CICC: Maintains Xiaomi Corporation-W "Outperform Industry" Rating, Raises Target Price to HKD 76.9

According to the Zhitong Finance APP, China International Capital Corporation (CICC) released a research report stating that Xiaomi Corporation-W (01810) held a Xiaomi People, Vehicle, and Home Ecosystem Launch Conference, unveiling the Xiaomi YU7, Xiaomi AI Glasses, and multiple new IoT products. Considering the strong pre-orders for the Xiaomi YU7, the adjusted net profit forecasts for 2025/2026 have been raised by 2%/17% to RMB 49.048 billion/RMB 66.384 billion. The current stock price corresponds to a price-to-earnings ratio of 28.0/20.4 times the adjusted net profit for 2025/2026. The rating of outperforming the industry is maintained, and taking into account the adjustments in profit forecasts and the upward shift in industry valuation, the target price has been raised by 9.9% to HKD 76.9 (based on the SOTP valuation method), corresponding to a price-to-earnings ratio of 37.8/27.5 times the adjusted net profit for 2025/2026, with an upside potential of 35.1%.

CICC's main viewpoints are as follows:

The Xiaomi YU7 achieved over 289,000 pre-orders in the first hour, with high product capability driving the new car to break into new markets.

This time, Xiaomi launched three models of the YU7: the standard version, Pro version, and Max version, with a starting price of RMB 253,500. In terms of performance, the YU7 uses the Xiaomi Super Motor V6s Plus, achieving a 0-100 km/h acceleration in 3.23 seconds; in terms of battery life, the entire YU7 series features long-range capabilities with an 800V silicon carbide high-voltage platform for fast charging; in terms of intelligence, the entire YU7 series is equipped with high-specification hardware for assisted driving (including the NVIDIA Thor chip, lidar, 4D millimeter-wave radar, 11 high-definition cameras, and 12 ultrasonic radars) and a 10 million Clips version of Xiaomi's end-to-end assisted driving. According to official data from Xiaomi Auto, the YU7 achieved over 289,000 pre-orders in the first hour. The firm believes that the strong pre-orders for the Xiaomi YU7 reflect consumer recognition of Xiaomi's high cost-performance products, combined with brand momentum, showcasing strong product capability and a breaking-the-circle effect, achieving the effect of supply creating new demand.

Xiaomi launched its first AI glasses, exploring new terminals in the edge AI era.

Xiaomi's first AI glasses have achieved breakthroughs in "lightweight, high performance, and long battery life": 1) In terms of weight, the frame weighs as little as 40g, lower than mainstream AI glasses; 2) In terms of performance, it features a 12-megapixel ultra-transparent optical lens with an f/2.2 large aperture and a 105-degree ultra-wide angle; additionally, the glasses are equipped with "Super Xiao Ai," endowing the product with strong multimodal intelligent interaction capabilities; 3) In terms of battery life, the battery capacity is 64% higher than similar products from Meta.

The "People, Vehicle, and Home Ecosystem" strategy is steadily advancing, and the new product launches are expected to continuously boost brand momentum.

The firm believes that the unexpectedly high number of pre-orders for the Xiaomi YU7 and the launch of new products such as the first AI glasses are likely to continue to boost brand momentum. Looking ahead, the firm is optimistic about Xiaomi's adherence to the four core strategies of "scale ecology + technology hardening + brand premiumization + market globalization." In the future, as the "People, Vehicle, and Home Ecosystem" continues to optimize and integrate at the user level and underlying systems, its important entry position in various hardware fields such as mobile phones, automobiles, IoT, AI glasses, and robots may be further highlighted Risk Warning: Global macroeconomic factors affect the demand for smartphones and IoT products, and smart car sales are below expectations