"Big Banks" Citigroup: The cost structure of Xiaomi's high-end smartphones is still better than that of mid-to-low-end smartphones, maintaining a "Buy" rating

Citi's research report pointed out that Xiaomi (01810.HK) held a product launch event during Christmas, introducing the Xiaomi 15 Ultra and AIoT products. According to IDC data, the shipment volume of smartphones priced over $800 from Xiaomi achieved a 56% year-on-year growth in the first nine months of 2025, indicating a significant breakthrough in the ultra-high-end market above 6,000 RMB. Citi believes that with the rise in memory prices, the cost structure of high-end smartphones remains superior to that of mid-to-low-end smartphones.

Xiaomi also launched the Buds 6, with a suggested retail price of 699 RMB; the Central Air Conditioner Pro equipped with dual turbo fans, with a suggested retail price of 25,999 RMB; the Smart Home Panel 11, with a suggested retail price of 1,299 RMB; the Watch 5, with a suggested retail price of 1,999 RMB; and the Mijia Diffuse Ceiling Light, with a suggested retail price of 1,899 RMB.

Based on solid long-term visibility, Citi adopted a Sum of the Parts (SOTP) valuation method and set a target price of 50 HKD for Xiaomi based on 2026 forecasts; rating "Buy." In Citi's SOTP valuation, the earnings valuation multiples for the core smartphone, IoT, and internet services businesses are set at 18.9 times, while the smart electric vehicle business is valued at 1.5 times sales