Dongfang Securities: Maintains Buy rating on Xiaomi Corporation-W with a target price of HKD 71.65

According to the Zhitong Finance APP, Dongfang Securities released a research report predicting that Xiaomi Corporation-W (01810) will have earnings per share of 1.63/2.06/2.60 yuan for the years 2025-2027 (the original forecast was 1.64/2.10/2.61 yuan, mainly adjusting operating revenue and some profit and loss items). Based on a comparable company's 26-year PE valuation of 32 times, the corresponding target price is HKD 71.65 (the RMB to HKD exchange rate is 1:1.094), maintaining a buy rating. Key Points from Dongfang Securities: Event: According to the Xiaomi Auto WeChat account, the delivery volume of Xiaomi cars exceeded 40,000 units in September 2025. Xiaomi's product innovation and implementation capabilities continue to strengthen Some investors believe that Xiaomi still has shortcomings in technological innovation and implementation capabilities, raising concerns about the sustainability of growth in its various businesses related to people, vehicles, and homes. The firm believes that Xiaomi's competitiveness in new feature development and product manufacturing has significantly improved, building a stronger corporate operating ecosystem. Xiaomi's ability to innovate and scale its products is expected to continue to enhance, driving sustained growth in its various businesses. Xiaomi's monthly car deliveries exceed 40,000 units, continuously boosting capacity expansion and subsidy measures In July 2025, Xiaomi's monthly car deliveries first exceeded 30,000 units, and in September, it further broke through 40,000 units, demonstrating excellent capacity expansion capabilities. As new capacity continues to ramp up, Xiaomi's delivery capability is expected to continue to improve. On October 24, 2025, Xiaomi launched a year-end purchase tax subsidy plan, allowing consumers to lock in orders by the end of November 2025, with the excess amount compared to 2025 being subsidized through a reduction in the final payment for the car in 2026. The firm believes that Xiaomi's continuous efforts in capacity expansion and subsidy measures are expected to help achieve the annual car delivery target and lay a solid foundation for the future sustained growth of its automotive business. In Q3 2025, mobile phone market share remains stable, driving sales growth and premiumization of the Xiaomi 17 series through product innovation In terms of mobile phone business, according to Canalys data, Xiaomi's global market share in Q3 2025 was 14%, maintaining its position as the third largest in the world. On September 25, 2025, Xiaomi launched the new Xiaomi 17 series smartphones. The Xiaomi 17 series features several innovative functions, including a back screen for the Pro and Pro Max models, and the Pro Max is equipped with super pixel screen technology. Xiaomi drives the premiumization of its mobile phone business through product innovation. According to Xiaomi President Lu Weibing at the K90 series launch event, the sales of the Xiaomi 17 series increased by 30% compared to the previous generation, with the Pro version accounting for over 80%. Risk Warning: Mobile phone sales may fall short of expectations, automotive business may underperform, AI implementation may not meet expectations, and the fair value of financial instruments accounted for at fair value may decline