报告首次给予小米“买入”评级，并将其目标价上调至43港元。Deutsche Bank believes that new products, market segmentation, stores, and production capacity will bring exponential growth to Xiaomi's Autos Business. It is expected that by 2027, the gross margin of Xiaomi's electric vehicle business will reach 25%, contributing 45.5% and 42% to overall gross profit and pretax profit respectively, with sales reaching 1 million units, making it the largest business segment of the group. Deutsche Bank has given Xiaomi a "Buy" rating for the first time and raised its Target Price to HKD 43.
Will the launch of the first SUV model continue to boost Xiaomi's Autos Business in the future?
On December 13, Deutsche Bank Analysts Bin Wang, Laura Li, and Edison Yu released a research report stating that new products, market segments, stores, and production capacity will bring exponential growth to Xiaomi's Autos business and are expected to enter two larger segments of pure electric and hybrid SUVs in the next two years.
The report gives Xiaomi a "Buy" rating for the first time and raises its Target Price to 43 Hong Kong dollars.
Deutsche Bank expects Xiaomi's total Net income to grow at a compound annual growth rate of 40%, increasing from 20 billion yuan in 2024 to 54.7 billion yuan in 2027, with total revenue reaching 917 billion yuan at a compound annual growth rate of 17% by 2027.
Xiaomi's electric vehicle will become the largest Business segment, with the SUV market size exceeding that of sedans.
In terms of new products and market segments, Xiaomi previously stated it plans to launch the "YU7" pure electric SUV by mid-2025. The report estimates that by 2027, the annual sales of this SUV will reach 0.4 million units.
The report also indicated that Xiaomi will continue to launch new models in the coming years, forecasting the introduction of a full-size/large SUV in 2026, followed by two large plug-in hybrid SUVs in 2027. The market size for electric SUVs is expected to surpass that of electric sedans, with annual sales reaching 0.35 million units, which is 40% higher than the expected annual sales of 0.25 million units for Xiaomi's SU7.
The report further states that the brand recognition, large customer base, and excellent online marketing capabilities established by Xiaomi in its core business—Consumer Electronics—provide an advantage for the company to enter the auto market.
Regarding stores, the report predicts that as Xiaomi actively expands its offline distribution channels, the number of stores will increase from 60 in the first quarter of this year to 200 in the fourth quarter.
In terms of production capacity, the report forecasts that the capacity of the Peking factory will rise from 15,500 vehicles in September 2024 to 24,400 vehicles in November, indicating an annualized capacity of 0.29 million vehicles. The newly established second factory in Peking is expected to begin production by mid-2025, with total capacity jumping from 0.3 million vehicles in 2025 to 1 million vehicles by 2027.
However, due to initially low sales and high R&D costs, Deutsche Bank expects Xiaomi's electric vehicle business to incur losses in 2024, but achieve its first profit in 2026. It is anticipated that with improvements in product structure and the introduction of high stock price products, there will be continued growth in average selling prices (ASP) and profitability between 2024 and 2027.
It is expected that by 2027, the gross margin of Xiaomi's Automotive business will reach 25%, contributing 45.5% and 42% to total gross profit and pre-tax profit respectively, with sales reaching 1 million units, becoming the largest business segment of the group.
Editor/ping
