XIAOMI(HK:01810) Zhao Yin Guo Ji·2024-05-24 03:22Investment Rating - The report maintains a "Buy" rating for the company, with a target price (TP) raised to HKD 25.39 from the previous HKD 23.77, indicating a potential upside of 34% from the current price of HKD 18.94 [2][3][17]. Core Insights - The company reported a strong first quarter with revenue and net profit growth of 27% and 101% year-on-year, respectively, driven by improved gross profit margins (GPM) and a better revenue mix [2][12]. - The company aims to deliver 120 electric vehicles (EVs) annually, up from a previous target of 100, and plans to expand its retail strategy significantly in China [2][12]. - The report anticipates continued growth in smartphone market share, AIoT sales strength, and overseas internet revenue, contributing to profit growth through FY24E - FY26E [2][12][13]. Financial Summary - Revenue is projected to grow from HKD 270,970 million in FY23A to HKD 337,161 million in FY24E, reflecting a year-on-year growth of 24.4% [3][16]. - Adjusted net profit is expected to increase from HKD 19,273 million in FY23A to HKD 22,974 million in FY24E, representing a growth of 19.2% [3][16]. - The adjusted earnings per share (EPS) is forecasted to rise from RMB 0.77 in FY23A to RMB 0.92 in FY24E, with a price-to-earnings (P/E) ratio of 19.0x for FY24E [3][16]. Segment Performance - Smartphone revenue is expected to reach HKD 185,020 million in FY24E, with a year-on-year growth of 18% [12][16]. - AIoT and lifestyle products are projected to generate HKD 93,264 million in FY24E, reflecting a growth of 16% [12][16]. - Internet services are anticipated to contribute HKD 32,856 million in FY24E, with a year-on-year growth of 9% [12][16]. Valuation and Catalysts - The report assigns a valuation multiple of 15x FY24E P/E for the smartphone, AIoT, and internet businesses, while the EV business is valued at 0.75x FY25E P/S [17]. - Upcoming catalysts include progress in EV deliveries and growth in smartphone market share [2][17].