Investment Rating - The investment rating for Xiaomi Group is "Buy" [7] Core Insights - The report highlights that the pessimistic expectations regarding storage price increases have been largely digested, suggesting a focus on Xiaomi's substantial progress in AI research and development, including models, embodied intelligence, self-developed chips, and operating systems [3][13] - The revenue forecast for FY2026E-FY2028E has been adjusted to RMB 514.1 billion, RMB 584.5 billion, and RMB 661.4 billion respectively, while the adjusted net profit forecast is set at RMB 33 billion, RMB 41 billion, and RMB 52.5 billion for the same period [13] - The target price for Xiaomi Group has been adjusted to HKD 43.4 based on the SOTP valuation method, maintaining the "Buy" rating [13][17] Financial Summary - Total revenue is projected to reach RMB 365.9 billion in 2024, RMB 457.3 billion in 2025, RMB 514.1 billion in 2026, RMB 584.5 billion in 2027, and RMB 661.4 billion in 2028, reflecting growth rates of 35.0%, 25.0%, 12.4%, 13.7%, and 13.2% respectively [5] - Gross profit is expected to be RMB 76.6 billion in 2024, RMB 101.8 billion in 2025, RMB 105.8 billion in 2026, RMB 121.3 billion in 2027, and RMB 139.7 billion in 2028, with gross margins of 20.9%, 22.3%, 20.6%, 20.7%, and 21.1% respectively [5] - Adjusted net profit is forecasted to be RMB 27.2 billion in 2024, RMB 39.2 billion in 2025, RMB 33.0 billion in 2026, RMB 41.0 billion in 2027, and RMB 52.5 billion in 2028, with corresponding growth rates of 41.3%, 43.8%, -15.8%, 24.4%, and 28.0% [5] Market Performance - The stock price range over the past 52 weeks is between HKD 31.58 and HKD 60.15, with a current market capitalization of HKD 841.25 million [8]

Group 1 - The China Development Forum 2026 will be held from March 22 to 23 in Beijing, focusing on "The 14th Five-Year Plan of China: High-Quality Development and Co-Creating New Opportunities" [2] - The U.S. has conditionally relaxed oil sanctions on Iran for 30 days, allowing the delivery and sale of Iranian crude oil and petroleum products already loaded by March 20 [3] - The Iranian nuclear facility at Natanz was attacked, with Iran claiming it violated international laws, while the U.S. and Israel plan to significantly increase military actions against Iran [4] Group 2 - The Chinese government is encouraging multinational companies to increase investments in China, highlighting the stable and improving economic environment [5] - The insurance industry is experiencing pressure due to solvency regulations, but major players maintain that the impact on the market is limited [4] - The Ministry of Ecology and Environment is enhancing support for green and low-carbon development among private enterprises [9] Group 3 - The international oil price has surged due to escalating conflicts in the Middle East, raising concerns about inflation in the U.S. and potential interest rate changes by the Federal Reserve [14][15] - The World Trade Organization warns that the Middle East conflict could impact global trade through rising oil prices and fertilizer supply shortages [15] - Brazilian President Lula emphasizes the need for strategic oil reserves in response to the ongoing Middle East conflict [17]

Group 1: Domestic News - The National Development and Reform Commission has launched a new batch of 13 major foreign investment projects with a planned investment of $13.4 billion, focusing on manufacturing sectors such as electronics, chemicals, automotive, and electrical machinery [2] - Shanghai has recognized 30 new regional headquarters of multinational companies and 15 foreign research and development centers, primarily in key industries like biomedicine, integrated circuits, high-end equipment, automotive, and fashion consumer goods [3] - Chongqing has established the first mandatory insurance mechanism for low-altitude economy, providing risk coverage of 42.6 million yuan for 194 drones operated by Aerospace Technology Group [4] Group 2: Automotive Industry - The China Passenger Car Association reported that from March 1 to 15, retail sales of passenger cars in China reached 561,000 units, a year-on-year decline of 21%, while retail sales of new energy vehicles during the same period were 285,000 units, down 28% year-on-year [5] - Chery Automobile announced a total revenue of 300.29 billion yuan for 2025, with a year-on-year growth of 11.3% and a net profit of 19.51 billion yuan, reflecting a net profit margin increase from 5.3% to 6.5% [12] - Geely Automobile reported a total revenue of 345.2 billion yuan for 2025, a year-on-year increase of 25%, with a core net profit of 14.41 billion yuan, marking a 36% growth [13] - Zotye Automobile's wholly-owned subsidiary, Zhejiang Shenkang Automotive Body Mould Co., has resumed production, although the company faces significant financial pressure and uncertainty regarding the full recovery of its vehicle business [11] Group 3: Technology and Innovation - Xiaomi's ultra-strong steel, with a strength of 2200 MPa, has won the "Science and Technology Innovation Achievement First Prize" from the China Association for the Promotion of Industry-Academia-Research Cooperation, and is now in mass production for new models [14] - GAC Toyota has initiated its first large-scale OTA upgrade for the Platinum 3X model, available for all owners free of charge [15] - The new automotive brand AISTALAND, created by Huawei and GAC, was officially announced, emphasizing the integration of AI in automotive travel [16]

Core Viewpoint - Xiaomi's founder Lei Jun discussed the challenges and achievements of Xiaomi's automotive development, emphasizing the importance of not undermining existing users while transitioning to the new generation of the SU7 model [1]. Group 1: New Generation SU7 Launch - The new generation SU7 is set to officially launch on March 19 at 19:00 [4]. - The new model has undergone significant upgrades in safety, driving control, intelligent experience, and luxury feel, taking over two years for its design [1]. Group 2: Safety Features and Specifications - The new SU7 features a 2200MPa ultra-strong steel embedded roll cage and comes standard with 9 airbags, including 2 additional side airbags for the rear [5]. - In terms of battery safety, it incorporates a 1500MPa anti-scratch bottom beam and a bulletproof coating on the underside [5]. - The vehicle will be equipped with Xiaomi's Super Motor V6s Plus across all variants [5]. Group 3: Sales and Production Insights - Xiaomi's automotive sales reached 39,000 units in January, with the YU7 model accounting for approximately 97% of total sales [6]. - The last unit of the first generation SU7 was delivered on February 13, marking the end of its production to prepare for the new generation [7]. - The first generation SU7 had a total delivery exceeding 381,000 units by February 2026, with a target of 550,000 units for 2026 and over 410,000 units for 2025 [8].

Core Viewpoint - The automotive market in February 2026 experienced a significant downturn, with all new energy vehicle manufacturers failing to exceed 30,000 units in monthly deliveries, marking a shift in market dynamics and highlighting the challenges faced by both new entrants and established brands [1][2]. Group 1: Sales Performance Overview - In February, BYD's sales reached 190,190 units, a 41% decline year-on-year, with domestic sales dropping to just over 90,000 units, indicating strong pressure from the seasonal downturn [4][5]. - Geely reported total sales of 206,160 units, showing a slight increase of 1% year-on-year, supported by a remarkable performance from its Zeekr brand, which saw a 70% increase in sales [6]. - Great Wall Motors sold 72,600 vehicles in February, down 7% year-on-year and 20% month-on-month, with 12,744 units being new energy vehicles [9]. Group 2: New Energy Vehicle Manufacturers - New energy vehicle manufacturers collectively faced significant challenges, with AITO and XPeng showing notable declines in sales, with AITO delivering approximately 18,000 units in February, a drop of nearly 50% from January [11]. - XPeng delivered 15,256 vehicles in February, reflecting a nearly 50% year-on-year decline and a 24% month-on-month drop, attributed to the aging of older models and product transition pains [12]. - In contrast, Li Auto delivered 26,421 vehicles, showing a slight year-on-year increase, while NIO achieved a substantial 57.6% year-on-year growth with 20,797 units delivered, driven by strong demand for its ES8 model [18][19]. Group 3: Market Dynamics and Future Outlook - The automotive market is experiencing a dual pressure of declining domestic demand and intense price competition, with over 20 brands, including BYD and Tesla, engaging in long-term low-interest promotions [23]. - Despite the challenges, opportunities exist in the form of decreasing battery costs and advancements in smart driving technology, which could enhance the penetration of new energy vehicles in the market [23]. - The export market is becoming increasingly vital for Chinese automotive brands, with BYD's exports exceeding 100,000 units in February, marking a potential shift in focus from domestic to international markets [5].

Core Viewpoint - Xiaomi is committed to safety in its automotive division, emphasizing a comprehensive safety strategy that includes significant investments in technology and infrastructure to ensure the safety of its vehicles [2][3][6]. Group 1: Safety Commitment - Xiaomi has established a dedicated safety team of over 3,500 personnel, including a Safety Committee with veto power and various specialized teams focused on risk identification, accident investigation, and emergency response [3][4]. - The company aims to create the safest vehicles in its class, with a motto of "safety above all" guiding its development philosophy [2][3]. Group 2: Safety Features and Innovations - The new generation SU7 features 90.3% high-strength steel and aluminum, with critical areas reinforced by 2200MPa ultra-high-strength steel, making it one of the strongest vehicles in production [5]. - The vehicle is equipped with nine airbags, including two new side airbags for rear passengers, and includes advanced safety technologies such as laser radar and a ballistic coating for battery protection [5][6]. Group 3: Battery Safety and Development - Xiaomi has a dedicated battery research team of over 220 people and has filed 486 patents related to battery systems, with 190 already approved [6][7]. - The company emphasizes a multi-faceted approach to battery safety, focusing on intrinsic safety, structural integrity, thermal management, electrical safety, functional safety, and data security [6][7]. Group 4: User Engagement and Services - During the recent Spring Festival, Xiaomi offered various user service activities, including 24-hour roadside assistance and reimbursement for travel expenses due to vehicle breakdowns, covering 295 cities [7]. - The company has also launched promotional activities for its vehicles, including financing options and special purchase benefits for the Xiaomi YU7 model [9].

Core Insights - Xiaomi's founder Lei Jun is personally involved in the testing of the new SU7 model, demonstrating his commitment to product quality and performance [1][3] - The new SU7 is set to launch in April 2023, with a focus on creating a desirable vehicle for consumers [3] Group 1: Product Development - Lei Jun has participated in multiple testing sessions for the SU7, including a high-speed test drive from Beijing to Shanghai, indicating a hands-on approach to quality control [1] - The SU7 is available for pre-order, with three versions offered: Standard, Pro, and Max, priced at 229,900 yuan, 259,900 yuan, and 309,900 yuan respectively [3] Group 2: Market Strategy - The company aims to ensure that every vehicle delivered meets the highest standards, reflecting a strong emphasis on customer satisfaction and product excellence [3]

Core Insights - Xiaomi's CEO Lei Jun announced the production of the last unit of the first-generation Xiaomi SU7, marking the end of its production run [1] - The first-generation Xiaomi SU7 has achieved impressive market performance with cumulative deliveries nearing 370,000 units [1] - The final unit was purchased by a dedicated Xiaomi fan, highlighting brand loyalty among consumers [1] Group 1: Product Development - The first-generation Xiaomi SU7 was officially launched on March 28, 2024, offering three versions: Standard, Pro, and Max, priced at 215,900 yuan, 245,900 yuan, and 299,900 yuan respectively [3] - The new generation of the SU7 is anticipated to launch in April 2026, with pre-sale prices set at 229,900 yuan, 259,900 yuan, and 309,900 yuan for the Standard, Pro, and Max versions [3]

Core Viewpoint - The Hong Kong stock market continues its rebound, with major indices showing positive performance, particularly in technology and gold sectors [1] Group 1: Market Performance - The Hang Seng Technology Index rose by 1.3% at one point, ultimately closing up by 0.9% [1] - The Hang Seng Index and the China Enterprises Index increased by 0.31% and 0.28% respectively, marking a six-day rally for all three indices [1] Group 2: Sector Highlights - Large technology stocks are recovering, with Xiaomi experiencing a peak increase of 5.4% during trading [1] - The gold sector saw significant gains, with January gold jewelry prices rising by 77.4% year-on-year, leading to a notable increase in gold stocks; Zijin Mining surged by 9% and Lingbao Gold rose nearly 8% for three consecutive days [1] - The construction materials sector is expected to see a moderate recovery in profitability, with China National Building Material rising by 11.46%, leading gains in the building materials and cement stocks [1] Group 3: Company-Specific Movements - BYD Company saw a 3.5% increase, leading the automotive sector in sales in Australia for January [1] - AI application concept stocks mostly rose, with Kingsoft Cloud and Bilibili leading the gains [1] Group 4: Weak Performers - Film stocks, which had previously outperformed, collectively retreated, while semiconductor stocks showed weakness, with SMIC falling over 2% due to Q4 earnings falling short of expectations [1] - Insurance, aviation, and restaurant stocks are collectively stabilizing at lower levels [1]

Group 1 - The first generation of SU7 has officially ceased production following the completion of the last vehicle [1][3] - From April 2024 to February 2026, the first generation SU7 delivered over 381,000 units in less than two years [1][3] - The new generation of SU7 is expected to launch in April, with a commitment to create a vehicle that embodies the dreams of consumers [1][3]