Morgan Stanley: Raises the target price for Xiaomi Corporation-W to HKD 62, maintains "Overweight" rating
Morgan Stanley raised the target price for Xiaomi Corporation-W to HKD 62, maintaining an "Overweight" rating, and expects total revenue to exceed RMB 100 billion and net profit to exceed RMB 100 billion by 2030. The growth will be driven by Xiaomi's electric vehicles, smartphones, AIoT, and internet businesses, with a projected market value reaching RMB 2.5 trillion. The sales forecast for 2025 has been increased to 370,000 units, with gross margin rising to 20.7%. Revenue from traditional businesses is expected to grow from RMB 333 billion in 2024 to RMB 600 billion by 2030
According to the Zhitong Finance APP, Morgan Stanley released a research report stating that despite recent stock price fluctuations, it believes that Xiaomi Corporation-W (01810) can achieve growth as its market share continues to expand in the smartphone + AIoT + internet and electric vehicle businesses. Therefore, its stock price may break HKD 100 before 2030. As a result, Morgan Stanley raised the group's target price by 38%, from HKD 45 to HKD 62, maintaining an "overweight" rating.
With the launch of the Xiaomi SU7 Ultra marking the beginning of its luxury car journey, and as the Xiaomi electric vehicle and smartphone + AIoT + internet sectors become the group's dual growth engines, the firm expects the group's total revenue to exceed RMB 100 billion by 2030, with net profit exceeding RMB 100 billion. If this is the case, Xiaomi's market value will reach RMB 2.5 trillion, comparable to major peers BYD Company Limited (01211), Tesla, and Apple. Morgan Stanley believes that in the next decade, the success of Xiaomi's electric vehicles may accelerate the enhancement of its brand equity and see it gradually gain more market share in the high-end or luxury sectors. The firm sees upward risks in product mix, average selling price, and profit margins, and has raised its enterprise value estimate under the baseline scenario from RMB 204 billion to RMB 497 billion.
At the same time, the firm has raised its forecasts for automotive sales, average selling price (ASP), and gross margin for 2025-2026, with the 2025 sales forecast increased to 370,000 units and 2026 raised to 750,000 units; gross margins are expected to rise to 20.7% and 22.2%, respectively. Cumulative gross profit from electric vehicles is expected to increase from RMB 48.1 billion to RMB 67.6 billion from 2024 to 2026. Morgan Stanley predicts that total revenue from the three traditional business sectors will rise from RMB 333 billion in 2024 to RMB 451 billion in 2027, and RMB 600 billion by 2030. Profit is expected to increase from RMB 33.4 billion in 2024 to RMB 41 billion in 2027, and further to RMB 70 billion by 2030
