Incidents:

1. According to the financial community, according to information from the State Intellectual Property Office, Beijing Xiaomi Mobile Software Co., Ltd. obtained a patent called “Support Components and Refrigerators”, with the authorization notice CN 222143462 U, and the application date is December 2023.

2. According to the Refrigeration Network official account, according to GSMChina reports, Xiaomi confirmed that it will launch a plan to expand the global home appliance market next year, taking the lead in the Southeast Asia region, including countries such as Thailand and Malaysia.

Key points:

Xiaomi Group increases self-research on home appliances and continues to improve product strength

According to the 2024 mid-year report, the Xiaomi Group insists on cumulative innovation and self-research capabilities, continues to invest in key technical fields, and continues to bring healthy and intelligent quality home appliances to users. According to the official website of Xiaomi Technology, Xiaomi launched an innovative product, air conditioning in 2024, which has many advantages: through the updraft mode, on the one hand, wind energy flows along the wall to form circulation, which avoids the feeling of direct blowing of cold air; on the other hand, it can improve cooling and heating efficiency, and reduce the gap with the ceiling, making it more beautiful.

Major appliance businesses are expected to go overseas to Southeast Asia

According to the Refrigeration Network official account, people involved in Xiaomi's Southeast Asia business have stated that Xiaomi will launch various household appliances in the global market, starting with Southeast Asian countries such as Thailand and Malaysia, including Xiaomi air conditioners, Xiaomi refrigerators, and Xiaomi washing machines. According to 36Kr, Xiaomi's new retail model has the potential to be replicated in overseas markets, and it is planned to open 0.01 million Xiaomi Home stores within the next five years. According to the Xiaomi Group announcement, in the third quarter of 2024, the share of Xiaomi phones in many regions of the world was already in the top three. At the same time, the share in Africa and Southeast Asia is still increasing year-on-year, reflecting consumers' perception of the Xiaomi brand and product recognition. We believe that Xiaomi home appliances are expected to reuse the channels and brand awareness of leading global businesses such as mobile phones to achieve breakthroughs in overseas markets.

Profit forecast

We expect the company's revenue for 2024-26 to be $353.7/407.2/461.1 billion, +31%/+13% year over year, net profit to mother of 19.2/24.7/30.1 billion yuan, +10%/+29%/+22% year over year, and corresponding EPS of $0.77/0.99/1.21, respectively, calculated at a closing price of HK$30.35 on December 16, 2024 (according to wind, December 16, 2024) , 1HKD=0.92 CNY), corresponding PE is 36/28/23 times, respectively, the average valuation value of comparable companies in the mobile phone, IoT, and household appliances business in 2024 was 28 times, and the average PS valuation value of comparable companies in the electric vehicle business in 2024 was 1.4 times. It was covered for the first time, giving it an “increase in holdings” rating.

Risk Alerts

Downstream demand falls short of expectations, increased competition in the industry, risks such as falling short of expectations, fluctuating upstream raw material costs, etc., the risk of untimely delivery of goods due to rising shipping rates and port blockages, risk of iterative technology, deviation in industry space estimation, risk of third party data distortion (industry online and Aowei cloud network data do not represent the actual situation of the industry; data and trends are for reference only); public data used in research reports may have risks of information delays or untimely updates.