--- title: "Grain Factory Researcher Will: Xiaomi Group's 24Q1 earnings report preliminary update" type: "Topics" locale: "en" url: "https://longbridge.com/en/topics/20954617.md" description: "The "Grain Factory Review" channel is dedicated to reviewing the quarterly financial reports, product launches, market performance, or other major events of the Grain Factory. It does not pursue timeliness or efficiency but primarily provides readers with the perspectives of Grain Factory researchers.$XIAOMI-W(1810.HK) Xiaomi Group will release its Q1 2024 financial report on May 23. This morning, research institutes from brokerages such as China International Capital Corporation (CICC) and Bank of China International (BOCI) have successively released their..." datetime: "2024-05-08T02:22:35.000Z" locales: - [en](https://longbridge.com/en/topics/20954617.md) - [zh-CN](https://longbridge.com/zh-CN/topics/20954617.md) - [zh-HK](https://longbridge.com/zh-HK/topics/20954617.md) author: "[粮厂研究员Will](https://longbridge.com/en/profiles/7174771.md)" --- # Grain Factory Researcher Will: Xiaomi Group's 24Q1 earnings report preliminary update **The "Grain Factory Review" channel is dedicated to reviewing Grain Factory's quarterly financial reports, product launches, market performance, or other major events. It does not pursue timeliness or efficiency but primarily provides readers with the perspectives of Grain Factory researchers.** $XIAOMI-W(01810.HK) Xiaomi Corporation will release its Q1 2024 financial report on May 23. This morning, research institutes from brokers such as China International Capital Corporation (CICC) and Bank of China International (BOCI) have successively released their forecasts for Q1 performance. My preliminary views are as follows: **1\. Q1 2024 Group Revenue and Adjusted Profit:** The group's overall revenue is expected to be around RMB 74 billion, with adjusted profit around RMB 5.5 billion. After accounting for RMB 2.5 billion from the car and innovation businesses, the core adjusted net profit is around RMB 8 billion (a record high for a single quarter). Compared to Q1 2023, which was a recent low with revenue of only RMB 59.5 billion and adjusted net profit of RMB 3.2 billion, **this quarter's financial report is expected to show significant year-on-year growth**. < **2\. Q1 2024 Smartphone Business Performance:** According to Canalys data, global shipments in Q1 reached 40.7 million units, up 33% year-on-year, with global market share rising to 14%. The average selling price (ASP) remained stable, and gross margin is expected to be around 14.5%, significantly higher than the 11.2% in Q1 2023 but lower than the 16.4% in Q4 2023. **The reason is the well-known increase in BOM costs, particularly for panels and memory. I recommend continuing to monitor the gross margin trend for the smartphone business in Q2**. **3\. Q1 2024 IoT Business Highlights:** IoT revenue is expected to exceed RMB 20 billion, up over 20% year-on-year, with gross margin nearing the historical high of 20%. This is driven by two factors: (1) the increasing proportion of high-value home appliances (air conditioners, refrigerators, washing machines) in the IoT product mix; (2) the premiumization strategy, which has led to selective product launches and promotions, positively impacting gross margin. **4\. Q1 2024 Financial Report and Car Business:** The financial report is unlikely to include detailed financial data for the car business, but operational data (already widely circulated) is expected to be released, including: (1) 88,000 confirmed orders for the SU7 as of April 30, with 7,058 deliveries; (2) 52% of users are Apple users, 40-50% are female, and 30% are BBA (BMW, Mercedes-Benz, Audi) users—all very positive; (3) the minimum delivery target for 2024 is 100,000 units. **5\. Additional Insights on the Car Business:** (1) **From a financial perspective**, the car business shares similar focus areas with the smartphone business: **shipments (sell-in and sell-out for phones, production and delivery for cars), ASP, and gross margin**. Shipment data is high-frequency and publicly available, with weekly updates. Xiaomi's production ramp-up will be visible. I’d like to highlight that Lei Jun’s statement of a minimum 100,000 deliveries implies **Xiaomi has the capacity to deliver at least 150,000 units (my optimistic expectation is monthly production reaching 20,000 by year-end). Thus, a base case of 120,000-130,000 deliveries in 2024 is more reasonable**. **Second, my rough estimate for ASP is RMB 270,000-280,000.** Reasons: (1) Lei Jun disclosed at Investor Day that the Max version accounts for 43% of orders, significantly boosting ASP. As of this morning, the SU7 Max has a delivery lead time of 34-37 weeks, the longest among the three versions. **Given that most of the first 5,000 Founder’s Edition deliveries were Max versions, the high proportion of Max orders is likely to continue**. **(2) Color and accessories also boost ASP.** Over 60% of SU7 orders include paid paint options (beyond the standard Gulf Blue, Elegant Gray, and Olive Green), adding RMB 7,000 to ASP. Wheel upgrades and IoT products (e.g., mechanical keyboards, phone mounts) further increase ASP. **Third, on gross margin, Lei Jun mentioned at Investor Day that the SU7’s gross margin is 5-10%.** This is a reasonable range given the intense industry competition. I believe gross margin will improve further as production scales up and BOM costs decline. **(2) Valuation Perspective:** Currently, institutions value Xiaomi using a sum-of-the-parts (SOTP) approach. For the car business, the mainstream method is price-to-sales (PS), as many EV startups are not yet profitable. **The market consensus is car valuation = \[3x current-year sales\] or \[1x 3-year-forward sales\].** Using the former, if Xiaomi delivers 120,000 SU7s in 2024 at an ASP of RMB 270,000, sales would be RMB 32.4 billion. A 3x PS implies a valuation of ~RMB 100 billion (or HKD 108 billion), between XPeng’s HKD 63 billion and Li Auto’s HKD 230 billion (intuitively reasonable). **Thus, the car business alone could contribute ~HKD 4 per share (based on 25 billion shares). If macro conditions (beta) remain stable, Xiaomi’s valuation could rise further**. Grain Factory Researcher Will May 8, 2024, Hong Kong Source: Grain Factory Researcher Will ### Related Stocks - [81810.HK](https://longbridge.com/en/quote/81810.HK.md) - [01810.HK](https://longbridge.com/en/quote/01810.HK.md) - [XIACY.US](https://longbridge.com/en/quote/XIACY.US.md) ## Comments (2) - **chung6603 · 2024-05-08T11:29:37.000Z**: Time will tell - **打虎专家 · 2024-05-08T03:16:58.000Z**: Another round of hype before earnings reports. If the data is true, the Q1 performance is quite good with relatively high gross margins. The IOT business basically counts as a Majorbeat.Just one word: steady