CMC International: Reiterates "Buy" rating on XIAOMI-W (01810) and raises target price to HK$54.53.

CMB International has released a research report stating that it has reiterated a "buy" rating on XIAOMI-W (01810) with a target price raised to 54.53 Hong Kong dollars. The bank expressed confidence in Xiaomi's core business capabilities and the growth of its electric vehicle business, raising its earnings per share forecasts for the fiscal years 2024 to 2027 by 8% to 22%. CMB International stated that Xiaomi will announce its fourth-quarter performance for 2024 in mid-March, predicting improvements in the smartphone product portfolio, the boost from national subsidy policies for smartphone and IoT product sales, as well as an increase in the gross profit margin for electric vehicles, which will drive fourth-quarter revenue and adjusted net profit to increase by 42% and 44% year-on-year, reaching 103.9 billion yuan and 7 billion yuan, respectively, exceeding market expectations by 0.5% and 9%. Looking ahead to 2025, the bank remains optimistic about Xiaomi's expansion of smart phones in Latin America, Europe, the Middle East, Africa, and Southeast Asia markets. It currently believes that the order backlog of Xiaomi SU7 is large, and the introduction of future SUV models such as Xiaomi YU7 and continued improvement in business profitability will also be helpful.