Morgan Stanley's research report points out that Xiaomi Group (01810) performed better than expected in the first half of this year in electric vehicles and artificial intelligence internet of things, and believes that it can support the positive growth prospects of the group. If the gross margin of smart phones bottoms out in the third quarter, the gross margin recovery may become another positive catalyst from the second quarter to 2025.
The bank has raised its revenue forecasts for Xiaomi Group by 3% and 2% for the next two years, and has also assumed a 0.7 and 1.1 percentage point increase in gross margin for 2024-2025, respectively. The bank expects more positive developments for Xiaomi Group in the next 12 months, with a target price of 26 Hong Kong dollars, up from 25.5 Hong Kong dollars. They maintain a 'buy' rating.
