CICC expects Xiaomi’s Q2 profit to surge 111% on year, raised target price to HK$15.8
COMPANY NEWS STOCKS VIEWS & ANALYSIS
CICC expects Xiaomi’s Q2 profit to surge 111% on year, raised target price to HK$15.8
COMPANY NEWS STOCKS VIEWS & ANALYSIS

CICC expects Xiaomi’s Q2 profit to surge 111% on year, raised target price to HK$15.8

 

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Chinese smartphone giant Xiaomi’s adjusted net profit is expected to surge by 111.1% year over year to 4.393 billion yuan in the second quarter of the year, said CICC in a note.

Xiaomi’s global smartphone shipments are expected to drop by 16% to 33.2 million units in the quarter, narrowing from the 22% drop in the previous quarter, as de-stocking has been basically completed, and the average price of smartphones is expected to increase slightly year on year and drop slightly from the previous quarter, the broker said. 

CICC expected Xiaomi’s smartphone revenue to decline 14.1% year over year to 36.3 billion yuan in the quarter. Considering the price cuts of storage and other components upstream, smartphone gross margin will likely reach 12.1%, increasing by 3.4 percentage points from a year earlier and by 0.9 percentage points from the prior quarter, it estimated.

Xiaomi’s IoT business revenue is estimated to grow by 5% year over year to 20.802 billion yuan, mainly due to the peak selling season for major appliances such as air-conditioners, while IoT gross profit margin is expected to increase by 0.2 percentage points from a year ago to 16%, it said.

CICC expected Xiaomi’s gross profit margin to increase by 3.5 percentage points to 20.3% in the second quarter. The broker raised the forecast for Xiaomi’s 2023 and 24 adjusted net profit by 19.5% and 14.2% to 10.907 billion yuan and 13.131 billion yuan, respectively.

CICC raised the target price for Xiaomi to HK$15.8, with an Outperforming rating. Xiaomi’s shares gained 1.33% to close at HK$12.22 in Hong Kong on Friday.