Xiaomi hits a new high again, and major firms can't adjust their target prices in time.

Xiaomi Group's stock price once rose more than 2% during the trading session, reaching a new historical high and approaching the HKD 50 mark.

DBS: Raises Xiaomi's target price to HKD 52, AI expected to drive hardware sales

DBS published a research report stating that Xiaomi is enhancing its artificial intelligence capabilities, anticipating that the group can strengthen the competitiveness of its smartphones and Internet of Things products through AI, allowing Xiaomi to surpass other Android competitors. They also believe that Xiaomi's diversified revenue sources will help mitigate the impact of weak smartphone demand in the Chinese market. DBS currently predicts that the shipment volume of the Xiaomi 15 series will be 30% higher than that of the Xiaomi 14 series, positioning Xiaomi favorably in the AI-driven smartphone replacement cycle in 2025. They forecast that the shipment volume of Xiaomi's high-end smartphones will grow by 34% and 19% for last year and this year, respectively, exceeding market expectations by 2% and 6%. The firm maintains a "Buy" rating, raising its profit forecasts for the next two years by 13.4% and 15.3%, and increasing the target price from HKD 36 to HKD 52, expecting a 65% increase in profits by 2025.

Bank of America: Raises target price from HKD 37 to HKD 52

Bank of America Securities published a report stating that after an on-site visit to Xiaomi's ( 01810.HK) Beijing automotive factory on February 12, they are more confident in Xiaomi's competitive advantage in the electric vehicle sector. With extensive knowledge of consumer electronics and strong design capabilities, they believe Xiaomi has established a strong brand image, coupled with rapidly increasing production capacity, which is expected to lead to sustainable profit growth and drive valuation increases.

Bank of America Securities expects smartphone shipments to reach 190 million and 200 million units in 2026 and 2027, respectively. Regarding the IoT business, they believe there is still growth potential in overseas markets, as profit margins are typically higher there. Additionally, an increase in the home appliance product mix and more in-house designs may drive further profit expansion. The enhancement of the automotive business's brand image may also create synergies for the smartphone or IoT-5G business.

Bank of America Securities reiterates Xiaomi's "Buy" rating and raises profit forecasts for 2025 to 2026 by 2% to 6%, increasing the target price from HKD 37 to HKD 52.

Financial report to be released on March 18, institutions optimistic

Huatai expects Xiaomi's overall revenue in Q4 2024 to grow by 43% year-on-year, with a gross margin increase of 0.3 percentage points quarter-on-quarter, and a net profit attributable to the parent company to grow by 32% year-on-year. This includes a 21% year-on-year growth in revenue from its core businesses, including smartphones, IoT, and internet services, with the automotive business achieving revenue of HKD 16.5 billion, a quarter-on-quarter increase of 71%. Looking ahead, they believe that the SUV expected to be released in Q2 2025 will drive rapid revenue growth for the group, with a recovery in smartphone gross margins and reduced losses in the automotive sector, leading to a 52% increase in Non-GAAP profits in 2025. The new target price of HKD 55.1 includes a valuation of HKD 14.9 per share for Xiaomi's automotive businessJP Morgan: The Valuation Discount of Chinese Tech Stocks Remains Significant

JP Morgan stated that it is optimistic about the performance of Chinese tech stocks relative to U.S. tech stocks, noting that despite the recent rebound, the valuation discount of Chinese tech stocks remains significant. JP Morgan assigned a "Neutral" rating to developed markets, with U.S. stocks also receiving a "Neutral" rating due to expensive valuations, risks to corporate earnings, and overly concentrated investor positions