Xiaomi officially launched its SU 7 Series electric sedans on 28 Mar, which are priced at RMB 215.9k/245.9k/299.9k for SU7/SU7 Pro/SU7 Max models. Its competitive pricing strategy was well-received by the market, and the initial pre- orders of 50k/89k units in first 27min/24hr are above market expectations, mainly due to its competitive specs, self-developed autonomous driving technology (Xiaomi Pilot), and unique integrated AIoT ecosystem. In the near term, we believe investors will focus on pre-order momentum, shipment ramp-up and consumer feedback in next two months. Looking ahead, we remain positive on Xiaomi's unique "Human-car-home" ecosystem as major differentiation from other brands. We adjusted our forecasts to factor in EV shipment of 80k/150k/200k in FY24/25/26E, and assigned SOTP-based TP of HK$22.19 (49% upside).
Xiaomi SU7's pricing strategy is well received by the market. Xiaomi officially launched its SU 7 Series electric sedan model on 28 Mar, with the price of RMB 215.9k/245.9k/299.9k for SU7/SU7 Pro/SU7 Max models. SU7's technical specs (0-100km/h acceleration, battery voltage/miles, in- cabin system) outperform its peers in the same price range (e.g. Zeekr 001/007, Tesla Model 3, Luxeed S7, Xpeng P7i), in our view. We are positive on Xiaomi's competitive pricing and AIoT ecosystem based on "Human-car-home" connectivity, which is its major competitive advantage over its EV peers.
Initial pre-orders above market expectations; Shipment ramp-up will be major focus. The initial pre-order of 50k/89k units within the first 27 minutes/24 hours surpassed market expectations. We think Xiaomi's EV production capacity could be the near-term bottle-neck given 100k units annual capacity for Xiaomi's phase one plant. Total capacity will reach 300k units after second phase starts operation in March 2025. In the near term, we expect pre-order momentum, shipment ramp-up and consumer feedback will be the major market focus in next two months.
Positive market response as near-term catalyst; Raise SOTP-based TP to HK$22.19. Market reacted positively to Xiaomi's EV pricing and initial pre-orders, as Xiaomi ADR rallied over 11% post launch event. We think that Xiaomi's EV product pricing strategy and positive market response will be the near-term share price catalyst. We adjusted our forecasts to factor in EV shipment of 80k/150k/200k in FY24/25/26E, and assigned SOTP-based TP of HK$22.19 (vs prior 24x FY24E P/E).