Jinwu Financial News | According to Open Source Securities Research, the adjusted net profit of Xiaomi Group (01810) 2024Q3 was 6.3 billion yuan, up 4% year on year. Among them, losses in innovative businesses such as automobiles narrowed to 1.5 billion yuan: (1) Mobile phone shipments increased to 43.1 million month-on-month, with a gross profit margin of 11.7%. (2) IoT revenue was 26.1 billion yuan, with a gross profit margin of 20.8%, mainly due to the increase in the share of high-margin products and the Q3 non-promotional peak season. (3) Internet revenue was 8.5 billion yuan, and gross margin fell 0.8 percentage points month-on-month to 77.5%, mainly due to a decrease in the gross margin of the advertising business. (4) Automobile sales were nearly 0.04 million units, and ASP increased by 0.01 million yuan to 0.239 million yuan month-on-month, mainly benefiting from the product structure, and gross margin increased 1.7 percentage points month-on-month to 17.1%.
The bank expects adjusted net profit of 5.4 billion yuan in 2024Q4, an increase of 11% over the previous year. Among them, the main business profit was 6.5 billion yuan. The month-on-month decline is expected to be mainly due to increased seasonal investment in sales expenses and R&D expenses, while losses in new businesses such as smart electric vehicles are expected to continue to narrow. Benefiting from the 2024Q4 promotion season and state subsidies, the bank expects 2024Q4 IoT revenue to increase slightly month-on-month and gross margin to stabilize month-on-month.
The bank said that based on the IoT business exceeding expectations, the bank raised the adjusted net profit for 2024-2026 from 21/28.2/33.3 billion yuan to 24.4/31.9/43 billion yuan, with a year-on-year growth rate of 26%/31%/35%. The current stock price of HK$28.3 corresponds to 27.2/20.7/15.4 times PE in 2024-2026. Strong profit is expected to provide sufficient cash flow. The Xiaomi product definition revolves around user-orientation and AIoT ecosystem layout, which is expected to boost the profit growth of the core business in 2025-2026, improve overseas channel construction and product certification definitions, which is expected to boost long-term export prospects. The next model platform is clearly positioned to boost market confidence and maintain a “buy” rating.
