Xiaomi Corp_ EV Delivery Volume Upbeat in 2024, Raise Shipments Target to 300k in 2025

Key Takeaways Industry or Company Involved: - Xiaomi Corp (1810.HK, 1810 HK) Core Points and Arguments: - 2024 EV Shipments: Xiaomi's EV delivery volume exceeded 135k units in 2024, surpassing its annual delivery target [2]. - 2025 Shipments Target: The company has raised its 2025 EV shipments target to 300k units, an increase from the previous target of ~250k units [2]. - Product Mix Change: In 2025, Xiaomi will introduce the SU7 Ultra and YU7 models, which are expected to have higher ASPs than the SU7 Basic, Pro, and Max models in 2024. This is expected to drive higher ASPs and better EV margins [3]. - Execution in EV Business: Xiaomi's strong delivery volume in 2024 and the higher shipment target for 2025 indicate excellent execution in the new EV business [3]. Other Important Points: - Analyst's View: The analyst maintains a positive view on Xiaomi's EV business and believes an upward revision of the shipment target is likely in 2025 [3]. - Valuation Methodology: The base case valuation uses a residual income (RI) model derived from the sum-of-the-parts methodology. The CoE for the smartphone business, IoT, and Internet Services is 11%, 11%, and 11.4%, respectively, with terminal growth rates of 3%, 3%, and 6% [8]. - Risks: Risks to upside include better-than-expected customer feedback for the first EV, good ramp-up for offline expansion in China, higher market share gain in overseas markets, and continued fierce EV competition in 2025. Risks to downside include smartphone gross margin pressure from inventory destocking and weak demand, and more concerns about smart EV investment [11]. Additional Information: - The document includes disclosures regarding the relationship between Morgan Stanley and the companies covered in its research, as well as important regulatory disclosures on subject companies [13, 16-19]. - The document also provides information on Morgan Stanley's stock ratings system and global stock ratings distribution [24-26]. - The document includes important disclosures for Morgan Stanley Smith Barney LLC customers and other important disclosures [35-37]. - The document provides information on Morgan Stanley's research policy, terms of use, and privacy policy [38-40]. - The document includes important regulatory disclosures on subject companies and other important disclosures [41-45]. - The document provides information on Morgan Stanley's industry coverage and stock ratings for various companies in the Greater China Technology Hardware sector [56-57].