Core Insights - Xiaomi reported a significant increase in annual revenue, driven by strong smartphone sales and an expansion into the electric vehicle (EV) market [1][2] - The company's total revenue for the last year was 365.9 billion yuan ($50.6 billion), marking a 35% increase from the previous year [2] - In the fourth quarter of 2024, revenue grew by 48.8% year-on-year, surpassing Bloomberg's forecast of 43% [2][3] Revenue Breakdown - Revenue from electric vehicles and other new initiatives reached 32.8 billion yuan last year, while traditional smartphone sales accounted for the majority at 333.2 billion yuan [4] - The company aims to deliver 350,000 vehicles in 2025, having already delivered 136,854 units of the SU7 Series in 2024 [3][4] Market Context - Xiaomi's performance is seen as a barometer for consumer sentiment in China, especially as the government implements measures to stabilize the economy and boost consumer spending [2][6] - State subsidies for personal electronics and home appliances are expected to benefit Xiaomi, given its strong market presence in these categories [6]

Financial Performance - For the fiscal year ending December 31, 2024, Xiaomi Corporation reported total revenue of RMB 365.9 billion, a year-on-year increase of 35.0%[6]. - The adjusted net profit for the same period reached RMB 27.2 billion, marking a 41.3% increase compared to the previous year[6]. - In Q4 2024, Xiaomi's total revenue surpassed RMB 100 billion for the first time in a single quarter, reaching RMB 109 billion, a 48.8% year-on-year growth[7]. - The net profit for the year increased by 34.9% from RMB 17.5 billion for the year ending December 31, 2023, to RMB 23.6 billion for the year ending December 31, 2024[71]. - The adjusted net profit for the year ended December 31, 2024, was RMB 27.2 billion, compared to RMB 19.3 billion for the previous year[35]. - The total revenue for the year ended December 31, 2024, increased by 35.0% to RMB 365.9 billion, compared to RMB 271.0 billion for the year ended December 31, 2023[37]. - The company reported a profit of RMB 23,578,449 thousand for the fiscal year ending December 31, 2024, reflecting a significant increase in operational performance[164]. - Total comprehensive income for the year amounted to RMB 24,338,685 thousand, up from RMB 18,510,061 thousand in 2023, reflecting a growth of 31.4%[189]. Revenue Breakdown - The company's smartphone business generated revenue of RMB 191.8 billion in 2024, up 21.8% year-on-year, with a gross margin of 12.6%[17]. - The IoT and lifestyle consumer products segment achieved revenue of RMB 104.1 billion, a 30.0% year-on-year increase, with a gross margin of 20.3%[21]. - The revenue from the "Smart Electric Vehicles and Innovative Businesses" segment was RMB 32.8 billion for the fiscal year 2024[7]. - The "Mobile × AIoT" segment revenue grew by 22.9% year-on-year to RMB 333.2 billion, with a gross margin of 21.2%[16]. - The internet services revenue reached RMB 34.1 billion in 2024, a year-on-year increase of 13.3%, with a gross margin of 76.6%[25]. - Revenue from the smart electric vehicle and innovative business segment for Q4 2024 was RMB 16.7 billion, with 69,697 units of the Xiaomi SU7 series delivered, resulting in an ASP of RMB 234,322 per vehicle[83]. User and Market Metrics - The number of active users globally reached 702.3 million by December 2024, reflecting a 9.5% year-on-year increase[8]. - Xiaomi's AIoT platform connected 904.6 million IoT devices by the end of 2024, a 22.3% year-on-year growth[8]. - The company achieved a smartphone market share of 13.8% globally, an increase of 1.0 percentage points year-on-year[8]. - In the high-end smartphone segment in mainland China, Xiaomi's shipment volume accounted for 23.3% of total smartphone shipments, up 3.0 percentage points year-on-year[12]. - The company's offline retail store count in mainland China approached 15,000 by the end of 2024, with a market share of 10.3% in offline smartphone channels[14]. Research and Development - Xiaomi's R&D expenditure for 2024 was RMB 24.1 billion, a 25.9% increase from the previous year, with R&D personnel accounting for 48.5% of total employees[10]. - R&D expenses increased by 25.9% from RMB 19.1 billion for the year ending December 31, 2023, to RMB 24.1 billion for the year ending December 31, 2024, primarily due to increased spending related to innovative businesses such as smart electric vehicles[61]. - R&D expenses increased by 36.1% from RMB 5.5 billion in Q4 2023 to RMB 7.4 billion in Q4 2024, driven by higher personnel costs and R&D related to smart electric vehicles[103]. Cost and Profitability - Total sales cost increased by 35.5% from RMB 213.5 billion to RMB 289.3 billion, with smartphone and IoT sales costs rising significantly[50]. - Gross profit increased by 33.2% from RMB 57.5 billion to RMB 76.6 billion, while gross margin slightly decreased from 21.2% to 20.9%[56]. - The gross margin for the "Smart Electric Vehicle and Innovative Business" segment was 18.5% for 2024, improving to 20.4% in Q4 2024[28]. - The gross margin for IoT and consumer products improved from 16.3% to 20.3%, driven by higher margins from wearables and smart appliances[58]. Cash Flow and Investments - Cash and cash equivalents as of December 31, 2024, amounted to RMB 33.7 billion[166]. - The net cash generated from operating activities was RMB 39,295,499 thousand, down from RMB 41,300,495 thousand in 2023, a decrease of 4.9%[195]. - The net cash used in investing activities for Q4 2024 was RMB 29.1 billion, primarily due to an increase in long-term bank deposits of RMB 18.2 billion and short-term investments of RMB 8.6 billion[172]. - The total value of investments as of December 31, 2024, was RMB 71.4 billion, reflecting a 1.7% year-on-year increase[177]. Debt and Financing - The company issued USD 600 million 3.375% senior notes due 2030, guaranteed unconditionally by the company[167]. - The company also issued USD 800 million 2.875% senior notes due 2031 and USD 400 million 4.100% green senior notes due 2051, both guaranteed by the company[168]. - As of December 31, 2024, total borrowings amounted to RMB 30.6 billion[174]. - The company reported a net cash outflow from financing activities of RMB 3,998,976 thousand in 2024, compared to RMB 504,972 thousand in 2023, indicating increased investment in growth initiatives[195].

Group 1 - Xiaomi plans to sell its electric vehicles (EVs) outside of China within the next few years, indicating its ambition to compete in the global EV market against established players like Tesla [2] - The company launched its first luxury EV, the SU7 Ultra, in China, priced at 529,000 Chinese yuan (approximately $72,627), and received 15,000 orders within 24 hours of its launch [3] - The announcement was made by Xiaomi's President William Lu during the Mobile World Congress in Barcelona, highlighting the company's excitement about expanding its EV offerings to global markets [2][3] Group 2 - The SU7 Ultra will be officially launched on the evening of February 27, 2025, and will be showcased at Xiaomi's booth at the Mobile World Congress [1][3] - While specific timelines for international sales were not provided, the comments from the company reflect a strategic move to enhance its presence in the competitive EV landscape [2]

Core Insights - Xiaomi is successfully transitioning to premium devices, targeting affluent European consumers, as it aims to compete with market leader Samsung [1][3] - The Xiaomi 15 and Xiaomi 15 Ultra smartphones feature Qualcomm's Snapdragon 8 Elite Mobile Platform, with prices starting at 999 euros ($1,047) and 1,499 euros ($1,571) respectively [2] - In 2024, Xiaomi's global smartphone shipments increased by 15.4% year-on-year, raising its market share to 13.6% from 12.5% in 2023 [3] Company Strategy - Xiaomi began in 2010 with low-to-mid price smartphones and has since expanded internationally, focusing on the European market [4] - The company has diversified its portfolio to include connected devices and recently entered the electric vehicle market with the SU7 [5] - The electric vehicle initiative is enhancing Xiaomi's brand perception, leveraging the innovation associated with automotive development [5][6] Market Performance - Xiaomi's stock has surged nearly 300% in the past year, driven by a recovery in the smartphone sector and the success of its electric vehicle [6] - The company's shares reached a record high recently, with expectations to maintain momentum through new smartphone launches and the SU7 Ultra electric car [7] Competitive Landscape - Xiaomi faces significant competition in the premium smartphone market, particularly from Samsung and other Chinese brands like Oppo and Honor [7][8] - The premium smartphone segment is becoming increasingly crowded, making it challenging for Xiaomi to gain market share from established players [8]

Group 1 - The article highlights twelve actionable investment ideas on tickers that have less coverage, which can include both large caps and small caps [1] - The criteria for being classified as "undercovered" include a market cap greater than $100 million, over 800 symbol page views in the last 90 days on Seeking Alpha, and fewer than two articles published in the past 30 days [1] - Following this account will provide a weekly review of these undercovered investment ideas from analysts [1]

Group 1 - Xiaomi Group's stock price reached a new high of 50.9 HKD, with a market capitalization of 1.27 trillion HKD, before experiencing a slight decline [1] - The company's market value surpassed 1 trillion HKD in early February, entering the global top 100 by market capitalization, compared to around 12 HKD at the beginning of 2024 [1] - The focus remains on Xiaomi's mobile and automotive businesses, with upcoming product launches generating significant market interest [1] Group 2 - Xiaomi's CEO Lei Jun indicated that the new Xiaomi 15 Ultra will likely see a price increase due to rising R&D and component costs, with the previous model priced at 6499 RMB [2] - Several financial institutions have maintained a "buy" rating for Xiaomi, with target prices ranging from 38 to 57.74 HKD, indicating a bullish outlook [2] - Citigroup has removed Xiaomi from its "most buyable" list following the stock's recent rise, while also adjusting the Hang Seng Index targets upward [2] Group 3 - Analysts express a significant divergence in Xiaomi's valuation, suggesting that the stock may already reflect future earnings, and comparisons are being made to the past performance of leading new energy vehicle companies [3] - Future performance will depend on Xiaomi's hardware gross margins and the profitability contributions from its ecosystem companies [3]

Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of 57.74 HKD [4][10][7]. Core Views - The company is expected to achieve earnings per share of 0.84, 1.06, and 1.37 CNY for the years 2024, 2025, and 2026 respectively, reflecting an upward adjustment in revenue and gross margin forecasts due to the positive industry outlook and the company's strategic initiatives [4][10]. - The automotive segment has shown strong performance with monthly deliveries exceeding 20,000 units, maintaining a long delivery cycle of 6-7 months [9][10]. - The integration of the DeepSeek large model into the company's operating system enhances its AI capabilities, allowing for various applications such as code writing and logical reasoning [9][10]. Financial Summary - Revenue projections for 2024, 2025, and 2026 are 362,463 million CNY, 406,553 million CNY, and 475,075 million CNY respectively, indicating a growth rate of 34%, 12%, and 17% [6][10]. - Operating profit is forecasted to be 22,944 million CNY, 29,430 million CNY, and 38,863 million CNY for 2024, 2025, and 2026, with significant growth rates of 15%, 28%, and 32% [6][10]. - The net profit attributable to the parent company is expected to reach 20,996 million CNY, 26,528 million CNY, and 34,418 million CNY for the same years, with growth rates of 20%, 26%, and 30% [6][10]. - The gross margin is projected to be 21.0%, 21.8%, and 22.7% for 2024, 2025, and 2026, while the net margin is expected to be 5.8%, 6.5%, and 7.2% [6][10].

Investment Rating - The report maintains a "Buy" rating for the company [4][10][7] Core Insights - The company is projected to have earnings per share of 0.84, 1.06, and 1.37 RMB for the years 2024, 2025, and 2026 respectively, with adjustments made to revenue and gross margin forecasts [4][10] - The target price is set at 57.74 HKD based on a 39x PE valuation for comparable companies in 2026 [4][10] Financial Performance Summary - Revenue (in million RMB) is forecasted to be 362,463 in 2024, 406,553 in 2025, and 475,075 in 2026, reflecting growth rates of 34%, 12%, and 17% respectively [6] - Operating profit is expected to rise significantly from 20,009 million RMB in 2023 to 38,863 million RMB in 2026, with corresponding growth rates of 610%, 15%, 28%, and 32% [6] - Net profit attributable to the parent company is projected to increase from 17,475 million RMB in 2023 to 34,418 million RMB in 2026, with growth rates of 606%, 20%, 26%, and 30% [6] - The gross margin is expected to stabilize around 21.0% to 22.7% from 2024 to 2026 [6] Market Position and Product Performance - The company maintained its position as the third-largest smartphone vendor globally, with a market share of 13% in Q4 2024 and an annual shipment of approximately 169 million units [9] - The company has seen significant growth in its AIoT product categories, with notable increases in sales for various smart home appliances [9] - The automotive segment has delivered over 160,000 vehicles, maintaining a monthly delivery rate of over 20,000 units [9]

Investment Rating - The report maintains a "Buy" rating for Xiaomi Group [3][6]. Core Views - Xiaomi Group's smartphone shipments reached 42.7 million units in Q4 2024, marking a 4.8% year-on-year increase, with a global market share of 12.9%, positioning it among the top three manufacturers [1]. - In the Chinese market, Xiaomi's smartphone shipments grew by 28.4% year-on-year, driven by the success of the Xiaomi 15 series and local subsidies for high-end devices [1]. - The IoT business is expected to benefit from the 2024 appliance replacement subsidy policy, leading to significant revenue growth [2]. - The automotive segment delivered 135,000 units in 2024, with a target of 300,000 units for 2025, indicating strong growth potential [2][3]. Financial Summary - Revenue projections for 2024-2026 are estimated at CNY 362.9 billion, CNY 456.2 billion, and CNY 596.8 billion, representing year-on-year growth rates of 34%, 26%, and 31% respectively [3][11]. - Adjusted net profit for the consumer electronics segment is forecasted to be CNY 32.1 billion in 2025, with a growth rate of 10% [3][11]. - The automotive segment is expected to show a turnaround with an adjusted net profit of CNY 0.9 billion by 2026 [3][11]. - The report sets a target price of HKD 54 for Xiaomi Group based on a 20x P/E ratio for the consumer electronics business and a 2x P/S ratio for the automotive segment [3].

Investment Rating - The report maintains a "Buy" rating for Xiaomi Group [6] Core Views - Xiaomi Group is expected to achieve a total revenue of 105.4 billion RMB in Q4 2024, representing a year-on-year increase of 44% [1] - Non-IFRS net profit for Q4 2024 is projected to grow by 36% year-on-year to 6.7 billion RMB, with losses from innovative businesses like electric vehicles expected to decrease to around 900 million RMB [1] - The report anticipates strong performance in Xiaomi's core businesses, particularly in smartphones, IoT, and automotive sectors, leading to an upward revision of profit forecasts for 2024-2026 [5] Summary by Sections Revenue and Profit Forecast - Q4 2024 total revenue is expected to reach 105.4 billion RMB, a 44% increase year-on-year [1] - Non-IFRS net profit is projected at 6.7 billion RMB, a 36% increase year-on-year [1] - Revenue for 2024 is forecasted at 361.9 billion RMB, with a growth rate of 33.6% [10] Smartphone Business - Global smartphone shipments are expected to grow by 5% year-on-year to 42.7 million units in Q4 2024, with a significant 29% increase in shipments in China [2] - The average selling price (ASP) of smartphones is anticipated to rise due to government subsidies and the launch of the Xiaomi 15 series [2] - The smartphone business gross margin is expected to improve to around 12% in Q4 2024 [2] IoT and Internet Services - IoT revenue is projected to exceed 30 billion RMB in Q4 2024, a nearly 50% year-on-year increase, driven by government subsidies for home appliances [3] - Internet services revenue is expected to rise by 16% year-on-year to 9.2 billion RMB, marking a significant milestone of surpassing 9 billion RMB in a single quarter [3] Automotive Sector - The automotive gross margin is expected to approach 20% in Q4 2024, with deliveries of the SU7 Ultra model set to begin [4] - Xiaomi is projected to deliver over 135,000 vehicles in 2024, with Q4 deliveries estimated at 68,000 units [4] - The automotive business is expected to turn profitable in 2025, supported by improved production capacity and demand [4] Valuation and Profitability - The report revises the Non-IFRS net profit forecasts for 2024-2026 to 25.7 billion RMB, 41.0 billion RMB, and 56.7 billion RMB respectively, reflecting significant upward adjustments [5] - The adjusted P/E ratio is projected to decrease from 123 in 2022 to 19 in 2026, indicating improved valuation metrics [5]