3月25日，据小米集团港交所公告，公司将发行8亿股新股，约占当前已发行股本的3.2%，配售完成后约占扩大后股本的3.1%。预计净筹资额约425亿港元，主要用于加速业务扩张、研发投资及其他一般公司用途。
Source: Wall Street Journal.
Citigroup's analysis believes that despite the short-term dilution pressure on stock prices, the placement will optimize Xiaomi's financial structure, supporting the company's long-term development in areas such as AI research and development and electric vehicle production expansion.
$XIAOMI-W (01810.HK)$ What is the impact of the placement? Citigroup believes that the stock price may face pressure in the short term, but it has positive implications in the long term.
On March 25, according to Xiaomi Group's announcement on the Hong Kong Stock Exchange, the company will issue 0.8 billion new shares, accounting for approximately 3.2% of the current issued share capital. After the placement, it will account for approximately 3.1% of the expanded share capital. The net fundraising amount is expected to be around 42.5 billion Hong Kong dollars, mainly for accelerating Business expansion, R&D investment, and other general corporate purposes.
This time, XIAOMI-W's placement subscription price per share is HK$53.25, approximately a 6.5% discount compared to the closing price of HK$57 before the announcement. Today $XIAOMI-W (01810.HK)$ opened down 5.53%, since the beginning of this year, the increase in XIAOMI-W's Hong Kong stock has reached 56%.
In this regard, Citigroup's analysis believes that although the stock price faces dilution pressure in the short term, this move will optimize Xiaomi's financial structure and support the company's long-term development in areas such as AI research and development and electric vehicle production capacity expansion.
According to Citigroup, by the end of 2024, Xiaomi Group will have 3.1 billion yuan of net Cash, and it will generate a net operating Cash flow of 39.3 billion yuan in 2024. Considering that the company expects its capital expenditure in 2025 to exceed that of 2024 (10.5 billion yuan), this financing can meet the following demands:
Reduce debt levels and optimize the financial structure.
Support for R&D investments related to AI.
Provide funding for the expansion of electric vehicle production capacity to meet strong domestic demand and lay the foundation for potential overseas expansion.
Improve the shareholder structure and eliminate short-term market concerns.
Citibank maintains a 'Buy' rating on Xiaomi with a target price of HKD 73.5, indicating a potential upside of 28.9%. The valuation is based on the Sum of the Parts (SOTP) valuation method projected for 2026:
The core businesses of Smart Phones, IoT, and Internet services are given a PE of 28.5 times (1 standard deviation above the 3-year average).
The smart electric vehicle business is valued at 1.5 times sales (above industry average, considering the higher average selling price).
Citibank believes these valuation multiples are in line with the company's growth prospects, and the target price is equivalent to 33 times the adjusted EPS for 2026.
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Today, after hitting the high near 24,000 in the early session and entering bearish positions, the index fell sharply by nearly over 600 points, immediately recouping yesterday's losses significantly.
Moreover, today it broke the new high again, reaching a maximum of 24,076, but by the end of the market, it fell back by about 70 points, producing a bearish candle. The current trend has not yet been broken, but from the previous low until now, it has risen close to 6,000 points. It is believed that those with positions can continue to hold until there is a clear trend reversal for profit-taking. Those without positions can wait for a pullback to get in. Actually, it is hoped for a quick pullback, as it allows for entry and also provides a healthy breath.
Currently, the outlook remains the same as before. It is believed that even if there is a pullback, it shouldn't be too deep. However, if Futures fail to stabilize and close below 22,350, there may still be room for decline. The chance of Futures falling below 21,400 in the short term should be low, so it is considered that if a significant pullback occurs, it presents a good opportunity to incrementally go long. Recently, there has been a consistent approach to not hold positions overnight, only focusing on immediate trades, as there is no high chasing and no casual short selling.
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