XIAOMI(HK:01810) Zhao Yin Guo Ji·2024-05-24 03:02Investment Rating - The report maintains a "BUY" rating for Xiaomi with a new target price (TP) of HK$25.39, reflecting a 34% upside from the current price of HK$18.94 [2][18]. Core Insights - Xiaomi's 1Q24 results exceeded expectations, with revenue and net profit growing 27% and 101% year-over-year (YoY), respectively, driven by improved gross profit margins (GPM) and a favorable revenue mix [2][14]. - The company has set an ambitious target of 120,000 annual electric vehicle (EV) deliveries, up from the previous guidance of 100,000, indicating strong growth potential in the EV segment [2][18]. - The report anticipates continued earnings growth for Xiaomi, supported by smartphone market share gains, robust AIoT sales, and increasing overseas internet revenue [2][14]. Financial Summary - Revenue for FY24E is projected at RMB 337,161 million, representing a 24.4% YoY growth, with adjusted net profit expected to reach RMB 22,974 million, a 19.2% increase YoY [3][24]. - The adjusted EPS for FY24E is forecasted at RMB 0.92, significantly above consensus estimates [3][16]. - Gross margin is expected to be 21.1% for FY24E, reflecting a slight improvement from previous years [3][15]. Segment Performance - Smartphone revenue is projected to grow by 18% YoY in FY24E, driven by a 33.7% increase in global smartphone shipments in 1Q24 [2][13]. - AIoT and lifestyle products are expected to see a revenue increase of 21% YoY in FY24E, supported by strong sales in various product categories [2][13]. - Internet services revenue is anticipated to grow by 15% YoY in FY24E, indicating a solid performance in this segment [2][13]. Valuation - The report employs a sum-of-the-parts (SOTP) valuation method, assigning a P/E multiple of 15x to Xiaomi's smartphone, AIoT, and internet businesses, while the EV business is valued at 0.75x FY25E price-to-sales (P/S) [18][19]. - The total valuation for Xiaomi is estimated at RMB 581,175 million, translating to a target price of HK$25.39 per share [19][18].