小米集团-W(01810.HK):汽车上升势头持续 高端化及出口提振长期前景

Xiaomi Group-W (01810.HK): The upward trend of automobiles continues to be high-end and exports boost long-term prospects

開源證券 ·  May 24

The upward trend in automobiles continues. High-end and exports are boosting the long-term outlook, maintaining the “buy” rating IoT business scale expansion and gross margin exceeding our expectations. In the short term, we expect an adjusted net profit of 203/227/21.9 billion yuan in 2024-2026, corresponding to 5.3%/11.9%/-3.8% year-on-year growth rates, respectively. The current stock price of HK$18.94 is equivalent to 22.4/20.0/20.8 times PE in 2024-2026. Strong profits from the main business are expected to provide sufficient cash flow. The acceleration of automobile production capacity and the continued popularity of new cars in 2025 are expected to boost market confidence. High-end and export strategies will boost the mid-term growth of the main business and maintain a “buy” rating.

2024Q1's net profit exceeded expectations, stemming from the IoT business gross margin and non-operating revenue exceeding expectations of RMB 75.5 billion, which is basically in line with our expectations; adjusted net profit of 6.5 billion yuan, up 100.8% year on year, exceeding our expectations. The analysis was mainly due to the gross margin and non-operating income of the IoT business exceeding our expectations: (1) Mobile phone business revenue of 46.5 billion yuan, up 32.9% year on year, and gross margin fell to 14.8% from 16.4% in 2023Q4. The analysis was mainly due to The impact of rising spare parts costs and increased provisions for inventory impairment. (2) IoT business revenue was 20.4 billion yuan, up 21% year on year, mainly driven by tablets, smart appliances, and wearable products. Due to the company actively adjusting the product structure and focusing on high-margin products, the gross margin of the IoT business reached 19.9%, an increase of 4.2 percentage points over the previous year, exceeding our expectations. (3) Internet business revenue of 8 billion yuan, a year-on-year increase of 15%, mainly driven by MAU growth, with a gross profit margin of 74.2%.

(4) Innovative businesses such as automobiles cost 2.3 billion yuan.

The net profit of the main business is expected to exceed expectations in 2024, and losses from new businesses such as automobiles may fall short of market expectations (1). We expect mobile phone shipments of 1.6-165 million units in 2024, and the gross margin of the mobile phone business is expected to reach the 12-13% range. Considering that 2024Q1 gross margin is affected by inventory impairment provisions, the gross margin in the next few quarters will benefit from the company's supply chain cost control and an increase in the share of overseas shipments. (2) The IoT business revenue growth rate is expected to slightly exceed 10% in 2024. Considering that 2024Q1 is an off-season with a revenue volume of 20.3 billion dollars, the seasonal peak season for major appliances and the peak traditional marketing season are expected to drive the IoT business quarterly revenue to continue to rise in the future. (3) Losses from new businesses such as automobiles may be lower than market expectations, mainly due to low marketing expenses due to sufficient orders in the early stages, and the rapid rise in delivery volume due to excessive climbing in factory production capacity than expected, which is expected to drive automobile gross margin to exceed expectations.

Risk warning: Prices in the upstream supply chain have exceeded expectations, IoT overseas trips have fallen short of expectations, and automobile shipments have fallen short of expectations.

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