Glonghui, December 29 | UBS released a research report stating that Xiaomi launched the first SU7 and SU7 Max models, as well as the Group's basic electric vehicle technology at the automotive technology conference. Xiaomi said that in terms of performance specifications, the SU7 Max outperforms the Porsche Taycan and Tesla Model S, but the pricing is still uncertain. The bank expects sales of smart electric vehicles to begin in the third quarter of next year, and the sales volume is expected to reach 30,000 units next year. The bank said that considering the car's performance comparison and battery cost considerations, it believes the price of the SU7 model may be within the range of Porsche Taycan and Tesla Model S, while the two models are sold for 1.5 million yuan and 700,000 yuan respectively in China. In terms of manufacturing, Xiaomi said it has begun small-batch production, but it is still uncertain whether the first batch of models will be manufactured by itself or outsourced to a third party. In the long run, the bank believes that the group aims to produce most smart electric vehicles within Beijing. As far as long-term shipment forecasting is concerned, the bank believes that 13.7 million “Super Rice Noodle” IoT users with five or more devices provide a good potential market for the Group. If 10% of users buy Xiaomi smart electric vehicles, I believe their electric vehicle business can balance the balance of payments in 2029 or earlier. Manufacturing and distribution are key elastic points of cost. The bank maintains the Xiaomi Group's “buy” rating and target price of HK$18. Under basic circumstances, it is expected that by 2030, Xiaomi's share of the electric vehicle market in China will reach 2%, and net profit will reach break-even; based on a discount rate of 1.0x 24E p/s and c 20%, the valuation of Xiaomi's electric vehicle business is HK$1.00 per share.