 2025	Monthly deliveries exceeded 23,000 units	Production Capacity Breakthrough
June 2025 (YU7 Launch)	200,000 firm orders within 3 minutes	SUV Market Breakthrough
Full Year 2025	Over 410,000 units	Exceeded the 300,000-unit target
December 2025	Monthly deliveries of 41,000 units	Hit a New All-Time High

According to the latest data disclosed by Lei Jun, the Xiaomi SU7 has delivered

, with an average monthly delivery of over 17,000 units, becoming the [2].

On June 26, 2025, Xiaomi’s second model, the YU7, was officially launched, priced at

:

• Over
  200,000 firm orders
  within 3 minutes
• Over
  289,000 firm orders
  within 1 hour
• Over
  240,000 locked orders
  within 18 hours

The market performance of the YU7 has surpassed that of the first model SU7, proving that the Xiaomi Auto brand has gained consumer recognition and that the product line expansion strategy is successful[2].

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The outstanding performance of Xiaomi Auto has become the

for the group’s valuation restructuring:

Time Point	Stock Price (HKD)	Market Capitalization (100 million HKD)	Valuation Driver
Early 2024	~12	~3,000	Traditional Mobile Phone + IoT Business
March 2024	~16	~4,000	Expectations for SU7 Launch
June 2024	~18	~5,000	Imminent SU7 Deliveries
February 2025	50.9	12,700	Deliveries Exceed Expectations, Auto Business Profitability
January 2026	~49.7	~11,500	Valuation Digestion, YU7 Launch

The stock price soared from

in early 2024 to a peak of , representing an increase of over ; the market capitalization exceeded , entering the global top 100 by market capitalization for the first time[3].

Traditionally, the market used a

for Xiaomi (P/E ratio of 15-20x). The success of the auto business has earned it a valuation premium:

• Change in Revenue Structure
  : Auto business share increased from 0 to approximately
  15%
  (2025 estimate)
• Growth Engine Switch
  : The auto business grew
  199% YoY
  in Q3 2024, becoming the strongest growth driver
• Profitability Validation
  : The auto business achieved its first quarterly operating profit of
  RMB 700 million
  in Q3 2024[2]

Currently, a total of

have issued ratings for Xiaomi Group, with an average target price of , representing approximately from the current stock price[4]:

Institution	Rating	Target Price (HKD)	Upside Potential
BOCOM International	Buy	75	+51%
BOC International	Buy	71.9	+45%
CLSA	Outperform with High Conviction	69	+39%
Daiwa	Buy	68	+37%
JPMorgan	Neutral	60	+21%

However, there are significant divergences in the market regarding valuation. Some analysts believe that the current valuation has fully reflected future profit expectations, requiring continuous performance verification[3].

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The success of Xiaomi Auto marks the official closure of its

:

• Mobile Phones
  as the intelligent hub (world’s third-largest mobile phone manufacturer)
• IoT
  device matrix (smart home, wearable devices)
• Cars
  as mobile intelligent terminals

The three businesses form a

:

• The HyperOS system connects mobile phones, cars, and smart homes
• Over 100 million MIUI users can seamlessly migrate to the auto ecosystem
• Brand loyalty is extended to the auto business

• Quarterly Revenue:
  RMB 28.3 billion
• Operating Profit:
  RMB 700 million
  (First Profit)
• Gross Profit Margin:
  Approximately 10-12%
• Business Share:
  Approximately 10%

• Expected Auto Revenue:
  Over RMB 100 billion
• Business Share:
  Approximately 15%
• Delivery Target:
  550,000 units
  (34% YoY growth)[2]

• Continuous production ramp-up at the Beijing plant
• Second plant in planning
• 2026 delivery target of 550,000 units, expected to exceed
  800,000 units
  in 2027

• SU7 (sedan) + YU7 (SUV) cover key markets
• More models expected to be launched in 2026-2027
• Global layout (potential entry into European and Southeast Asian markets)

• Continuous upgrade of L2-level advanced driver-assistance systems
• Integration advantages of the HyperOS cockpit ecosystem
• AI large models empowering intelligent driving

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Lu Weibing, President of Xiaomi Group, stated on the earnings call that the gross profit margin of Xiaomi Auto . The reasons include:

• Adjustments to national subsidy policies
• Fluctuations in raw material costs
• Intensified price competition[2]

The current P/E ratio is approximately 40-50x, which has fully reflected the high-growth expectations of the auto business. If deliveries or gross profit margins fall short of expectations, a valuation pullback may occur.

• Continuous price wars between BYD and Tesla
• Accelerated product iteration by new forces (Li Auto, NIO, XPeng)
• Accelerated electrification transformation of traditional automakers

• Uncertainty in intelligent driving technology routes
• New technologies such as solid-state batteries may disrupt the existing landscape
• Efforts still needed for independent and controllable chip supply

• JPMorgan predicts that the 2025 smartphone business growth rate will be only
  5%
• The growth rate of the IoT business will slow significantly in the second half of the year[4]

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Dimension	Assessment
Pricing Strategy	Successful — Balances mainstream market and brand upgrading, validated by order data
Market Performance	Exceeds Expectations — Deliveries continuously exceed targets, YU7 sustains market momentum
Valuation Impact	Significant Driver — 320% stock price increase, valuation logic restructuring
Business Prospects	Positive — Second growth curve confirmed, ecosystem synergies emerging

Based on the DCF valuation model and professional institutional views, the reasonable valuation range for Xiaomi Group is:

Scenario	Valuation (HKD/Share)	Driver
Optimistic	70-75	Auto deliveries exceed expectations, gross profit margin increases
Neutral	60-65	Meets delivery targets, maintains profitability
Conservative	50-55	Intensified competition, gross profit margin declines

Focus on auto delivery data and gross profit margin performance; if data continues to exceed expectations, the stock price is expected to break the previous high.

Focus on the pace of new product launches, intelligent function upgrades, and stable performance of the mobile phone business.

Xiaomi Auto is expected to become the following the mobile phone business, and the synergistic effects of the “Full Ecosystem of People, Cars, and Homes” will continue to release value.

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[1] Sina Finance - “Nearly 20,000 Firm Orders in 3 Days: What Did Xiaomi SU7 Ultra Do Right?” (https://finance.sina.com.cn/tech/roll/2025-03-07/doc-inenvmwi2532748.shtml)
[2] Jiemian News - “Lei Jun Officially Announces: The New Generation Xiaomi SU7 is Expected to Launch in April” (https://www.jiemian.com/article/13851446.html)
[3] Securities Times - “Xiaomi Group’s Stock Price Hits a New Intraday High; Analysts Diverge on the Company’s Valuation” (https://stcn.com/article/detail/1534770.html)
[4] Hstong News - “Earnings Preview | Xiaomi Earnings Imminent! Major Banks Including JPMorgan and CLSA Are Bullish; Auto Gross Profit Margin Becomes the Focus!” (https://news.hstong.com/post/content/25081417071055125)
[5] Baidu Auto - “Is Xiaomi SU7’s Pricing Reasonable? Multi-Dimensional Interpretation of the Underlying Market Logic!” (https://db.m.auto.sohu.com/model_7492/a/889849786_122143629)

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The chart above shows the Xiaomi SU7’s pricing strategy and market performance, including: 1) Price comparison with competitors; 2) Monthly delivery growth trend; 3) Order performance of each edition; 4) Evolution path of the group’s market capitalization.

The chart above analyzes Xiaomi Group’s business revenue structure and the growth contribution of each business segment, clearly showing that the auto business has become the group’s new growth engine.