Yamato: Reaffirm XIAOMI-W (01810) "Outperform" rating, target price raised to 31.5 Hong Kong dollars.

Daiwa released a research report stating that it reiterates its "outperform" rating on XIAOMI-W (01810), raising its earnings per share forecast for the fiscal years 2024 to 2026 by 3% to 5%, and increasing its target price from 30.5 Hong Kong dollars to 31.5 Hong Kong dollars. Due to Xiaomi's third-quarter IoT revenue and network service gross profit margin exceeding expectations, its adjusted net profit exceeded market expectations by 14%. The bank mentioned that Xiaomi management aims to ship 170 million smartphones in 2024, surpassing market expectations of 167 million units. The bank expects smartphone gross profit margin to increase to 12% in the fourth quarter of this year and further improve in the 2025 fiscal year. It also estimates that Xiaomi's shipment volume will reach 180 million units in the 2025 fiscal year. Daiwa stated that Xiaomi's electric car gross profit margin reached 17.1% in the third quarter, surpassing the market's expectation of 15.3%. The bank also expects that sales of the SU7 in the third quarter will bring in a operating profit of 700 million RMB, and anticipates an improvement in the gross profit margin of electric cars in the fourth quarter of the 2024 fiscal year and the 2025 fiscal year.