UBS Group released a report stating that Xiaomi-W (01810.HK) achieved record performance in the third quarter, with profits from core business (smart phones, internet of things (iot) and consumer products, and internet services) and electric vehicle business gross margin exceeding both the bank's and market expectations. The bank believes that Xiaomi's strong execution of its high-end strategy will drive stable growth in core profits and unlock the upside potential of the smart electric vehicle business.

The bank reaffirmed its "buy" rating on Xiaomi, raising the target price from 20 yuan to 33.5 yuan, expecting a stable compound annual growth rate of 5.2% for Xiaomi's smart phone sales from 2025 to 2027, compared to 16.6% in 2024. The shift to the high-end market will continue to drive growth in product average price and gross margin, with the average price expected to exceed 1,100 yuan and gross margin over 13%. Additionally, the forecast for Xiaomi's automobile shipments in 2025 has been raised from 0.23 million units to 0.26 million units, and it is also expected that the gross margin for Xiaomi's electric vehicle business will remain at a high double-digit level in the long term, significantly higher than the previous bank's baseline scenario prediction of 5%.