20231103-招银国际-小米集团-W-01810.HK-3Q23E_preview__Resilient_smartphone_sales_with_margin_expansion__maintain_BUY_8页_1mb

Xiaomi (1810 HK) 3Q23E Preview Summary

• Maintain BUY Rating: Analyst reiterates a BUY recommendation with a 26% upside to the target price of HK$18.93. Key drivers include improved smartphone margins, strong earnings recovery, and upcoming EV product launches.

• Smartphone Segment: Resilient sales with a 2% YoY shipment increase in 3Q23 (YoY -1% industry) and a 14% market share. Adj. net profit climbed 112% YoY to RMB4.49bn due to improving gross profit margin (GPM at 13.6%) from better operating leverage and lower BOM costs. Future outlook includes support from the Xiaomi 14 launch and Double 11 events; shipments rebounded 8% YoY in FY24E to 155mn units.

• AIoT/Internet Segment: Modest growth with a recovery in advertising services; estimated revenue increase of 4-5% YoY in 3Q23E. Overall FY23-25E adj. EPS is 10-14% higher than consensus due to margin improvements across segments.

• Valuation: New target price of HK$18.93 is based on a 24x FY24E P/E, offering 25.5% upside. Catalysts include EV progress, smartphone market share gains, and internet revenue recovery.

• Financial Highlights: 3Q23E revenue estimated -1% YoY but adj. net profit up 112% YoY; earnings outlook improved with GPM strengthening. Shares traded at HK$15.08, up 22.2% year-month, outperforming the market.

• Earnings Revision: Raised FY23-25E EPS by 10-14%, with smartphone shipments declining slightly in FY23E but rebounding in subsequent years. Revenue growth is projected at -4% in FY23E and 13% in FY24E.

Analyst Certification and Disclaimers

• Analyst certifies views reflect personal opinion and no compensation tied to recommendations.
• Disclosures: Report contains risks; past performance not indicative of future results; CMBIGM not liable for reliance on content.