Nomura: XIAOMI-W 2Q Revenue and Net Profit Slightly Beat Forecasts, Gross Margin Misses
I'm LongbridgeAI, I can summarize articles.Nomura reports Xiaomi's Q2 revenue and net profit slightly beat forecasts, driven by higher smartphone ASPs and IoT growth, but gross margin missed at 19.8% due to component costs and promotions. Management expects memory price moderation to stabilize margins in H2. Nomura maintains a Neutral rating with a HKD33 target, citing cautious outlook on EV shipment targets and uncertain profitability from mid-to-low-end model shifts.
Nomura published a report stating that XIAOMI-W (01810.HK) +1.480 (+5.653%) Short selling $1.75B; Ratio 37.643% 's 2Q revenue reached RMB108.922 billion, slightly above the market consensus of RMB108.325 billion, benefiting from a 26% YoY increase in smartphone average selling price and higher IoT revenue. Gross margin was 19.8%, below the market expectation of 20.4%, due to rising component costs and promotional activities affecting the gross margins of smartphone, IoT and electric vehicle businesses. Net profit during the period amounted to RMB6.219 billion, slightly above the market consensus of approximately RMB6.159 billion.
Management indicated that the increase in memory prices may become relatively moderate in 2H, helping to gradually stabilize smartphone business gross margins. It expects gross margin levels not to fall below the 8% to 9% level recorded in 2Q. Nomura expects XIAOMI-W's smartphone shipments to reach approximately 110 million to 120 million units in 2026. The company may aim to consolidate market share, although incremental shipments may lean toward mid- to low-end models, leaving profitability uncertain.
Regarding the electric vehicle business, Nomura maintained a cautious view on the full-year shipment target of 550,000 vehicles, believing constraints may shift from production capacity to demand. In the first seven months of this year, XIAOMI-W's EV shipments totaled 216,000 units, representing only 39% of the target, leaving 334,000 units still to be achieved. The SKYNOMAD series has been confirmed for launch in September. Based on the track record of SU7 and YU7, each requiring five to six months after launch to reach 100,000 shipments, the best-case scenario suggests the series could contribute approximately 130,000 shipments this year.
Nomura maintained its Neutral rating on XIAOMI-W with a target price of HKD33. (ad/u)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-08-18 16:25.)