CICC: Lowers Xiaomi Corporation-W target price to HKD 70, expects next quarter's Xiaomi SU7 delivery volume to reach 81,000

CICC released a research report stating that considering the downward shift in industry valuation, it has lowered the target price for Xiaomi Corporation-W by 9% to HKD 70, corresponding to adjusted net profit price-to-earnings ratios of 34.4 times and 25.1 times for this year and next year, respectively, still leaving a 29.6% upside potential. The firm maintains an "outperform the industry" rating. It is expected that Xiaomi's revenue in the second quarter of this year will increase by 32.71% year-on-year to RMB 117.967 billion, with adjusted net profit expected to rise by 64.84% year-on-year to RMB 10.179 billion. In terms of mobile phone business, considering the intense competition in the low-price market, Xiaomi's ASP for the quarter is expected to slightly decline year-on-year, with mobile phone revenue decreasing by 1.6% year-on-year to RMB 45.792 billion, and gross margin also decreasing by 0.6 percentage points year-on-year to 11.5%. The Internet of Things (IoT) revenue in the second quarter is expected to grow by 36% year-on-year to RMB 36.394 billion, with gross margin increasing by 3.3 percentage points year-on-year to 23%. The revenue from the internet services segment is expected to increase by 11% year-on-year to RMB 9.175 billion in the second quarter, with gross margin decreasing by 2.3 percentage points year-on-year to 76%, maintaining an overall healthy level. Additionally, the firm also expects Xiaomi's SU7 second-quarter delivery volume to be 81,000 units, corresponding to revenue of RMB 25.92 billion. The gross margin is expected to increase by 1 percentage point quarter-on-quarter to 24.2%