Glorytech November 5th | BOC International released a report, expecting Xiaomi's performance in the third quarter to once again exceed market expectations, benefiting from the high-end strategy of smart phones and IoT products, the home appliance trade-in plan, overseas market expansion, smooth delivery of Xiaomi autos, and good cost control. Xiaomi's adjusted net income forecast for the third quarter has been raised from 5.6 billion yuan to 6 billion yuan, higher than the market consensus of 5.4 billion yuan. The bank expects innovative businesses such as Xiaomi's electric cars to generate approximately 9.2 billion yuan in revenue in the third quarter, benefiting from quarterly growth in deliveries, with estimated gross margin increasing from 15.4% in the second quarter to 17% to 18% in the third quarter. Although Xiaomi's operating costs are estimated to increase quarterly, it still expects the adjusted net loss of this business to be reduced to 1.6 to 1.7 billion yuan. BOC International indicates optimism about Xiaomi's prospects from 2024 to 2026, aside from autos, Xiaomi's high-end strategy in smart phones and IoT fields is reshaping consumers' perceptions of the Xiaomi brand. Therefore, the company's earnings per share forecast for the next two years has been raised by 3%, and the target price has been raised from 35 Hong Kong dollars to 36 Hong Kong dollars, maintaining a "buy" rating as the preferred choice in the industry.