CMB International: Downgrades the target price of Xiaomi Corporation-W to HKD 61.3, expects a 60% year-on-year increase in adjusted net profit for the third quarter
Zhaoyin International released a research report stating that it expects Xiaomi Corporation-W's adjusted net profit in the third quarter to grow by 60% year-on-year to 10.01 billion RMB, in line with market expectations. Although the material (BOM) costs for smartphones have increased, the firm anticipates the company's gross margin in the third quarter to be 22.9%, higher than the market forecast of 22.5%. The firm reiterated its "Buy" rating for the company, lowering the target price from HKD 62.96 to HKD 61.3. The firm maintains a positive outlook for Xiaomi's fourth-quarter prospects. In terms of smartphones, it believes that the Xiaomi 17 Pro and Pro-max can bring a higher sales mix for the company; Xiaomi's electric vehicle deliveries are strong, profitability is improving, and there is potential for capacity expansion; the internet business is growing steadily, with a gross margin expected to reach 75%. Overall, the firm slightly lowered its adjusted net profit forecast for the fiscal years 2025 to 2027 by 3% to 4% to reflect the weakness in the smartphone business, the electric vehicle business reaching breakeven in the third quarter, and the rising BOM costs
According to Zhitong Finance APP, CMB International released a research report stating that it expects Xiaomi Corporation-W (01810) to achieve a year-on-year adjusted net profit growth of 60% to RMB 10.01 billion in the third quarter, in line with market expectations. Although the material (BOM) costs for smartphones have risen, the firm anticipates the company's gross margin for the third quarter to be 22.9%, higher than the market forecast of 22.5%. The firm reiterated its "Buy" rating for the company, lowering the target price from HKD 62.96 to HKD 61.3.
The firm maintains a positive outlook for Xiaomi's fourth quarter. In terms of smartphones, it believes that the Xiaomi 17 Pro and Pro-max can bring a higher sales mix for the company; Xiaomi's electric vehicle deliveries are strong, profitability is improving, and there is potential for capacity expansion; the internet business is growing steadily, with a gross margin expected to reach 75%. Overall, the firm slightly lowered its adjusted net profit forecast for the fiscal years 2025 to 2027 by 3% to 4% to reflect the weakness in the smartphone business, the electric vehicle business reaching breakeven in the third quarter, and the rise in BOM costs
