3betpoker| Bank of China: Maintain Xiaomi Group-W buy rating target price to HK$25.39

Bank of China International released a research report saying that it maintains the "Buy" rating of Xiaomi Group (01810) and believes that the increase in Xiaomi's mobile phone's global market share, the continued strength of AIoT and overseas Internet business will drive the company's FY24-25 growth. FY24 -26EEPS forecast increased by 12%-16% to reflect strong 1Q24 results, and target price increased to 253betpoker.39 Hong Kong dollars.

According to the report, Xiaomi Group announced 1Q24 results that exceeded expectations, with 1Q24 revenue reaching 75.5 billion yuan, a year-on-year increase of 27.0%3betpoker; The adjusted net profit was 6.5 billion yuan, a year-on-year increase of 100.8%, exceeding market expectations by 27%. The comprehensive gross profit margin was 22.3%, and the performance of gross profit margin and adjusted net profit exceeded previous expectations of the bank and market, mainly due to the strong gross profit margin performance of various business units, product portfolio optimization and higher financial income. At the performance meeting, the management reiterated its positive views on the continued increase in Xiaomi's mobile phone market share, the further expansion of its new retail strategy, and the accelerated delivery of Xiaomi's EVSU7 series.

In terms of core business Xiaomi mobile phones, 1Q24 shipments increased by 33.7% year-on-year. In terms of revenue by business line, revenue from the mobile phone/AIoT/Internet business unit increased by 32.9%/21.0%/14.5% respectively year-on-year, mainly due to the strong sales of Xiaomi's mobile phones, tablets, TWS wearable products and major home appliances during the quarter, and the increase in the number of global users of Xiaomi has improved the liquidity of overseas Internet business. The comprehensive gross profit margin reached 22.3% in the quarter. The gross profit margin performance of mobile phones was resilient. The gross profit margin of the AIoT business reached 19.9%, a record high, mainly due to the increase in revenue contribution from high-margin products such as tablets and major appliances.

In terms of EV business, the management has raised Xiaomi's 2024 full-year delivery target of SU7 EV to 120,000 units, and hopes to complete the delivery of 10,000 units in a single month in June. Currently, Xiaomi's automobile factory has been renovated and can achieve dual-shift production. In addition, the company will restart its new retail re-expansion strategy this year, expand another 10,000 Xiaomi Home stores in China in the three years from 2024 to 26, complete area expansion and optimize site selection, so that Xiaomi Home can better present "People-Vehicle-Home" full ecological chain products; and plans to also achieve new retail expansion overseas, replicate the Chinese mainland model, and accelerate the sales growth of overseas non-mobile phone products.