Morgan Stanley published a research report that in the second quarter, weak demand in the industry, coupled with the destocking of promotional activities, XIAOMI's smartphone profit margin is expected to fall to 8.8% on a quarterly basis; at the same time, the cost of electric vehicles continues to rise and profit expectations continue to be under pressure. XIAOMI shipped 39.5 million smartphones in the second quarter, basically in line with expectations, and it is estimated that the average selling price of smartphones will drop slightly due to delays in the launch of high-end products, the report said. XIAOMI's smartphone business revenue fell 27% to 43.1 billion yuan in the second quarter. According to the bank, XIAOMI's AIoT business performed well, with TV shipments growing by 10 per cent year-on-year, while the industry recorded a 6 per cent decline over the same period. In terms of Internet business, the bank expects its operation to remain stable after deregulation. Morgan Stanley lowered its second-quarter net profit forecast under non-international accounting standards to 2 billion yuan, forecast full-year recurrent profit of 9.5 billion yuan, and its target price was lowered from 14 Hong Kong dollars to 13.4 Hong Kong dollars.