Citigroup: XIAOMI-W (01810) Xiaomi's large model price reduction will drive a significant increase in token usage, reiterates "buy" rating.

Citigroup released a research report stating that XIAOMI-W (01810) has permanently reduced the API price of its "MiMo-V2.5" series large language model (LLM) by up to 99%. They expressed their view that this aggressive price reduction measure took effect on May 27 and is being implemented globally to stay consistent with competitors. The firm reiterated their "buy" rating and maintained a target price of HK $37. Previously, DeepSeek had permanently lowered its V4 Pro API price by 75% four days ago. Xiaomi's management revealed in a performance briefing on May 26 that most of its AI revenue comes from tokens, with the Pro and Max versions of MiMo accounting for over 50% of token usage, over 50% of token usage coming from overseas, over 30% of paid users, and high retention rates. Citigroup believes that Xiaomi's MiMo large model is not limited to internal use, and this aggressive pricing strategy will drive a significant increase in token usage, as well as help train and improve the performance of its large language model. The firm is optimistic about Xiaomi's monetization potential in areas such as intelligent agents or Miclaw functions, although there is no clear timeline at the moment, but they expect upgraded versions to be released later this year.