xiaomi soars as pdd struggles: a tale of two chinese tech giants

2025-05-27 general

Guangzhou, Tuesday, 27 May 2025.
xiaomi’s first-quarter net profit jumped 260% year-on-year. This impressive growth was fueled by strong smartphone and appliance sales, boosted by chinese government subsidies. Meanwhile, pdd holdings, the parent company of temu, experienced a 47% drop in net profit. This decline resulted from intensified competition and reduced seller fees. The contrasting fortunes highlight the chinese market’s volatile nature. This impacts investment decisions significantly. One company’s surge contrasts sharply with another’s struggle in the same economic environment.

xiaomi’s financial highlights

Xiaomi Group’s first-quarter earnings showcase significant growth. Total revenue reached 111.3 billion yuan, a 47.4 increase year-over-year [3][5][6]. Adjusted net profit hit 10.7 billion yuan, marking a 64.5 surge from the previous year [3][5][6]. This performance underscores Xiaomi’s robust market position. It also highlights the effectiveness of its diversified business strategy [3]. The company’s strong financial health is further evidenced by its cash reserves. Cash and cash equivalents totaled 86.2 billion yuan [5]. This provides a solid foundation for future investments and strategic initiatives [5].

key growth drivers for xiaomi

Xiaomi’s ‘Smartphone × AIoT’ segment remains a primary revenue source. This division generated 92.7 billion yuan in revenue, a 22.8 increase year-over-year [3][5]. Within this segment, smartphone revenue reached 50.6 billion yuan, up 8.9 from the prior year, with 41.8 million units shipped, a 3 increase [3][5]. The average selling price (ASP) of smartphones also rose by 5.8 to 1211 yuan [3]. Xiaomi regained the top spot in mainland china with a market share of 18.8, a 4.7 increase [3][5]. The IoT and lifestyle products segment also performed well, with revenue increasing by 58.7 to 32.3 billion yuan [3][5].

electric vehicle ventures

Xiaomi’s strategic push into the electric vehicle (EV) market is gaining momentum. The smart electric vehicle and AI innovation division generated 18.6 billion yuan in revenue, including 18.1 billion yuan from EV sales [3]. The company delivered 75,869 Xiaomi SU7 series vehicles in the first quarter [3]. Despite these impressive figures, the division reported an operating loss of 500 million yuan [3]. The gross margin for the EV and AI division was 23.2%, up from 12.6% last year [3]. Xiaomi aims to deliver 350,000 vehicles throughout 2025 and is expanding production capacity to meet demand [4].

pdd holdings’ profit decline

In contrast to Xiaomi’s success, PDD Holdings reported a significant decline in profitability. PDD’s net profit decreased by 47% year-on-year to 14.7 billion yuan [1]. This downturn was attributed to increased competition and reduced fees for sellers on its platform [1]. Despite the profit drop, revenue increased by 10% to 95.6 billion yuan [1]. However, both revenue and net profit fell short of market expectations [1]. This suggests that PDD is facing challenges in maintaining its growth trajectory amid a dynamic e-commerce landscape [1].

analyst perspectives and future outlook

Analysts offer varied perspectives on Xiaomi’s prospects. Goldman Sachs highlighted Xiaomi’s AIoT ecosystem as a potential driver for future growth, positioning the company as a long-term winner in the AI space [4]. Morgan Stanley sees the launch of Xiaomi’s SU7 Ultra and the upcoming YU7 SUV as catalysts for growth in the premium vehicle market [4]. Xiaomi’s commitment to research and development is substantial. First-quarter R&D spending reached 6.7 billion yuan, a 30.1 increase year-over-year [4][5]. The company projects R&D investment to reach 30 billion yuan this year and plans to invest 200 billion yuan over the next five years [4].

Bronnen

chinese market smartphone sales