Dahua Jixian's report predicts that Xiaomi (01810.HK) will have a third-quarter adjusted net profit of 6 billion RMB, mainly driven by strong sales and profitability of the internet of things sector, while smart phones, internet services, and electric vehicle businesses will meet expectations. The bank maintains a 'buy' rating with a target price raised from 24.4 to 31.7 yuan.

The bank stated that the company's third-quarter revenue is expected to increase by 25.9% year-on-year to 89.2 billion RMB, gross profit will increase by 2.3 percentage points year-on-year, and by 0.3 percentage points quarter-on-quarter to 20.4%. The proportion of core business operating expenses is expected to decrease by 1 percentage point to 14.6%. The bank has raised the company's net profit forecasts for the years 2021 to 2026 by 13.9%, 29.8%, and 29.9%, respectively. At the same time, it has raised the gross profit forecasts for the same period of the internet of things business by 1.3%, 2.6%, and 3.5%, respectively. It is also expected that the delivery volume of electric vehicles will increase from 2025 to 2026, and the average selling price will slightly increase due to a better product mix and the launch of a new SUV model early next year. (vc/w)

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