【行业研究报告】小米集团-W-Raise TP and estimates on 4Q23 beat; All eyes on EV official launch on 28 March

20Mar202420Mar2024CMBInternationalGlobalMarkets|EquityResearch|CompanyUpdateXiaomi(1810HK)RaiseTPandestimateson4Q23beat;AlleyesonEVofficiallaunchon28MarchXiaomi’s4Q23revenue/netprofitof11%/236%YoYgrowthbeatour/consensusestimates,drivenbystrongermargins,improvingmixandinvestmentgains.Lookingahead,mgmt.ispositiveonsmartphonerecovery,premiumizationstrategyandEVbusinessexpansion.WebelieveXiaomi’sglobalsmartphonesharegain,AIoToverseassalesandinternetrevenueimprovementwillcontinuetodrivegrowthintoFY24E-25E.WearealsopositiveonXiaomi’supcomingEVlauncheventon28March.WethinkXiaomi’spricingstrategyofitsSU7EVandinitialmarketfeedbackwillbethenear-termcatalystforshareprice.OurnewTPofHK$20.25isbasedonthesame24xFY24EP/E.MaintainBUY.CatalystsincludeEVproductlaunchandsmartphonemarketsharegain.4Q23beatonbettermarginsandimprovingmix.Xiaomi’s4Q23globalsmartphoneshipmentincreased23.9%YoYandASPdropped2.6%YoYduetoincreasingmixoflower-ASPmodelinemergingmarkets,partiallyoffsetbyChinaASPincrease.Bysegment,smartphone/internetrevenueincreased20.6%/9.9%YoY,boostedbystrongshipment,largeglobaluserbaseandbetteradvertisingrevenue.AIoTrevenuedroppedby5.1%YoYduetoweakerTV/NBsales.BlendedGPMcameinat21.3%,in-linewithour/consensusestimates,despitelowerSP/AIoTGPMgivenhigherBOMcostandchangeinproductmix.2024Eoutlook:AlleyesonEVsalesandinitialmarketfeedback;globalsmartphonesharegainandAIoTexpansiontocontinue.Xiaomi’supcomingEVlauncheventisscheduledon28March,andEVmodelswillbeavailableforsalesin59Xiaomistoresin29citiesimmediatelyaftertheevent.Mgmt.ispositiveonXiaomi’ssmartphoneglobalmarketsharegainespeciallyintheMiddleEast,AfricaandLatinAmerica,andanticipatedfastershipmentimprovementforFY24E.Overall,weexpectXiaomi’srevenue/adj.netincometodeliver+12%/2%YoYincreaseforFY24E.EVofficiallaunchasnear-termcatalyst;MaintainBUY.WethinkthatXiaomi’sEVpricingstrategyandmarketresponsewillbenear-termsharepricecatalysts.Weslightlyadjustedourestimates,andournewTPofHK$20.25isbasedonsame24xFY24EP/E.MaintainBUY.UpcomingcatalystsincludeEVproductlauncheventandglobalsmartphonesharegain.TargetPriceHK$20.25(PreviousTPHK$19.54)Up/Downside36.3%CurrentPriceHK$14.86ChinaTechnologyAlexNG(852)39000881alexng@cmbi.com.hkClaudiaLIUclaudialiu@cmbi.com.hkStockDataMktCap(HK$mn)302,282.1Avg3mthst/o(HK$mn)1,218.452wHigh/Low(HK$)16.80/9.99TotalIssuedShares(mn)20342.0Source:FactSetShareholdingStructureLinBin8.6%SmartMobileHoldingsLtd8.6%Source:HKExSharePerformanceAbsoluteRelative1-mth15.0%12.4%3-mth-7.9%-8.1%6-mth24.5%35.5%Source:FactSet12-mthPricePerformanceSource:FactSetEarningsSummary(YE31Dec)FY21AFY22AFY23AFY24EFY25ERevenue(RMBmn)328,309280,044270,970303,895332,166YoYgrowth(%)33.5(14.7)(3.2)12.29.3Adjustednetprofit(RMBmn)22,039.58,518.019,272.819,738.421,135.6YoYgrowth(%)69.5(61.4)126.32.47.1EPS(Adjusted)(RMB)0.880.340.770.790.85ConsensusEPS(RMB)N/AN/AN/A0.640.69P/E(x)26.830.717.717.216.1P/B(x)3.81.82.11.91.7Yield(%)0.00.00.00.00.0ROE(%)14.81.811.39.09.0Netgearing(%)96.070.976.979.963.9Source:Companydata,Bloomberg,CMBIGMestimates