XIAOMI(HK:01810) KAIYUAN SECURITIES·2024-11-20 02:32Investment Rating - The investment rating for the company is "Buy" (maintained) [2] Core Views - The sustained momentum in the automotive sector and the high-end product strategy are expected to enhance the company's core profit and valuation [2] - Adjusted net profit estimates for 2024-2026 have been raised to 24.4 billion, 31.9 billion, and 43 billion respectively, reflecting year-on-year growth rates of 26%, 31%, and 35% [6] - The current stock price of HKD 28.3 corresponds to a PE ratio of 27.2, 20.7, and 15.4 for 2024-2026, indicating strong cash flow from core profits [6] Financial Performance Summary - In Q3 2024, adjusted net profit was 6.3 billion, a 4% year-on-year increase, with automotive losses narrowing to 1.5 billion [7] - Smartphone shipments increased to 43.1 million with a gross margin of 11.7% [7] - IoT revenue reached 26.1 billion with a gross margin of 20.8%, driven by a higher proportion of high-margin products [7] - Internet revenue was 8.5 billion, with a slight decline in gross margin to 77.5% due to reduced advertising margins [7] - Automotive sales approached 40,000 units, with an average selling price (ASP) increasing by 10,000 to 239,000, and a gross margin improvement to 17.1% [7] Future Outlook - For Q4 2024, adjusted net profit is projected at 5.4 billion, an 11% year-on-year increase, with core profit expected to be 6.5 billion [8] - The company anticipates smartphone shipments of approximately 170 million units in 2024, with ASP and gross margin expected to improve due to higher-end models and stabilized storage prices [8] - IoT revenue is expected to see slight growth in Q4 2024, benefiting from promotional activities and national subsidies [8] - The automotive segment aims for a target of 130,000 units in 2024, with Q4 shipments projected at 63,000 units, and ASP expected to rise due to the cancellation of equity incentives [8] Key Financial Metrics - Revenue for 2024 is estimated at 358.5 billion, with a year-on-year growth of 32.3% [10] - Net profit for 2024 is projected at 24.4 billion, reflecting a year-on-year increase of 26.4% [10] - Gross margin is expected to stabilize around 21% for the coming years [10] - The company’s return on equity (ROE) is forecasted to reach 12.9% in 2024, increasing to 18.1% by 2026 [10]