---
title: "Credit Suisse lowered Xiaomi's target price by 30% to HKD 30.45 and cut earnings forecasts, citing overly optimistic market predictions and soaring memory costs"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/277720350.md"
description: "Fubon Securities lowered Xiaomi's target price by nearly 30% to HKD 30.45, mainly due to soaring memory costs and overly optimistic market forecasts. It is expected that Xiaomi's smartphone sales will plummet by 55%, with gross margin dropping to 4%, hitting a historical low. Fubon Securities also downgraded its revenue forecasts for Xiaomi's automotive and Internet of Things segments, believing that the three major businesses are under pressure and that last year's fourth quarter performance was below expectations"
datetime: "2026-03-04T03:56:09.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/277720350.md)
  - [en](https://longbridge.com/en/news/277720350.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/277720350.md)
---

> Supported Languages: [简体中文](https://longbridge.com/zh-CN/news/277720350.md) | [繁體中文](https://longbridge.com/zh-HK/news/277720350.md)


# Credit Suisse lowered Xiaomi's target price by 30% to HKD 30.45 and cut earnings forecasts, citing overly optimistic market predictions and soaring memory costs

Fidelity published a report estimating that for the vast majority of smartphone original equipment manufacturers (OEMs), memory costs will soar by 3.6 times this year. As a result, the firm estimates that Xiaomi-W (01810.HK) smartphone shipments will plummet by 55%, partially offset by a 31% increase in average selling price. The main cuts are concentrated in mid to low-end smartphones, with about 60% of Xiaomi's shipment volume selling at an average price below $150. The firm predicts that Xiaomi's smartphone gross margin will drop by 7 percentage points this year, reaching a historic low of 4%.

In addition, the firm has lowered its forecast for Xiaomi's automotive gross margin, leading to its revenue and EBIT predictions for Xiaomi being 16% and 34% lower than those of market peers, respectively. Using a classified aggregation method, the firm has significantly reduced Xiaomi's target price from HKD 43.36 by nearly 30% to HKD 30.45, maintaining a "Hold" rating, indicating that the market's forecasts for the company are overly optimistic, and that memory costs pose a downside risk to earnings.

Fidelity expects Xiaomi's performance in the fourth quarter of last year across its three major business segments (smartphones/IoT/automobiles) to fall short of expectations. The firm has revised down its forecasts for Xiaomi's fourth quarter, reflecting the pressures faced by these three major businesses. Third-party data indicates that Xiaomi's smartphone shipments in the fourth quarter of last year fell by 13%, a decline greater than expected; due to the larger-than-expected increase in memory costs, the smartphone gross margin is expected to drop to below 9% (originally estimated at 10%). In terms of IoT, the firm has reduced Xiaomi's IoT revenue forecast for the fourth quarter by 25%, due to weakened demand for home appliances and wearable products resulting from reduced government subsidies. Even if subsidies are restored in the first quarter of this year, Fidelity still lowers its long-term revenue forecast by 4% and maintains its gross margin forecast. Regarding Xiaomi's automotive segment, the firm expects the gross margin in the fourth quarter to fall short of expectations due to reduced sales of the SU7 Ultra and tax incentives driving new orders in November last year. The firm’s forecasts for Xiaomi's fourth quarter revenue and EBIT are 2% and 23% lower than the market, respectively.

Fidelity has cut its forecasts for Xiaomi's automotive shipments for this year and next by 16% and 13%, respectively. The latest forecasts reflect a significant reduction of 35% in Xiaomi's EBIT predictions for smartphones and IoT this year, with future forecasts lowered by 10%

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