CICC: Maintains "Outperform" rating on Xiaomi Group-W (01810) and raises target price to HK$76.9

According to Zhitong Finance APP, CICC released a research report stating that...XiaomiGroup-W (01810) held a launch event for the Xiaomi Human, Vehicle and Home Ecosystem, releasing the Xiaomi YU7, Xiaomi AI glasses and several new IoT products. Considering that the large pre-orders for the Xiaomi YU7 exceeded expectations, we have raised our adjusted net profit forecasts for 2025/2026 by 2% and 17% respectively to RMB 49.048 billion and RMB 66.384 billion respectively. The current share price corresponds to a P/E of 28.0/20.4 times adjusted net profit for 2025/2026. We maintain our "Outperform" rating for the industry. Taking into account the adjustment of earnings forecasts and the upward shift in the industry valuation center, we have raised our target price by 9.9% to HK$76.9 (based on the SOTP valuation method), corresponding to an adjusted net profit P/E of 37.8/27.5 times in 2025/2026, representing an upside potential of 35.1%.

CICC's main points are as follows:

The Xiaomi YU7 saw pre-orders exceed 289,000 units within one hour of its release, with its strong product competitiveness helping the new car break through the market.

Xiaomi has released three models: the YU7 Standard Edition, Pro Edition, and Max Edition, with a starting price of 253,500 yuan. In terms of performance, the YU7 uses the Xiaomi Super Motor V6s Plus, achieving a 0-100 km/h acceleration time of 3.23 seconds; In terms of battery life, the entire Xiaomi YU7 series features long battery life and 800V silicon carbide high-voltage platform fast charging; In terms of intelligence, the Xiaomi YU7 comes standard with a full set of high-specification driver assistance hardware (including...).NVIDIAXiaomi's end-to-end driver assistance system features a Thor chip, LiDAR, 4D millimeter-wave radar, 11 high-definition cameras, and 12 ultrasonic radars, along with a 10 million Clips version. According to official data from Xiaomi Auto, the YU7 received over 289,000 pre-orders within one hour of its release. The bank believes that the large-scale pre-orders for the Xiaomi YU7 exceeded expectations, reflecting consumers' recognition of Xiaomi's high-performance, cost-effective product strength. Coupled with the brand's momentum, it demonstrated strong product strength and a breakout effect, achieving the effect of supply creating new demand.

Xiaomi releases its first AI glasses, exploring new devices in the era of AI on the edge.

Xiaomi's first AI glasses have achieved breakthroughs in "lightweighting, high performance, and long battery life": 1) In terms of weight, the frame weighs as little as 40g, which is lower than the weight of mainstream AI glasses; 2) In terms of performance, it is equipped with a 12-megapixel ultra-transparent optical lens, an f/2.2 large aperture, and a 105-degree ultra-wide angle; In addition, the glasses feature a built-in "Super Little Love" feature, giving the product strong multimodal intelligent interaction capabilities; 3) In terms of battery life, compared to...GoalSimilar products saw an increase of 64%.

The "people, vehicles, and home ecosystem" strategy is progressing steadily, and we are optimistic that new product launches will drive the brand's momentum to continue to rise.

The bank believes that the larger-than-expected orders for the Xiaomi YU7 and the launch of new products such as the first AI glasses are expected to continue to boost the brand's momentum. Looking ahead, the bank is optimistic about Xiaomi's four core strategies of "scale ecosystem + technology hardening + brand premiumization + market globalization". In the future, with the continuous integration and optimization of the "human, vehicle and home ecosystem" at the user level and underlying systems, its important entry position in multiple edge hardware fields such as mobile phones, automobiles, IoT, AI glasses and robots may be further highlighted.

Risk Warning:The global macroeconomy has impacted demand for smartphones and IoT products, resulting in lower-than-expected sales of smart cars.