Morgan Stanley released a report on August 22nd, expressing surprise at Xiaomi's second-quarter gross margin of 15.4% for electric vehicles. Combined with better-than-expected profits in the previous quarter, the report believes this is a catalyst for Xiaomi's reevaluation. The bank expects Xiaomi's electric vehicle business to continue to deliver impressive performance and alleviate investor concerns about its sustainability. Therefore, they maintain an “overweight” rating on Xiaomi, with a target price of HKD 25.5. On the smartphone shipment front, it is believed that Xiaomi may maintain growth on a quarterly basis. Morgan Stanley also believes that Xiaomi's electric vehicle profit margin will continue to improve, benefiting from a better product lineup and scale expansion.