小米集团-W(1810.HK):低点已过 前路向好

Xiaomi Group-W (1810.HK): The low point has passed and there is a way forward

國泰君安 ·  03/31  · Researches

Introduction to this report:

Q4 revenue and profit were affected by the external environment, but IoT and the Internet performed well; looking ahead to 2023, equal emphasis on scale and profit will be the main line, and a steady upward trend in revenue and profit will be established.


Maintain the increase in holdings. Revenue of 280 billion yuan/ -14.7% in 2022 and adjusted net profit of 8.5 billion yuan/ -61% were in line with expectations. The adjusted net profit forecast for 2023-24 is 110/14 billion yuan, a growth rate of 28/ 27%, and the forecast is that the adjusted net profit for 2025 will grow 23% to 1.7 billion yuan, maintaining the increase in holdings.

Q4 Although revenue and profit are under pressure, a steady upward trend will be established, and the high-end strategy continues to achieve good results.

1) Q1-Q4's single-quarter revenue increased by 735/702/707/66.6 billion yuan respectively -5/-20/-10/ -22%, adjusted profit of 28.6/20.8/21.2/1.46 billion yuan increased -53/-27/-59/ -67%. Factors such as the disturbance of the epidemic, investment in car building+mobile phone after-sales, etc., put pressure on net profit, but as the external environment improved, it was optimistic that 2023 would steadily rise; 2) Global smartphone shipments in 2022 were 150 million units/ -11.7% the lowest since 2014. The company's shipment volume was the lowest since 2014. With a market share of 150,500 million units ranked third, Q1-Q4 ranked third with 38.5/40.5/40.5/40.2/32.7 million respectively -22/-8/-8/ -26%; 3) Overseas revenue of 137.8 billion yuan/-15.8% in 2022 accounted for 49.2%. The top three smartphone shipments in 54 countries and regions in the world were in the top five; 4) Some core data: By the end of 2022, the AIoT platform had connected to IoT devices (excluding smartphones and laptops) 589.4 million/+ 35.8%; in December, the global MIUI monthly activity was 582.1 million/ +14.4%, the monthly activity of Xiao Ai's students was 107 million/ +23.3%, and the Mijia App had a monthly activity of 63.9 million/ +42%.

The high-end strategy drives the continuous increase in smartphone ASP, but gross margins are affected by extended warranty policies. 1) Business revenue by Q4: smartphone revenue of 36.7 billion yuan/ -27.3% accounting for 55.5%, IoT 21.4 billion yuan/ -14.4% accounting for 32.5%; Internet service 71.7 yuan/ -1.4% accounting for 10.9%; 2) Q4 overall gross profit margin 17.2% /+0.1pct, of which smartphones 8.2% /-1.9 pct, IoT 14.3% /+1.3pct, and Internet services 71.5% /-4.6pct; looking at a month-on-month comparison, IoT and the Internet performed well, with growth rates of + 12.5/ +1.5%; 3) Smartphones: Q4 In the domestic price range of 3000-4000 yuan, smartphone sales were first in the 3000-4000 yuan price range, second in sales in the 4,000-5,000 yuan price range; ASP reached 1,121 yuan/ -2% (1,111 yuan/+1.2% hit a new annual high for the whole year). The pandemic/macro environment/inventory removal has had a certain impact, but at present, inventories have improved dramatically, and only some channel inventories; 4) R&D expenses of 16 billion yuan/ +21.7% accounted for 5.7% /+1.7pct of revenue in 2022.

Offline stores are rapidly recovering, and progress in car construction is worth looking forward to. 1) The average monthly single-store GMV grew more than 30% compared to 2022Q4; 2) New businesses such as car building in 2022 invested 3.1 billion yuan, and we expect to continue to increase R&D investment in 2023-24; up to now, the automobile R&D team has about 2,300 people, and the 2024H1 mass production target has not changed; 3) Management upgrade, two new committees were set up in early 2023, which is optimistic that internal collaboration and decision-making efficiency will be further enhanced; 4) There are rich implementation scenarios in the ChatGPT field, and there is huge data support, and the future is promising Invest more.

Risk warning: Continued downturn in the mobile phone market, geopolitical risks, new business risks, exchange rate fluctuations, etc.

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