HSBC: Lowering Xiaomi Group-W (01810.HK) target price to 50 Hong Kong dollars. Electric vehicle momentum is good but core business profitability is weaker than expected.

According to the Wisdom Finance App, CICC released a research report stating that Xiaomi Group-W's (01810.HK) electric vehicle momentum is better than expected, with delivery volume reaching around 110,000 units in the third quarter, and the business may turn profitable. Although the approval for Beijing's second factory has been delayed, delivery volume in the fourth quarter may further rise. With healthy demand, the introduction of a new large SUV next year, and export opening in 2027, the bank expects a 23% increase in electric vehicle shipments in 2027, as well as improved profitability, with a projected net profit margin of 4.5% in the second half of 2027. Considering the sharp deterioration in core business, the bank has lowered its operating profit forecast for Xiaomi's core business in 2026 and 2027 by 2% and 1%, maintaining a "neutral" rating and lowering the target price from HK$60 to HK$50.