Investment Rating - The report maintains a "Buy" rating for Xiaomi Group [3][7]. Core Views - Xiaomi's smartphone market share has returned to first place in China, with a global shipment of 41.8 million units in Q1 2025, representing a 3% year-on-year growth and a global market share of 14% [1]. - The company is advancing its IoT business with a focus on high-end products and international expansion, aiming to establish 10,000 Xiaomi Home stores overseas by 2029 [1]. - The automotive segment shows promising growth, with the SU7 Ultra model achieving over 10,000 orders within three days of its launch, and the company expects to meet or exceed its annual delivery target of 350,000 vehicles in 2025 [2]. - Xiaomi has launched its first open-source inference model, "Xiaomi MiMo," which outperformed competitors in public testing, indicating a strong potential for AI hardware integration in its products [2]. Financial Projections - Revenue projections for 2025-2027 are estimated at CNY 488.6 billion, CNY 643.3 billion, and CNY 792.4 billion, with year-on-year growth rates of 34%, 32%, and 23% respectively [3][5]. - Adjusted net profit for the consumer electronics segment is projected to be CNY 390 billion, CNY 496 billion, and CNY 591 billion for the same period, with growth rates of 17%, 27%, and 19% respectively [3][5]. - The automotive segment is expected to contribute adjusted net profits of CNY 15 billion, CNY 100 billion, and CNY 173 billion from 2025 to 2027 [3]. Key Financial Metrics - The report forecasts a non-GAAP EPS of CNY 1.6, CNY 2.4, and CNY 3.1 for 2025, 2026, and 2027 respectively [5][14]. - The price-to-earnings (P/E) ratio is projected to decrease from 29 in 2025 to 15 in 2027, indicating a potential increase in valuation as earnings grow [5][14]. - The gross margin is expected to improve from 21.9% in 2025 to 23.5% in 2027, reflecting enhanced profitability across segments [14].

Market Overview - Hong Kong stocks experienced a strong start in May, with all three major indices rising collectively. The Hang Seng Index increased by 1.74% to close at 22,504.68 points, with a total trading volume of HKD 133.73 billion. The Hang Seng China Enterprises Index rose by 1.92%, and the Hang Seng Tech Index surged by 3.08% [1] - For the week, the Hang Seng Index gained 2.38%, the China Enterprises Index rose by 1.86%, and the Tech Index increased by 5.24% [1] Blue-Chip Stocks Performance - Xiaomi Group-W (01810) continued its upward trend, closing up 6.31% at HKD 53.1, contributing 91.5 points to the Hang Seng Index. The company is expected to report strong revenue growth and significant margin expansion in Q1, with adjusted net profit projected to increase by 43% year-on-year to RMB 9.3 billion [2] - Other blue-chip stocks included WuXi AppTec (02359) up 7.07%, WuXi Biologics (02269) up 5.7%, while China National Pharmaceutical Group (01099) and Bank of China Hong Kong (02388) saw declines [2] Sector Performance - Major technology stocks saw significant gains, with Xiaomi up over 6%, Alibaba rising nearly 4%, and Tencent increasing over 2%. The automotive sector also performed well, with several companies reporting high year-on-year sales growth in April [3][4] - The AI sector remained active, with companies like GDS Holdings (09698) and Kingsoft (03888) seeing substantial increases in their stock prices [4][5] - Consumer electronics stocks generally rose, with companies like Hong Teng Precision (06088) and KANAT (02276) experiencing notable gains [6] Automotive Sector Highlights - Several automotive companies reported impressive April delivery figures, with Li Auto delivering 33,939 vehicles (up 31.6% year-on-year), Xiaopeng Motors delivering 35,045 vehicles (up 273%), and NIO delivering 23,900 vehicles (up 53%) [4] - The overall retail sales of new energy vehicles in China reached 728,000 units in April, marking a 24% increase year-on-year [4] AI Industry Developments - The domestic AI large model sector is witnessing rapid advancements, with several companies releasing new models. For instance, Xiaomi launched its inference-focused open-source model, Xiaomi MiMo, while Alibaba introduced its Qwen3 model [5] - Analysts predict that the AI industry in China is poised for significant growth, with expectations for a "golden development period" by 2025 [5] Gold Sector Performance - The gold sector faced pressure, with several gold stocks declining as international gold prices fluctuated. The price of gold fell below USD 3,230 per ounce, influenced by reduced market risk appetite and profit-taking by investors [7] - Analysts suggest that the market's focus may shift from "credit logic" to "interest rate logic," indicating potential for gold prices to stabilize in the short term [7]

Core Viewpoint - CICC has raised its adjusted net profit forecasts for Xiaomi Group for 2025 and 2026 by 4.6% and 3.8% to CNY 40.197 billion and CNY 54.743 billion respectively, maintaining a target price of HKD 70, indicating a potential upside of 40.1% from the current stock price [1] Group 1: Financial Performance - The adjusted net profit for Q1 2025 is expected to grow by 53.03% year-on-year, with revenue projected to increase by 44.85% to CNY 109.37 billion [2] - Xiaomi's smartphone shipments are expected to rise by 3% year-on-year to 41.8 million units globally, with a 40% increase in the Chinese market, leading to a revenue growth of 8.3% to CNY 50.327 billion [3] - IoT revenue is anticipated to grow by 52% year-on-year to CNY 30.968 billion, with a gross margin increase of 3.68 percentage points to 23.5% [4] Group 2: Automotive Business - The delivery of the Xiaomi SU7 is projected to reach 76,000 units in Q1 2025, generating revenue of CNY 18.18 billion, with a gross margin increase of 0.76 percentage points to 21.2% [5] - The company expects a 192% year-on-year growth in automotive shipments in 2025, reaching 400,000 units, driven by the sales of SU7 Ultra and the upcoming launch of YU7 [5]

Investment Rating - The report maintains a "Buy" rating for Xiaomi Group [11][13]. Core Insights - The "Self-Pleasing" new consumption concept supports the successful launch of the SU7, with the YU7 expected to replicate this success. Xiaomi is accelerating its layout of extended-range models, entering a strong product cycle, and is expected to achieve rapid sales of one million vehicles. Based on Xiaomi's steady growth trend in high-end penetration in its smartphone and IoT businesses, as well as the rapid ramp-up of its automotive segment, the projected net profit attributable to shareholders for 2025, 2026, and 2027 is estimated to be 35.404 billion, 51.653 billion, and 65.531 billion yuan respectively [4][11]. Summary by Sections SU7 Initial Success and YU7 Potential - The 200,000 to 300,000 yuan price segment for cars is continuously expanding, with the SU7 positioned accurately and establishing a mid-to-high-end brand tone, achieving an average monthly sales of 23,000 units since its launch. The YU7 is expected to target a larger market and leverage its comprehensive strengths to potentially become another bestseller [7][34]. Xiaomi's Methodology and Automotive Success - Xiaomi's success in the smartphone and IoT sectors has led to the development of a unique "User + Product + Technology + Efficiency" methodology. This includes a large fan base, self-developed motor and control technology, supply chain management to reduce production costs, and a focus on creating blockbuster products [8][9]. Strong Model Cycle and Sales Projections - The high-end market is expanding, with significant opportunities for domestic alternatives in the electric and intelligent vehicle sectors. The projected sales for the high-end passenger car market (priced above 200,000 yuan) in 2024 is 9.443 million units, a year-on-year increase of 4.8%. The CAGR for high-end market sales from 2020 to 2024 is 14.6%, with domestic brands expected to capture a growing market share [9][10]. Brand Synergy and Ecosystem Integration - The launch of the SU7 not only marks the realization of Xiaomi's car manufacturing plans but also extends its "Smartphone + AIoT" ecosystem strategy into the automotive sector. The interconnected ecosystem enhances user stickiness and drives revenue growth across other product lines, with the lifetime value of automotive users exceeding 230,000 yuan [10][11]. Investment Recommendations - The report emphasizes the potential for Xiaomi to replicate Tesla's profitability rhythm, with expectations for the automotive segment to turn profitable by 2025, and a projected net profit per vehicle exceeding 10,000 yuan [9][10].

Core Insights - The Chinese smartphone market experienced a mild growth of 5% year-on-year in Q1 2025, with shipments reaching 70.9 million units, driven by national subsidy policies and consumer recovery [1][3] Group 1: Market Performance - Xiaomi led the market with shipments of 13.3 million units, a 40% increase year-on-year, capturing a market share of 19% [1][5] - Huawei followed closely with 13 million units shipped, maintaining double-digit growth [1][5] - OPPO and vivo ranked third and fourth with shipments of 10.6 million and 10.4 million units, respectively [1] - Apple saw a decline in shipments to 9.2 million units, an 8% drop year-on-year, placing it fifth in the market [1][5] Group 2: Impact of National Subsidy Policy - The national subsidy policy implemented in January has positively influenced market performance, prompting some consumers to upgrade their devices earlier, reflecting a shift in demand rather than organic growth [3] - The policy has also reinforced the dominance of major retail channels and e-commerce platforms like Tmall and JD.com [3] Group 3: Company Strategies and Innovations - Xiaomi's growth is attributed to its product and channel synergy, with a unified pricing strategy that reduces consumer decision costs [5] - Huawei is focusing on effective channel management and expanding its product offerings, including advancements in foldable devices and the development of the HarmonyOS ecosystem [5] - The penetration rate of AI smartphones in China reached 22% in 2024 and is expected to exceed 40% in 2025, highlighting the importance of innovation in areas like foldable screens and operating systems [5]

Financial Performance - Xiaomi Group reported a revenue of HKD 365.91 billion for the fiscal year 2024, an increase of 35.1% compared to HKD 270.97 billion in 2023[11]. - The net profit for 2024 was HKD 76.56 billion, up 33.3% from HKD 57.48 billion in the previous year[11]. - The company achieved a gross profit of HKD 24.50 billion, representing a 22.5% increase from HKD 20.01 billion in 2023[11]. - Xiaomi's operating profit for 2024 was HKD 28.13 billion, a rise of 27.5% compared to HKD 22.01 billion in 2023[11]. - The company reported a total operating income of $38.57 billion, down from $44.40 billion in 2023, indicating a decrease of 13.0%[12]. - The company reported a revenue of 702.3 million, representing a 9.5% increase year-over-year as of December 31, 2024[18]. - The company reported a revenue of 365,906.4 million for the year ending December 31, 2024, compared to 270,970.1 million in 2023, representing a year-over-year growth of approximately 35.1%[34]. - The company reported a revenue of 63,464.0 million for the fiscal year ending December 31, 2024, reflecting a growth of 55% compared to the previous year[62]. - The company reported a total revenue of $2,115,629 million for the latest fiscal year, a decrease of 760,299 million compared to the previous year[80]. - The company reported a revenue of $4,517,510,134 for the fiscal year ending December 31, 2024, representing a year-over-year growth of 21.9%[134]. Market Expansion and Strategy - The company plans to expand its market presence in Europe and Southeast Asia, focusing on increasing its smartphone market share[11]. - The company plans to expand its market presence in the AIoT sector, focusing on innovative product development and strategic partnerships[14]. - The company is exploring potential mergers and acquisitions to strengthen its position in the technology sector[11]. - The company is focusing on expanding its market presence in the smart device sector, with a projected revenue of K 58 million from new product lines by December 2024[28]. - The company aims to launch new products and technologies in the upcoming quarters to drive further growth and market share[30]. - The company plans to enhance its ESG (Environmental, Social, and Governance) initiatives, aiming for a MSCI ESG rating improvement to BB by the end of 2024[30]. - The company is focusing on market expansion strategies to enhance revenue growth in the upcoming years[54]. - The company is exploring potential acquisitions to enhance its market position and product offerings[56]. - The company is focusing on market expansion strategies, particularly in Asia and Europe[70]. - The company plans to expand its market presence in Asia, targeting a 15% increase in market share by 2025[72]. Research and Development - Xiaomi is investing in new product development, particularly in AI and smart home technologies, to enhance its ecosystem[11]. - The company reported a significant increase in R&D expenditure to HKD 24.34 billion, reflecting a commitment to innovation and technology advancement[11]. - The company is investing in R&D for new technologies, including advancements in AI and IoT solutions[20]. - The company is investing in new technologies to enhance its product offerings, particularly in the AIoT space[15]. - The company plans to invest in new technologies, aiming for a 6.8% increase in R&D spending to drive innovation[133]. - The company has allocated $200 million for research and development in the upcoming year to innovate and improve existing products[126]. - The company is investing $50 million in R&D for new technologies aimed at enhancing user experience[87]. - Research and development expenses increased by 10%, totaling $30 million, focusing on innovative technologies[71]. - The company is investing in new technology development, aiming to enhance user experience and increase market share[79]. - The company is focusing on new product development and technology advancements to enhance user engagement and retention[139]. User Engagement and Data - The company reported a significant increase in user data, with active users reaching 17 million, a growth of 20% year-over-year[11]. - User data showed a significant growth in AIoT segment, with revenue of $3.66 billion, reflecting a 35.0% year-over-year increase[13]. - User data for AIoT products reached 904.6 million, marking a 22.3% growth year-over-year by December 31, 2024[18]. - User data indicates a total of 3,719,482 active users, with a significant increase in engagement metrics[51]. - User data showed a total of 6,829,800 active users as of January 6, 2025, indicating a growth trend in user engagement[64]. - User data showed a growth of 12 million active users, bringing the total to 150 million[87]. - User data indicated a total of 2,358,377,326 active users, with a growth of 124,851,426 users compared to the previous year[85]. - User data showed a total of 609,370,425 active users, with a decline of 181,420,563 users year-over-year[80]. - User data indicates a total of 40 million active users as of December 31, 2024, which is an increase of 36% year-over-year[62]. - User data showed a growth of 25% in active users, totaling 5 million by the end of the quarter[143]. Future Outlook and Guidance - Xiaomi's future outlook includes a revenue growth target of 15-20% for the next fiscal year, driven by new product launches and market expansion[11]. - Future guidance suggests a continued upward trend in revenue, with expectations of reaching $450 billion by the end of 2025[16]. - The company anticipates a revenue guidance of 4,000 to 5,000 million for the upcoming year, with a projected growth rate of 23.3%[20]. - Future guidance indicates a strong growth trajectory, with total revenue expected to reach $272 million by the end of 2024, up from $193 million in 2023[48]. - The company provided a future outlook with a revenue guidance of $27,234,531 for the upcoming fiscal year, indicating a growth trajectory[51]. - The company provided guidance for 2024, expecting revenue growth of approximately 10%[68]. - Future guidance remains positive, with management expressing confidence in achieving set targets and enhancing shareholder value[113]. - The company is projecting a revenue growth of 20% for the next fiscal year, driven by new product launches and market expansion strategies[126]. - The company has provided guidance for Q4 2023, expecting revenue to reach approximately $3.10 million[147]. - The company provided a forward guidance of 10% revenue growth for the next quarter, projecting revenues of approximately $1.32 billion[144].

Investment Rating - The investment rating for Xiaomi Group is "Buy" [1] Core Views - The report anticipates that Xiaomi's automotive deliveries will exceed market expectations, predicting 848,000 units by 2026, with the YU7 model contributing 360,000 units [1] - The adjusted net profit forecasts for 2025 and 2026 are 356.6 billion CNY and 469.5 billion CNY, respectively, which are 16% and 31% higher than Bloomberg consensus [1] - The automotive business is expected to enhance Xiaomi's profit margins and expand its ecosystem barriers, driving a surge in dealer store openings [1][6] Summary by Sections Automotive Business Impact - Xiaomi's automotive business is projected to achieve profitability in 2025, with adjusted profits exceeding 10 billion CNY in 2026, driven by the success of the SU7 and YU7 models [6][13] - The SU7 model is expected to maintain a steady monthly sales volume of around 25,000 units in 2025, capturing approximately 23.13% of the 200,000-300,000 CNY price segment [28] - The YU7 is anticipated to capture a 16.2% market share in the 200,000-250,000 CNY SUV segment, with projected annual sales of 360,000 units [28] Ecosystem Expansion - Xiaomi's automotive sales are expected to create a "flywheel effect," enhancing the profitability of Xiaomi's retail stores and driving a surge in new store openings [29][36] - The integration of the Xiaomi HyperOS across over 200 product categories is set to facilitate data interconnectivity and enhance user experience across the "people, car, home" ecosystem [32][34] Financial Forecasts and Valuation - Revenue forecasts for 2025-2027 are 481.84 billion CNY, 636.48 billion CNY, and 716.47 billion CNY, with year-on-year growth rates of 31.7%, 32.1%, and 12.6% respectively [7][39] - Adjusted net profit forecasts for the same period are 416.42 billion CNY, 613.35 billion CNY, and 655.96 billion CNY, with growth rates of 52.9%, 47.3%, and 6.9% [7][39] - The report employs a sum-of-the-parts valuation method, estimating a target price of 56.12 HKD per share based on a 20x PE for core business and a 3x PS for the automotive segment [42][43]

Group 1 - The core viewpoint is that Xiaomi Group-W (01810) remains a top pick among Chinese tech stocks due to its strong growth driven by a unique ecosystem, minimal impact from U.S. tariffs, and no risk of delisting from U.S. Depository Receipts (ADR) [1] - The company maintains a "Buy" rating with a target price of HKD 63.25 [1] - Investor feedback is generally positive, with concerns mainly focused on high market expectations and potential delays in the launch of SUV models [2] Group 2 - All emerging market/Asian funds hold Xiaomi shares and agree with its investment story, although many investors are cautious due to escalating U.S.-China tensions [2] - There is some skepticism regarding the company's aggressive growth forecasts for its automotive segment, particularly concerning the delayed launch of SUV models [2] - Goldman Sachs indicates that Xiaomi has not changed its plans for the YU7 model launch in June/July, maintaining a forecast of 400,000 units shipped by 2025 [3] Group 3 - The investigation report on recent accidents is expected to be released in early May, leading to anticipated tightening of regulations on Advanced Driver Assistance Systems (ADAS) marketing by the government [3] - Current ADAS systems in the market are believed to reach a maximum of L2+ level, with many automakers aggressively marketing these features as capable of achieving autonomous driving under various conditions [3] - The government is expected to enhance consumer education regarding ADAS limitations and provide clearer definitions of L2/L3/L4 levels [3]

Core Viewpoint - The performance of the China Hong Kong Stock Connect Preferred 50 Index has shown mixed results, with a recent increase of 1.7% but a decline of 12.84% over the past month [1]. Group 1: Index Performance - The China Hong Kong Stock Connect Preferred 50 Index closed at 2685.3 points with a trading volume of 73.428 billion [1]. - Over the past three months, the index has increased by 8.22%, and year-to-date, it has risen by 5.29% [1]. Group 2: Index Composition - The index is compiled by China Securities Index Co., Ltd. and reflects the overall performance of the top 50 blue-chip securities listed on the Hong Kong Stock Exchange [1]. - The top ten holdings in the index include Alibaba-W (11.76%), Tencent Holdings (10.28%), HSBC Holdings (10.21%), Meituan-W (6.25%), and others [1]. Group 3: Sector Allocation - The index is fully composed of stocks listed on the Hong Kong Stock Exchange, with the financial sector representing 37.01%, consumer discretionary at 27.48%, and communication services at 16.55% [2]. - Other sectors include information technology (7.69%), energy (3.86%), real estate (2.69%), utilities (1.85%), consumer staples (1.00%), healthcare (0.97%), and industrials (0.90%) [2].

Group 1: Market Overview - Northbound trading recorded a net buy of HKD 23.09 billion, with HK Stock Connect (Shanghai) contributing HKD 5.08 billion and HK Stock Connect (Shenzhen) contributing HKD 18.01 billion [1] - The most net bought stocks included Alibaba-W (09988), Tencent (00700), and Meituan-W (03690) [1][4] - The most net sold stocks were Yingfu Fund (02800), Xiaomi Group-W (01810), and CNOOC (00883) [1] Group 2: Stock Performance - Alibaba-W saw a net inflow of HKD 3.11 billion, with total trading volume of HKD 41.78 billion [2] - Xiaomi Group-W experienced a net outflow of HKD 6.15 billion, with total trading volume of HKD 35.74 billion [2] - Tencent recorded a net inflow of HKD 819.94 million, with total trading volume of HKD 31.70 billion [2] Group 3: Sector Insights - Morgan Stanley's report indicates that the impact of the US-China trade war on Chinese internet companies is mostly indirect, with an estimated effect on online consumption being less than 0.5% [4] - HSBC's research suggests that while the Chinese internet sector may experience volatility due to trade tensions, the direct impact from tariff policies is limited [4] Group 4: Company-Specific Developments - Giant Bio (02367) received a net buy of HKD 4.16 billion, planning to raise approximately HKD 22.94 billion through a discounted share placement for business development and working capital [5] - Pop Mart (09992) saw a net buy of HKD 2.27 billion, with a focus on global organizational restructuring to enhance its international strategy [5] - Xiaomi Group-W's recent financing plans include a HKD 425 billion share placement and a HKD 200 billion bond project, leading to significant net selling [7] Group 5: Commodity and Semiconductor Sector - Semiconductor stocks like Hua Hong Semiconductor (01347) and SMIC (00981) received net buys of HKD 1.97 billion and HKD 615 million respectively, amid favorable domestic policies [6] - The price of gold has reached a historical high of USD 3,350 per ounce, benefiting companies like Chifeng Jilong Gold Mining (06693) which saw a net buy of HKD 1.82 billion [6]