Deutsche Bank: Upgrades Xiaomi Corporation-W's earnings forecast for this year by 6.5% and raises target price to HKD 71.5

Deutsche Bank released a research report stating that, given the better-than-expected profitability of Xiaomi Corporation-W, it has raised its net profit forecast for Xiaomi this year by 6.5% and adopted a higher gross margin assumption. Using the discounted cash flow method, the target price has been increased from HKD 70 to HKD 71.5, maintaining a "Buy" rating. The bank noted that Xiaomi's net profit for the entire year last year rose 35.4% year-on-year to RMB 23.7 billion, exceeding the market expectation of RMB 20.1 billion. This means that the net profit for the fourth quarter of last year increased by 91% year-on-year and 69% quarter-on-quarter to RMB 9 billion, with the adjusted net profit for the quarter reaching a historical high of RMB 8.32 billion, up 69% year-on-year and 33% quarter-on-quarter. The bank pointed out that a key positive surprise was that the adjusted losses from the smart electric vehicle and other new project businesses were less than expected, with a year-on-year decrease of 71% and a quarter-on-quarter decrease of 53% to RMB 700 million in the fourth quarter of last year, benefiting from improved gross margins, increased sales of high-margin accessories, reduced fixed costs due to operating leverage, and decreased external component procurement