Investment Rating - The report maintains a "Buy" rating for Xiaomi Group with a target price of HKD 24.0, representing a potential upside of 31.1% from the recent closing price of HKD 18.3 [2][3]. Core Insights - Xiaomi Group's Q1 2024 total revenue increased significantly by 27% year-on-year to RMB 75.5 billion, surpassing Bloomberg's consensus estimate of RMB 73.4 billion. The overall gross margin improved by 2.8 percentage points to 22.3% [1]. - Adjusted net profit for Q1 2024 grew by 100.8% year-on-year to RMB 6.5 billion, exceeding the market expectation of RMB 5.1 billion, despite incurring RMB 2.3 billion in expenses related to its automotive innovation business [1]. - The report highlights the successful launch of Xiaomi's first electric vehicle, the Xiaomi SU7 series, which has received strong market demand with 10,000 units delivered by mid-May 2024 [1]. Summary by Sections Smartphone Business - In Q1 2024, Xiaomi ranked third globally in smartphone shipments with a market share of 13.8%, shipping 40.6 million units, a year-on-year increase of 33.7%, outperforming the global smartphone market's growth of 9.8% [1]. - Revenue from the smartphone segment reached RMB 46.5 billion, up 32.9% year-on-year, with the average selling price (ASP) slightly decreasing by 0.6% to RMB 1,144 due to increased overseas market revenue [1]. Internet and IoT Services - Internet services revenue hit a record high of RMB 8 billion in Q1 2024, growing 14.5% year-on-year, with a gross margin of 74.2%, up 1.9 percentage points [1]. - Revenue from IoT and lifestyle products reached RMB 20.4 billion, a 21.0% year-on-year increase, with a gross margin of 19.9%, marking a significant improvement of 4.1 percentage points [1]. Automotive Business - The automotive business commenced successfully with the launch of the Xiaomi SU7 series, achieving 10,000 deliveries by May 15, 2024, and aiming for monthly deliveries exceeding 10,000 units by June 2024 [1]. - The report emphasizes the need to monitor the production capacity expansion plans for Xiaomi's automotive segment [1].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 22.80 HKD, compared to the current price of 18.30 HKD [4]. Core Insights - The company achieved a record high adjusted net profit margin in Q1 2024, with a significant year-on-year revenue increase of 27% to 755 billion RMB. The three core business segments—smartphones, IoT, and internet services—showed strong growth, with revenues increasing by 32.9%, 21.0%, and 14.5% respectively [2][3]. - The SU7 electric vehicle model has received over 88,000 pre-orders, with a target of delivering 120,000 units for the year [3]. Summary by Sections Financial Performance - Q1 2024 revenue reached 755 billion RMB, up 27% year-on-year. The adjusted net profit was 6.5 billion RMB, marking a 100.8% increase, with a historical high net profit margin of 8.6% [2]. - The smartphone segment generated 465 billion RMB in revenue, with a shipment volume of 4.06 million units, reflecting a 33.7% year-on-year increase [2][3]. - IoT revenue grew by 21.0% to 204 billion RMB, achieving a record high gross margin of 19.9% [2]. - Internet services revenue increased by 14.5% to 80 billion RMB, with a gross margin of 74.2% [2]. Business Segments - The smartphone business saw a gross margin of 14.8%, despite a slight decline due to increased BOM costs and inventory provisions. The expected gross margin for the smartphone segment for the full year is projected to be between 12-13% [2]. - The IoT segment's strong performance is attributed to high-margin products such as tablets and smart appliances, with expectations for a gross margin above 18% for the year [2]. - The internet services segment is expected to benefit from an increasing global user base and higher-end device sales, driving revenue growth [2]. Future Outlook - The company has adjusted its profit forecasts for 2024, 2025, and 2026, increasing the Non-IFRs net profit estimates to 16.6 billion, 18.3 billion, and 21 billion RMB respectively [3]. - The report anticipates continued growth driven by the successful launch of the SU7 and improvements in the company's core business operations [3].

Investment Rating - The report maintains a "Buy" rating for the company, with a target price of HKD 22.80, compared to the current price of HKD 18.30 [4]. Core Insights - The company reported a record high adjusted net profit margin of 8.6% in Q1 2024, with a non-IFRS net profit of CNY 6.5 billion, representing a year-on-year growth of 100.8% [2][3]. - Revenue for Q1 2024 reached CNY 75.5 billion, a 27% increase year-on-year, driven by strong growth across its three core business segments: smartphones, IoT, and internet services [2][3]. - The company aims to deliver 120,000 units of its new electric vehicle model, SU7, in 2024, with over 88,000 pre-orders already secured [3]. Summary by Sections Financial Performance - Q1 2024 revenue was CNY 75.5 billion, with smartphone, IoT, and internet service revenues increasing by 32.9%, 21.0%, and 14.5% year-on-year, respectively [2]. - The gross margin for Q1 2024 was 22.3%, with a historical high non-IFRS net profit margin of 8.6% [2][3]. - The smartphone business generated CNY 46.5 billion in revenue, with a gross margin of 14.8%, despite a slight decline in average selling price (ASP) [2][3]. Business Segments - IoT revenue grew to CNY 20.4 billion in Q1 2024, with a gross margin of 19.9%, marking a historical high [2]. - Internet services revenue reached CNY 8 billion, with a gross margin of 74.2%, driven by a 25% increase in advertising revenue [2]. Future Outlook - The company expects smartphone gross margins to stabilize between 12-13% for the full year 2024, despite potential fluctuations during promotional periods [2]. - The IoT segment is projected to maintain a gross margin above 18% for 2024, supported by strong sales of high-margin products [2]. - The internet services segment is anticipated to benefit from an increasing global user base and enhanced monetization capabilities [2].

Investment Rating - The report maintains a "Buy" rating for Xiaomi Group [1] Core Views - Xiaomi Group's Q1 2024 performance exceeded market expectations, with total revenue reaching 75.5 billion RMB, a year-on-year increase of 27%, and adjusted net profit hitting 6.5 billion RMB, a year-on-year increase of 101%, marking a historical high [2][3] Financial Performance Summary - **Total Revenue (Million RMB)**: - 2022A: 280,044 - 2023A: 270,970 - 2024E: 329,333 (21.54% YoY growth) - 2025E: 364,684 (10.73% YoY growth) - 2026E: 400,121 (9.72% YoY growth) [2] - **Net Profit Attributable to Shareholders (Million RMB)**: - 2022A: 2,474 - 2023A: 17,475 - 2024E: 16,130 (-7.70% YoY) - 2025E: 19,692 (22.08% YoY growth) - 2026E: 22,578 (14.65% YoY growth) [2] - **Latest Diluted EPS (RMB/share)**: - 2022A: 0.10 - 2023A: 0.70 - 2024E: 0.65 - 2025E: 0.79 - 2026E: 0.90 [2] Business Segment Performance - **Smartphone Business**: - Q1 revenue reached 46.5 billion RMB, a year-on-year increase of 33%, with a gross margin of 14.8%, up 3.6 percentage points YoY. The company shipped 40.6 million units, a 34% increase YoY, significantly surpassing the global average growth rate of 9.8% [3] - **IoT and Internet Business**: - IoT and lifestyle product revenue for Q1 was 20.4 billion RMB, a year-on-year increase of 21%, with a gross margin of 19.9%, a historical high. The internet business revenue reached 8 billion RMB, a historical high, with a year-on-year increase of 15% and a gross margin of 74.2% [4] Strategic Outlook - The company aims to deliver 100,000 vehicles this year, with a target of 120,000. As of April 30, the cumulative orders for the SU7 model reached 88,063 units. The company plans to expand its sales network to cover 46 cities by the end of the year [5] Earnings Forecast and Investment Rating - The forecast for net profit attributable to shareholders for 2024-2026 has been adjusted to 16.1 billion, 19.7 billion, and 22.6 billion RMB respectively. The latest closing price corresponds to P/E ratios of 28.3, 23.2, and 20.0 times for 2024, 2025, and 2026 [5]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company reported Q1 2024 earnings that exceeded market expectations, achieving revenue of 75.5 billion RMB, a year-on-year increase of 27%, and an adjusted net profit of 6.5 billion RMB, a year-on-year increase of 101%, marking a historical high [2][3] Summary by Sections Mobile Business - In Q1, the mobile business generated revenue of 46.5 billion RMB, a year-on-year increase of 33%, with a gross margin of 14.8%, up 3.6 percentage points year-on-year. The company shipped 40.6 million smartphones, a year-on-year increase of 34%, significantly outperforming the global average growth rate of 9.8%. The market share stood at 13.8%, maintaining a position among the top three globally for fifteen consecutive quarters [3] IoT and Internet Business - The IoT and lifestyle consumer products segment achieved revenue of 20.4 billion RMB in Q1, a year-on-year increase of 21%, with a gross margin of 19.9%, a historical high, up 4.1 percentage points year-on-year. Key categories showed healthy growth, with TWS shipments ranking second globally and first in mainland China. Wearable product shipments in mainland China increased by 70%, while tablet shipments globally rose by 93%, and smart home appliance revenue grew by 46% [4] - The internet business generated revenue of 8 billion RMB in Q1, a historical high, with a year-on-year increase of 15% and a gross margin of 74.2%, up 1.9 percentage points year-on-year. Advertising revenue was 5.5 billion RMB, and gaming revenue was 1.2 billion RMB. The user base continues to expand, with monthly active users reaching a historical high, creating a positive ecosystem with the mobile and IoT businesses [4] Automotive Business - As of April 30, the company had accumulated 88,063 orders for the SU7 model. The target for this year is to ensure the delivery of 100,000 vehicles, with aspirations to deliver 120,000. Starting in June, the company will implement a double-shift system in its factories, aiming to deliver at least 10,000 vehicles that month. The sales network will also be expanded, with plans to cover 46 cities with 219 stores and 86 cities with 143 service centers by the end of the year [5] Earnings Forecast and Investment Rating - The earnings forecast for the company has been adjusted upwards for 2024-2026, with expected net profits of 16.1 billion, 19.7 billion, and 22.6 billion RMB respectively. The latest closing price corresponds to P/E ratios of 28.3, 23.2, and 20.0 for the respective years, maintaining a "Buy" rating [5]

Investment Rating - The investment rating for Xiaomi Group-W (01810.HK) is maintained as "Buy" [2][3][10] Core Views - The sustained upward momentum in the automotive sector, along with high-end product strategies and export growth, is expected to enhance the long-term outlook for the company [3] - The expansion of the IoT business scale and gross margin has exceeded expectations, while short-term losses in innovative sectors like automotive are anticipated to be lower than market expectations [4][5] - The adjusted net profit forecasts for 2024-2026 are 20.3 billion, 22.7 billion, and 21.9 billion RMB, reflecting year-on-year growth rates of 5.3%, 11.9%, and -3.8% respectively [3][6] Summary by Relevant Sections Financial Performance - In Q1 2024, the company reported revenue of 75.5 billion RMB, a year-on-year increase of 27%, and an adjusted net profit of 6.5 billion RMB, up 100.8% year-on-year [4] - The mobile business generated revenue of 46.5 billion RMB, a 32.9% increase year-on-year, while the IoT business revenue reached 20.4 billion RMB, growing 21% year-on-year [4] - The gross margin for the IoT business improved to 19.9%, up 4.2 percentage points year-on-year, driven by a focus on high-margin products [4] Future Projections - The company expects mobile shipments in 2024 to be between 160 million and 165 million units, with a projected gross margin of 12-13% [5] - IoT business revenue growth is anticipated to slightly exceed 10% in 2024, supported by seasonal demand for home appliances and traditional marketing peaks [5] - The automotive sector's losses are expected to be lower than market forecasts due to sufficient prior orders and faster-than-expected production ramp-up [5] Valuation Metrics - The current stock price of 18.94 HKD corresponds to P/E ratios of 22.4, 20.0, and 20.8 for the years 2024-2026 [3][6] - The projected operating revenue for 2024 is 337.17 billion RMB, with a year-on-year growth of 24.4% [6] - The net profit for 2024 is expected to be 20.3 billion RMB, reflecting a 5.3% increase year-on-year [6]

Investment Rating - The report maintains a "Buy" rating for the company, with a target price (TP) raised to HKD 25.39 from the previous HKD 23.77, indicating a potential upside of 34% from the current price of HKD 18.94 [2][3][17]. Core Insights - The company reported a strong first quarter with revenue and net profit growth of 27% and 101% year-on-year, respectively, driven by improved gross profit margins (GPM) and a better revenue mix [2][12]. - The company aims to deliver 120 electric vehicles (EVs) annually, up from a previous target of 100, and plans to expand its retail strategy significantly in China [2][12]. - The report anticipates continued growth in smartphone market share, AIoT sales strength, and overseas internet revenue, contributing to profit growth through FY24E - FY26E [2][12][13]. Financial Summary - Revenue is projected to grow from HKD 270,970 million in FY23A to HKD 337,161 million in FY24E, reflecting a year-on-year growth of 24.4% [3][16]. - Adjusted net profit is expected to increase from HKD 19,273 million in FY23A to HKD 22,974 million in FY24E, representing a growth of 19.2% [3][16]. - The adjusted earnings per share (EPS) is forecasted to rise from RMB 0.77 in FY23A to RMB 0.92 in FY24E, with a price-to-earnings (P/E) ratio of 19.0x for FY24E [3][16]. Segment Performance - Smartphone revenue is expected to reach HKD 185,020 million in FY24E, with a year-on-year growth of 18% [12][16]. - AIoT and lifestyle products are projected to generate HKD 93,264 million in FY24E, reflecting a growth of 16% [12][16]. - Internet services are anticipated to contribute HKD 32,856 million in FY24E, with a year-on-year growth of 9% [12][16]. Valuation and Catalysts - The report assigns a valuation multiple of 15x FY24E P/E for the smartphone, AIoT, and internet businesses, while the EV business is valued at 0.75x FY25E P/S [17]. - Upcoming catalysts include progress in EV deliveries and growth in smartphone market share [2][17].

Investment Rating - The report maintains a "BUY" rating for Xiaomi with a new target price (TP) of HK$25.39, reflecting a 34% upside from the current price of HK$18.94 [2][18]. Core Insights - Xiaomi's 1Q24 results exceeded expectations, with revenue and net profit growing 27% and 101% year-over-year (YoY), respectively, driven by improved gross profit margins (GPM) and a favorable revenue mix [2][14]. - The company has set an ambitious target of 120,000 annual electric vehicle (EV) deliveries, up from the previous guidance of 100,000, indicating strong growth potential in the EV segment [2][18]. - The report anticipates continued earnings growth for Xiaomi, supported by smartphone market share gains, robust AIoT sales, and increasing overseas internet revenue [2][14]. Financial Summary - Revenue for FY24E is projected at RMB 337,161 million, representing a 24.4% YoY growth, with adjusted net profit expected to reach RMB 22,974 million, a 19.2% increase YoY [3][24]. - The adjusted EPS for FY24E is forecasted at RMB 0.92, significantly above consensus estimates [3][16]. - Gross margin is expected to be 21.1% for FY24E, reflecting a slight improvement from previous years [3][15]. Segment Performance - Smartphone revenue is projected to grow by 18% YoY in FY24E, driven by a 33.7% increase in global smartphone shipments in 1Q24 [2][13]. - AIoT and lifestyle products are expected to see a revenue increase of 21% YoY in FY24E, supported by strong sales in various product categories [2][13]. - Internet services revenue is anticipated to grow by 15% YoY in FY24E, indicating a solid performance in this segment [2][13]. Valuation - The report employs a sum-of-the-parts (SOTP) valuation method, assigning a P/E multiple of 15x to Xiaomi's smartphone, AIoT, and internet businesses, while the EV business is valued at 0.75x FY25E price-to-sales (P/S) [18][19]. - The total valuation for Xiaomi is estimated at RMB 581,175 million, translating to a target price of HK$25.39 per share [19][18].

Financial Data and Key Metrics - Revenue for Q1 2024 reached JPY75.5 billion, a 27% year-on-year growth [5] - Adjusted net profit was JPY6.5 billion, a 100.8% year-on-year increase [5] - Gross profit margin grew to 20.3% [5] - Cash resources stood at JPY127.3 billion [5] - Core profit achieved new highs [5] Business Line Data and Key Metrics - Smartphone business accounted for 61% of total revenue, with a 3.6% year-on-year growth [13] - IoT business revenue was JPY20.4 billion, up 21% year-on-year, with gross margin improving to 19.9% [14] - Internet services revenue reached JPY8 billion, a 45% year-on-year increase [15] - Overseas Internet business grew by 40%, contributing RMB2.5 billion [15] Market Data and Key Metrics - In the Middle East, market share grew by 7.1% to 20.9% [6] - Africa market share reached 10.6%, up 4.5% [6] - Southeast Asia market share was 16.5%, while Latin America reached 15.3%, up 2% [6] - Xiaomi ranked top three in 63 countries and top five in 67 markets [5] Company Strategy and Industry Competition - Xiaomi EV business launched successfully, with over 7,500 deliveries in April and 10,000 by mid-April [7] - The company plans to expand Xiaomi Home stores to 20,000 by 2026 [10] - Premiumization strategy in Mainland China has been completed, targeting the 4,000 to 5,000 market sector [10] - Xiaomi aims to achieve 100% renewable power usage by 2035 and carbon neutrality by 2040 [16] Management Commentary on Operating Environment and Future Outlook - Despite external uncertainties, Xiaomi's business remains stable and efficient [4] - The company is confident in overcoming challenges such as rising core component costs [12] - Xiaomi expects to deliver excellent results in 2024 due to improved capabilities [12] Other Important Information - Xiaomi repurchased RMB2.25 billion worth of shares, exceeding the total for 2023 [15] - The company has set ESG targets, including 30% reduction in emissions by 2030 and 100% renewable energy usage by 2035 [16] Q&A Session Summary Question: Synergy between EV, smartphone, and IoT businesses [20] - Xiaomi leverages its experience in consumer electronics and technology to enhance EV business [21] - The company focuses on customer stickiness and ecosystem integration to drive synergies [22] Question: Smartphone gross margin and cost control [23] - Xiaomi manages cost pressures through strategic inventory management and product structure optimization [24] - The company's scale and efficiency help mitigate the impact of rising component costs [25] Question: New retail expansion and overseas Internet business growth [27] - Xiaomi plans to expand its retail stores to 20,000 by 2026, focusing on upgrading existing stores and improving efficiency [28] - Overseas Internet business growth is driven by increased shipments and new customer acquisitions [33] Question: IoT gross margin and overseas expansion [35] - Xiaomi's IoT strategy focuses on self-research and product optimization, leading to improved gross margins [36] - The company plans to expand IoT products globally, focusing on compliance and market matching [39] Question: EV business delivery challenges and gross margin [41] - Xiaomi faces delivery challenges due to high demand, with delivery times extending to 30 weeks [42] - The company aims to double productivity by June to meet delivery targets [43] - Gross margin for EV business is expected to be between 5% to 10%, with more accurate targets to be set in Q2 [60] Question: Smartphone premiumization and inventory levels [45] - Xiaomi's premiumization strategy has shown success, with market share growth in the 5,000 to 6,000 price segment [46] - Inventory growth is attributed to strategic stocking, founder edition EV production, and preparation for peak seasons [47] Question: Middle East market growth and AI strategy [49] - Xiaomi's Middle East market grew by 113.3%, driven by strategic adjustments and human resource optimization [50] - The company focuses on AI integration in products and manufacturing efficiency, with plans to leverage AI for future growth [55] Question: IoT channel strategies in North America and Japan [57] - Xiaomi's IoT strategy in overseas markets focuses on cost efficiency and value for money, leveraging its own network and local platforms [58]

Xiaomi Corporation Q1 2024 Results Announcement Disclaimer By attending the meeting where this presentation is made, or by reading the presentation materials, you agree to be bound by the following limitations: The information in this presentation has been prepared by representatives of Xiaomi Corporation (the "Company", and together with its subsidiaries, the "Group") for use in presentations by the Group and does not constitute a recommendation regarding the securities of the Group. No part of this presen ...