Morgan Stanley: Doubling of automotive business boosts Xiaomi's revenue in 2026, raising target price to 54 Hong Kong dollars.

Analyst Cherry Ma from Macquarie pointed out in the report that with the expected doubling of revenue from electric vehicle business and steady growth in the Internet of Things business, Xiaomi is expected to maintain revenue growth in 2026. Ma has lowered the forecast for smartphone sales, expecting a 13% decrease in sales in 2026, but higher average selling prices should offset the increase in storage costs, thus driving revenue in that sector. With the support of the launch of new car models and strong performance of existing models, electric vehicle sales are expected to exceed the company's target. The growth rate of the Internet of Things business may slow down, but the expansion of overseas markets and the process of product upscale should partially offset the soft domestic demand for home appliances. Macquarie has revised down its net profit forecast for Xiaomi in 2026 by 0.5% and adjusted the target price from 54.20 Hong Kong dollars to 54.00 Hong Kong dollars. The stock's previous closing price was 38.02 Hong Kong dollars.