The Zhitong Finance app learned that Huatai Securities released a research report stating that it maintains the Xiaomi Group-W (01810) “buy” rating, with a target price of HK$20. The Group's third-quarter performance exceeded expectations, and gross margin hit a record high in a single quarter since listing. It was decided to raise Xiaomi's non-GAAP net profit forecasts for 2023-2025 by 12%, 10%, and 4%, respectively, to 16.6 billion, 14.1 billion and 15.9 billion yuan, respectively.

The bank said that considering the increase in the market share of Xiaomi and the huge sales of the Xiaomi 14 series, the 2025 smartphone shipment forecast was raised by 5%, and the 2023 ASP forecast was raised by 8% and 5% respectively for 2023 and 2025. Given the high gross profit margin in the third quarter of this year, and the bank's belief that adjustments in some companies in the supply chain and higher operating efficiency, it is expected to drive the long-term gross margin of Xiaomi smartphones to a central upward trend.

According to the report, the gross margin of Xiaomi's smartphone business for the third quarter of this year was 16.6% (up 3.3 percentage points from quarter to quarter), mainly due to lower raw material costs, inventory impairment recovery, and revenue structure optimization. Looking ahead to the fourth quarter of this year, due to the huge sales of the Xiaomi 14 series, it is expected that the quarterly shipment volume will remain basically the same from season to season, while the average selling price (ASP) will increase from season to quarter. The bank believes that thanks to changes in some supply chain companies and more efficient operations, the long-term gross margin center of the mobile phone business will improve compared to the past.