2024-08-23 02:11Investment Rating - The report maintains a "Buy" rating for Xiaomi Group with a target price of HKD 24.9, representing a potential upside of 42.1% from the recent closing price of HKD 17.5 [1][2]. Core Insights - Xiaomi Group's total revenue for Q2 2024 reached RMB 88.9 billion, a historical high, with a year-on-year growth of 32.0%. The smartphone, IoT, and internet services segments all showed rapid growth, while the smart electric vehicle segment contributed RMB 6.4 billion in revenue for the first time [1][2]. - The smartphone business saw a revenue increase of 27.1% year-on-year, with global shipments reaching 42.2 million units, marking a 28.1% increase and securing a 14.6% market share [1][2]. - The IoT and lifestyle products segment reported a revenue growth of 20.3% to RMB 26.8 billion, while internet services revenue grew by 11.0% to RMB 8.3 billion, both achieving historical highs [1][2]. - The smart electric vehicle segment had a revenue of RMB 6.4 billion in Q2 2024, with a gross margin of 15.4%. The company delivered 27,307 units of the Xiaomi SU7 series, with a net loss of RMB 1.8 billion, which was less than the previously expected loss of RMB 3 billion [1][2]. Financial Performance Summary - For Q2 2024, Xiaomi Group's operating expenses decreased by 1.0 percentage point to 14.2%, indicating improved operational efficiency. Adjusted net profit for the quarter increased by 20.1% year-on-year to RMB 6.2 billion, exceeding market expectations [1][2]. - The gross margin for the internet business reached 78.3%, up 4.2 percentage points year-on-year, while the IoT business gross margin was 19.7%, up 2.1 percentage points [1][2]. - The report forecasts continued revenue growth, with projected revenues of RMB 86.7 billion for Q3 2024 and RMB 90.1 billion for Q4 2024, reflecting year-on-year growth rates of 22.2% and 23.0%, respectively [3][4].