CICC: Maintain the "Outperform" Rating of Xiaomi Group-W (01810) and Upgrade the Target Price to HK$76.9

Zhitong Finance APP was informed that CICC released a research report saying,MilletGroup-W (01810) held a full ecosystem launch conference for Xiaomi People, Cars and Homes, and released Xiaomi YU7, Xiaomi AI glasses and a number of new IoT products. Considering that Xiaomi YU7 has exceeded expectations, the adjusted net profit for 2025/2026 will be raised by 2%/17% to 49.048 billion yuan/66.384 billion yuan. The current share price corresponds to the 2025/2026 adjusted net income P/E of 28.0/20.4 times. Maintain the outperform industry rating, take into account the profit forecast adjustment and the upward shift of the industry valuation center, and raise the target price by 9.9% to HK$76.9 (based on SOTP valuation method), corresponding to the adjusted net profit P/E of 37.8/27.5 times in 2025/2026, with an upside of 35.1%.

The main views of CICC are as follows:

Xiaomi YU7 exceeded 289,000 units in 1 hour of launch, and its high product strength helped the new car break the circle

This time, Xiaomi released three models: YU7 standard version, Pro version and Max version, with a starting price of 253,500 yuan. In terms of performance, YU7 uses Xiaomi super motor V6s Plus, which can accelerate from zero to hundred in 3.23 seconds; In terms of battery life, Xiaomi YU7 is a long battery life with 800V silicon carbide high-voltage platform for fast charging; In terms of intelligence, all Xiaomi YU7 series come standard with a full set of high-specification assisted driving hardware (includingNVIDIAThor chip/lidar/4D millimeter wave radar/11 HD cameras/12 ultrasonic radars) and 10 million Clips version of Xiaomi end-to-end assisted driving. According to the official data of Xiaomi Auto, YU7 exceeded 289,000 units in one hour after its release. The bank believes that Xiaomi YU7 has exceeded expectations, reflecting consumers' recognition of Xiaomi's higher cost-effective product strength, and the superimposed brand potential energy shows strong product strength and circle-breaking effect, realizing the effect of creating new demand by supply.

Xiaomi releases its first AI glasses to explore new terminals in the end-side AI era

Xiaomi's first AI glasses have achieved a breakthrough of "lightweight, high performance and long battery life": 1) In terms of weight, the frame weight is as light as 40g, which is lower than the weight of mainstream AI glasses; 2) In terms of performance, with a 12-megapixel ultra-transparent optical lens, f/2.2 large aperture and 105-degree ultra-wide angle; In addition, the glasses have built-in "super little love", which gives the products strong multi-modal intelligent interaction ability; 3) In terms of battery life, the battery capacity is compared withMetaComparable products increased by 64%.

The strategy of "full ecology for people, vehicles and homes" has been steadily advanced, and we are optimistic that the brand potential will continue to improve due to the launch of new products

The bank believes that the number of Xiaomi YU7 exceeds expectations, and the release of new products such as the first AI glasses is expected to continue to boost the brand potential. Looking forward to the future, the bank is optimistic that Xiaomi will adhere to the four core strategies of "scale ecology + technology hardcore + brand high-end + market globalization". In the future, with the continuous opening and optimization of "the whole ecology of people, cars and homes" at the user level and the underlying system, its important entrance position in many end-side hardware fields such as mobile phones, automobiles, IoT, AI glasses and robots will be further highlighted.

Risk warning:The global macro economy affected the demand for smartphones and IoT products, and the sales volume of smart cars was lower than expected.