XIAOMI(01810) 华泰证券·2024-11-15 03:30Investment Rating - The report maintains a "Buy" rating for Xiaomi Group-W (1810 HK) with a target price of HKD 36.00 [4][9][12] Core Views - Xiaomi's stock price has risen 85% year-to-date, significantly outperforming the Hang Seng Tech Index by 67 percentage points [4] - The company's revenue is expected to grow 28% YoY in 3Q24, driven by its automotive and IoT businesses [4] - Xiaomi's SUV launch in 2025Q1 is anticipated to sustain rapid revenue growth, with Non-GAAP profit projected to increase by 55% in 2025 [4] - The new target price of HKD 36 includes an estimated valuation of HKD 8.7 per share for Xiaomi's automotive business [4][12] Smartphone/IoT/Internet Business - Xiaomi's smartphone shipments reached 42.8 million units in 3Q24, a 3.3% YoY increase, with a global market share of 13.5% [5] - Smartphone gross margin is expected to be 11.8% in 3Q24, pressured by rising raw material costs [5] - IoT revenue is projected to grow 20% YoY in 3Q24, with gross margin exceeding 20%, the highest since its IPO, driven by strong overseas and wearable product sales [5] - Internet business revenue is expected to grow 9.8% YoY in 3Q24, with gross margin remaining strong at 75% [5] Automotive Business - Xiaomi's automotive revenue is forecasted to exceed RMB 9 billion in 3Q24, a 42.8% QoQ increase [6] - Automotive shipments in 3Q24 are estimated to be close to 40,000 units, with gross margin improving to 17% [6] - The company's second-phase automotive factory is expected to be completed by June 2025, with total annual capacity potentially reaching 400,000 units [6] - Xiaomi's automotive business is projected to achieve breakeven in 2025, benefiting from economies of scale and reduced expense ratios [6] Financial Projections - Xiaomi's revenue for 2024E, 2025E, and 2026E is forecasted at RMB 348.2 billion, RMB 471.6 billion, and RMB 574.1 billion, respectively, representing YoY growth of 28.5%, 35.4%, and 21.8% [8] - Non-GAAP net profit for 2024E, 2025E, and 2026E is projected at RMB 24.7 billion, RMB 38.3 billion, and RMB 47.2 billion, respectively, with YoY growth of 27.9%, 55.4%, and 23.3% [8] - The company's PE ratio for 2025E is estimated at 16.69x, with a PB ratio of 3.03x [8] Valuation Methodology - The target price of HKD 36 is based on a SOTP valuation method, assuming a forward HKD/RMB exchange rate of 0.92 [12] - Xiaomi's existing businesses are valued at 17.3x 2025E PE, equivalent to HKD 27.3 per share, while the automotive business is valued at 2x 2025E PS, equivalent to HKD 8.7 per share [12][13] Industry Comparison - Xiaomi's 2025E PE ratio of 16.69x is lower than the industry average of 18.56x for comparable companies [14] - The company's automotive business valuation multiple of 2x 2025E PS is higher than the industry average of 0.86x, reflecting expectations of rapid growth and synergies with its smartphone business [14]