招银国际 ·  Apr 24

We attended Xiaomi Investor Day 2024 in Beijing on 23 Apr. Key takeaways include: 1) SU7 sales target: 100k units in 2024 and 10k monthly delivery in June. 2) SU7 GPM target of 5-10% in 2024. 3) SU7 breakeven at 300-400k sales per year; 4) City NOA available in May and to be rolled out nationwide in Aug; 5) Smart EV sales/service centre: target to cover 46/82 cities by end of 2024; 6) Smart driving team: 1.5k/2k staff by 2024/25 from 1k currently; 7) 2024 guidance: RMB300bn in revenue with RMB24bn in expenses. Overall, we believe SU7's sales/ GPM target exceeded market expectations, and we remain positive on Xiaomi's strong branding and unique "Human-car-home" ecosystem as major competitive edges over peers. Reiterate BUY. Near-term catalysts include Auto Show Beijing (25-27 Apr), 1Q24 results in May and 10k SU7 monthly shipments in June.

Xiaomi SU7: 100k sales target and 5-10% GPM in 2024; Breakeven target at 300-400k sales/year. During the event, mgmt. reiterated strong order demand for SU7 since launch, and non-refundable orders now reached 70k with a higher share of high-end SU7 MAX model. Xiaomi also announced the 100k sales target for SU7 in 2024, and expected monthly delivery to reach 10k units in June. In addition, mgmt. stated that SU7 GPM may reach 5-10% in 2024, above our expectations, and EV business may reach breakeven at 300-400k sales volume per year. For the next three years, Xiaomi SU7 will focus on China market, and expand to overseas market at a later stage. To enhance smart driving capability, Xiaomi aims to expand smart driving team size to 1.5k/2k by 2024/25 from 1k currently. Company also targets to expand EV sale/service centre coverage to 46/82 cities by end of 2024.

2024 guidance: RMB300bn in revenue, RMB24bn in R&D exp. (inc. RMB11-12bn EV-related), +15-20mn smartphone shipments. For 2024, mgmt. guided revenue could reach RMB300 for core business, and R&D expenses could reach RMB24bn (incl. RMB11-12bn for EV-related). For smartphone, company targets 15-20mn more shipments in 2024 (vs 146mn in 2023). Xiaomi's 1Q24 smartphone shipments grew 34% YoY to 40.8mn, based on IDC.

Valuation/Key risks. Overall, market reacted positively to Xiaomi's SU7 sales/GPM target in 2024 and upcoming expansion plan. In the near term, order momentum, shipment ramp-up and consumer feedback will be major share price catalysts. Looking ahead, we remain positive on Xiaomi's unique "Human-car-home" ecosystem as a major differentiator from peers. Reiterate BUY with SOTP-based TP of HK$22.19.

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