Goldman Sachs maintains a "Buy" rating on Xiaomi with a target price of 47.5 yuan

Goldman Sachs released its latest research report, maintaining a "Buy" rating on Xiaomi Group (1810.HK) and setting a target price of HKD 47.5. The firm believes that although the stock price may face resistance in the short term, its risk-reward profile remains attractive over a 12-month investment horizon.

Goldman Sachs has lowered its revenue and profit forecasts for Xiaomi for 2026 to 2027 by an average of 8% and 17%, respectively, primarily due to a downward adjustment in smartphone shipments caused by rising average prices, as well as a cautious adjustment of expectations for electric vehicle delivery volumes. Goldman Sachs predicts that the average selling price of Xiaomi smartphones will grow by 6% and 4% year-on-year in 2026 and 2027, respectively, while shipments are expected to decline by 5% in 2026 to 158 million units, and then grow by 2% in 2027 to reach 162 million units. The firm pointed out that in the context of rising memory costs, increasing the average selling price of smartphones has become Xiaomi's top operational priority for 2026.

In terms of electric vehicle business, Goldman Sachs expects delivery volumes to be around 670,000 units in 2026, higher than the company's original guidance of 550,000 units, mainly driven by the revamped SU7 model, enhanced marketing for the YU7, and the upcoming third SUV model. Despite a moderate overall industry backdrop, Xiaomi's strategy of increasing average selling prices through higher-end models is still expected to support improvements in profit structure.

The firm also updated its valuation range under optimistic and pessimistic scenarios, with a pessimistic scenario valuation of HKD 30 per share, implying about a 15% downside risk; under an optimistic scenario, it could reach HKD 55, corresponding to about a 56% upside potential. Compared to its adjusted net profit forecast of approximately RMB 42.2 billion for Xiaomi in 2025, the firm now expects Xiaomi's adjusted net profit for 2026 to moderately decline to RMB 39.7 billion