CLSA issued a report forecasting that Xiaomi's (01810.HK) total revenue and adjusted net profit for the third quarter will achieve year-on-year growth of 22% and 60%, respectively, reaching RMB 112.9 billion and RMB 10 billion, driven by robust electric vehicle (EV) sales. Due to declines in shipments in China and India, smartphone revenue may decrease by 3% year-on-year; meanwhile, the AIoT business is expected to see a slowdown in growth to 5% year-on-year as trade-in subsidies are reduced. However, EV deliveries further increased to 109,000 units, with an average selling price of approximately RMB 260,000, and the segment may have already reached breakeven.
CLSA expects Xiaomi’s total revenue and adjusted net profit for the fourth quarter to increase by 15% and 16% year-on-year, respectively, primarily due to a recovery in smartphone growth and continued increases in EV deliveries, despite challenges from a higher base for the AIoT business. The approval for production at Xiaomi’s second EV plant is anticipated to act as a catalyst for share price re-rating. CLSA maintains its 'High Conviction Outperform' rating on the stock, with a target price of HKD 69.
