Goldman Sachs lowers Xiaomi's target price to 53.5 yuan, third-quarter performance slightly exceeds expectations

Goldman Sachs research report indicates that Xiaomi (01810.HK) slightly exceeded expectations in its third-quarter performance, with a year-on-year revenue growth of 22%, 2% higher than the bank's expectations, due to higher revenue from the internet and electric vehicles. Adjusted net profit grew by 81% year-on-year, driven by improved gross margins in the Internet of Things and increased other income and investment income, which were 12% and 15% higher than the bank's and market expectations, respectively.

The bank expects smartphone shipments to reach 171 million in 2025, decreasing to 169 million in 2026, with average selling prices increasing by 3% and 5% in the fourth quarter of this year and next year, respectively. For electric vehicles, the delivery forecast for 2025 has been raised to over 400,000 units, while the 2026 forecast remains at 800,000 units.

At the same time, the bank has lowered its net profit forecast for 2026 to 2027 by 4% to 5% to reflect greater pressure on smartphone gross margins; the net profit forecast for 2025 has been raised by 3% due to the better-than-expected third-quarter performance. The target price has been lowered from HKD 56.5 to HKD 53.5, with a rating of "Buy."