Japanese: XIAOMI-W0181076 Daiwa: Raises XIAOMI-W (01810) Target Price to HK$76, Second Quarter Revenue and Adjusted Net Profit Roughly in Line with Expectations.

Daiwa released a research report stating that the revenue and adjusted profit of XIAOMI-W (01810) in the second quarter roughly met market expectations. With the boost from higher average selling prices of SU7 Ultra and economies of scale, Xiaomi's gross profit margin for electric vehicles in the second quarter reached 26.4%. The bank expects the gross profit margin for electric vehicles in the third quarter to further increase to 28%. This could potentially allow Xiaomi's car business to achieve breakeven in a single quarter or month in the second half of the year. Based on the upward revision of the gross profit margin forecast for electric vehicles, Daiwa raised its earnings forecast for Xiaomi for the years 2025 to 2027 by 2% to 9% per share. They reiterated a "buy" rating and increased the target price from HK$72 to HK$76. On the mobile phone side, due to limited product releases, the bank is cautious about Xiaomi's shipment volume in the third quarter, expecting 42.2 million units to be shipped in the third quarter and a total of 172 million units for the year, compared to Xiaomi's target of 170 million to 175 million units for the year.