XIAOMI(01810) 华兴证券香港·2024-12-05 03:41Investment Rating - The report maintains a "Buy" rating for Xiaomi Group with a target price of HK28.30 [2][3][8]. Core Insights - The report emphasizes the structural growth opportunities for Xiaomi in the Southeast Asian market, driven by smartphone replacement cycles and increasing IoT product penetration [6][17][22]. - Despite challenges in overseas markets, Xiaomi's revenue contribution from international markets has increased to 45% in 2023, up from 36% in 2020, indicating a shift towards emerging markets as key growth drivers [17][19]. - The report highlights the potential for Xiaomi to capture a larger market share in Southeast Asia, with expectations of an increase from 15% in Q3 2024 to approximately 18% by 2026 [46][48]. Financial Summary - Revenue projections for Xiaomi are as follows: RMB 356,281 million for 2024E, RMB 423,470 million for 2025E, and RMB 465,323 million for 2026E [11]. - Earnings per share (EPS) estimates are projected at RMB 0.99 for 2024E, RMB 1.08 for 2025E, and RMB 1.24 for 2026E, reflecting a growth trajectory [11]. - The report notes a significant increase in the average price of smartphones in Southeast Asia, with potential market value growth of 13% driven by rising prices [35][36]. Market Opportunities - The Southeast Asian smartphone market is expected to see a structural growth opportunity, with a projected increase in smartphone shipments to 17 million units by 2026, driven by a shortening replacement cycle [29][31]. - The report identifies that the average smartphone price in Southeast Asia is currently lower than in China, suggesting room for price increases as 5G penetration grows [35][38]. - Xiaomi's IoT product offerings are expected to drive significant traffic and sales growth in the region, with a focus on enhancing product accessibility and expanding SKU variety [62][67]. Competitive Landscape - Xiaomi ranks among the top three smartphone vendors in Southeast Asia, alongside Samsung and Oppo, with a competitive edge in both high-end and low-end market segments [46][48]. - The report indicates that Xiaomi's market share has fluctuated due to challenges faced in overseas markets, but there is optimism for recovery and growth in market share through strategic initiatives [46][48]. - The report also highlights the importance of enhancing retail experiences and expanding distribution networks to capture market opportunities effectively [59][63].