XIAOMI(01810) 华泰证券·2024-11-20 08:05Investment Rating - Maintains a "Buy" rating with a target price of HKD 36.00 [1][4] Core Views - Xiaomi's 3Q24 revenue grew by 30% YoY, with smartphone xAIoT business revenue increasing by 16.8% YoY and non-GAAP net profit rising by 4%, exceeding expectations by 3% [1] - The automotive and IoT businesses achieved record-high gross margins, with automotive gross margin at 17.1%, surpassing the industry average of 16.27% for BYD, NIO, XPeng, and Li Auto in 2Q24 [1] - IoT gross margin increased by 1 percentage point QoQ to 20.8%, driven by product innovation, organizational reforms, and channel development [1] - The company expects SUV launch in 2025Q1 to drive rapid revenue growth, with smartphone gross margin recovery and reduced automotive losses contributing to a 55% non-GAAP profit growth in 2025 [1] Automotive Business - Automotive revenue in 3Q24 reached RMB 9.7 billion, with 39,800 units delivered at an average price of RMB 238,700 [2] - Gross margin for the automotive business improved by 1.7 percentage points QoQ to 17.1%, attributed to rapid scaling and strong supply chain bargaining power [2] - Management expects further gross margin improvement in 4Q24 and raised the 2024 delivery target to 130,000 units [2] - The company anticipates SUV launch in 2025Q1, with overall sales expected to reach 400,000 units in 2025 [2] Smartphone xAIoT Business - Smartphone shipments in 3Q24 were 42.75 million units, up 3% YoY and 1.1% QoQ, with a global market share of 13.6% [3] - IoT sales grew by 26% YoY, with gross margin reaching a record high of 20.8%, driven by overseas revenue, increased share of major appliances and wearables, and refined operations [3] - Smartphone gross margin declined by 0.5 percentage points QoQ to 11.7% due to rising raw material costs [3] - DRAM price reductions and the expansion of major appliance business overseas are expected to drive IoT growth in 2025 [3] Financial Forecasts - Revenue for 2024E, 2025E, and 2026E is projected at RMB 354.7 billion, RMB 471.6 billion, and RMB 574.1 billion, respectively, with YoY growth rates of 30.9%, 33.0%, and 21.8% [5] - Non-GAAP net profit for 2024E, 2025E, and 2026E is forecasted at RMB 25.0 billion, RMB 38.6 billion, and RMB 47.6 billion, respectively [5] - EPS for 2024E, 2025E, and 2026E is expected to be RMB 1.00, RMB 1.55, and RMB 1.91, respectively [5] Valuation - The target price of HKD 36.00 is based on a SOTP valuation method, with a 22x 2025E target PE [16] - The existing business is valued at 17.1x 2025E PE, while the automotive business is valued at 2x 2025E PS [16]