20230214-招银国际-小米集团-W-01810.HK-2023_Investor_Day__All_eyes_on_profitability_and_smart_EV_business_upside_5页_979kb

Xiaomi (1810 HK) 2023 Investor Day Summary

Core Content

Xiaomi's 2023 Investor Day provided insights into the company's strategic direction, financial performance, and future outlook. The key focus areas were maintaining profitability, accelerating the smart EV business, and leveraging AIoT and overseas markets for growth. The report also included a valuation analysis and investment ratings.

Main Points

Strategic Focus

• Smartphone Business: Xiaomi aims to maintain smartphone shipments at FY22 levels, with potential for share gain in emerging markets. Profitability is a key priority, especially in India due to policy headwinds.
• Smart EV Business: Expected to ramp up in 1H24E with increased R&D spending of RMB 7.5-8.0bn in FY23E, up from RMB 3.0bn in FY22. The "Smartphone + AIoT + EV" strategy is seen as a competitive advantage.
• AIoT Expansion: Overseas expansion remains a major growth driver with more innovative product SKUs.
• Internet Revenue: Reached a new milestone, with expectations of gaming recovery due to policy relaxation and macroeconomic factors.

Earnings Outlook

• The worst of Xiaomi's earnings decline is likely over.
• Earnings recovery is expected in 1H23E, driven by China's reopening and healthy inventory levels in China and India.
• The company is expected to benefit from its EV business upside.

Investment Recommendation

• Maintain BUY with a target price of HK$14.73, representing a 12.6% upside from the current price of HK$13.08.
• Valuation is based on a 24x FY23E P/E, with the current P/E at 21.5x, close to 1-sd below the 3-year average of 15.9x.

Key Financial Highlights (FY23E)

Valuation Comparison

Shareholding and Performance

Shareholding Structure

• Lin Bin: 8.6%
• Smart Mobile Holdings Ltd: 8.6%

Share Performance (12M)

Stock Data

• Market Cap (HK$ mn): 266,073.4
• Avg 3 mths t/o (HK$ mn): 11.4
• 52w High/Low (HK$): 16.60 / 8.45
• Total Issued Shares (mn): 20,342.0

Analyst Certification and Ratings

• CMBIG Ratings:

  • BUY: Potential return of over 15% over next 12 months.
  • HOLD: Potential return of +15% to -10%.
  • SELL: Potential loss of over 10%.
  • NOT RATED: No rating provided.

• Industry Ratings:

  • OUTPERFORM: Expected to outperform the relevant broad market benchmark.
  • MARKET-PERFORM: Expected to perform in-line with the benchmark.
  • UNDERPERFORM: Expected to underperform the benchmark.

Important Disclosures

• The report is for informational purposes only and not tailored to individual investors.
• Past performance does not guarantee future results.
• CMBIGM is not liable for any losses or damages arising from reliance on the report.
• The report is not an offer or solicitation to buy/sell securities.
• The report may not be distributed to persons outside the defined categories without prior consent.