Jinwu Financial News | First Shanghai coverage gave Xiaomi Group (01810) a purchase rating for the first time. According to the bank, the competitive pattern in the mobile phone industry is relatively stable. Xiaomi phones have been in the top three in global shipments for several consecutive quarters. As of the first quarter of 2024, its market share reached 13.8%. Looking forward to the future, it is expected that the 5G device update cycle in emerging markets and innovation driven by artificial intelligence will jointly drive shipment growth; at the same time, given the continued rise in global demand for high-end phones and the positive impact of high-end positioning on the brand image, Xiaomi is opening up new growth points in the high-end market segment through strategies such as brand segmentation, enriching product lines, and optimizing user experience.
The company continued that in March '24, the Xiaomi SU7, which is extremely cost-effective in terms of configuration and intelligence, was officially released. Once again, Xiaomi created an explosive product, received more orders than expected, and achieved delivery as soon as it went public. The company's production capacity continues to rise, and the company is expected to achieve the delivery target of about 0.12 million units; at the same time, the company will further expand its sales network, and the company is expected to complete the 24-year store opening plan: sales stores cover 46 cities, with a total of 219; service centers cover 86 cities, for a total of 143. In the future, Xiaomi will continue to invest in automobile research and development. As production capacity and channels are further expanded, it is optimistic about the subsequent development of automobiles.
The bank said it predicts revenue for 2024-2026 to be 332.86 billion yuan, 386.55 billion yuan and 43.28 billion yuan, respectively, and net profit of 14.31 billion yuan, 16.56 billion yuan and 23.73 billion yuan, respectively. According to the valuation situation of similar companies, the target price given to the company for the next 12 months is HK$21.38, which is equivalent to 15 xPE for the traditional core business in 2025 and 2xPS for the automobile business. The target price corresponds to 30x/21xPE in 2025/2026, respectively, with room for an increase of 31.98% compared to the current price.