Citigroup: Xiaomi-W (01810) target price maintained at HK$42, rated "Buy".

Citigroup released a research report stating that it maintains a target price of HK$42 for XIAOMI-W (01810) and rated it as "buy". The new Xiaomi car model, SU7, has a selling price of 219,900 yuan. Within 34 minutes of sales opening, 15,000 SU7 orders were already received. The bank mentioned that considering the increased cost of gifts and components, the gross profit margin of SU7 may be lower than the initial launch, so Xiaomi is offering a 20,000 yuan discount and promising to deliver the cars within 5 weeks. The bank stated that it has already prepared inventory for this release since January. The report mentioned that Xiaomi recently launched large models such as MiMo-V2-Pro, a large model with a total parameter exceeding 1000B and featuring 42B activation parameters. This model climbed to the eighth position on the Artificial Analysis Intelligence Index within a week of its release. Xiaomi has pledged to invest 60 billion yuan in AI over the next three years. It is worth noting that Xiaomi's HAD (Holistic All-Dimensional end-to-end Intelligent Driving System) and XLA MiMo Embodied model are some of its applications, while Xiaomi's complete IoT ecosystem can provide better scenarios for AI applications. Investors inquired about how to evaluate the value of Xiaomi's LLMs, and the bank conducted a scenario analysis for reference. A simple scenario analysis is as follows: based on China's 187 million active smartphone users, assuming 10% of them convert to paid users willing to pay a monthly subscription fee of over 10 yuan, and then calculating with a market-to-sales rate of 30 times, it could generate a valuation of over 67 billion yuan.