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On Monday, Jefferies increased its price target on Xiaomi (OTC:XIACF) Corp (1810:HK) (OTC: XIACY) shares to HK$69.50, up from the previous HK$63.25, while reiterating a Buy rating on the stock. Currently trading at $34.85, Xiaomi has shown remarkable momentum with a 12.43% gain in the past week. According to InvestingPro data, analysts maintain a strong buy consensus with price targets ranging from $44.72 to $47.83. The adjustment reflects a positive outlook on the company’s AIoT (Artificial Intelligence of Things) business, which is expected to contribute to a stronger-than-anticipated profit performance.
Analysts at Jefferies believe that Xiaomi’s capabilities in design, cost efficiency, and marketing will accelerate its market share expansion, particularly in the AIoT segment. The company has demonstrated strong execution with revenue growth of 35.04% over the last twelve months, reaching $50.1 billion. They predict that the company’s first-quarter 2025 results will surpass expectations, largely due to its AIoT products, and anticipate significant revenue potential from its appliances in the medium term, potentially adding over Rmb100 billion in revenue. InvestingPro subscribers can access 12 additional key insights about Xiaomi’s growth trajectory.
The revised price target is based on a 25 times projected 2026 earnings multiple for Xiaomi’s smartphone and AIoT businesses, an increase from the previous 22 times earnings multiple. The analysts estimate that approximately 74,000 units of Xiaomi’s SU7 model were sold in the first quarter of 2025, marking a 9% quarter-over-quarter increase, with a relatively stable average selling price (ASP).
The margin for the first quarter is forecasted to have risen modestly to around 21%, thanks to an improved mix of product specifications. Additionally, the net loss is expected to have narrowed to approximately Rmb500 million. Jefferies suggests that concerns surrounding the SU7 accident are likely to diminish, regardless of an official government report, and the market’s attention will shift to the anticipated launch of the YU7 model, which is still expected to occur in June or July 2025.
In other recent news, Xiaomi Corporation has been the subject of significant updates from multiple rating agencies and analysts. Moody’s has affirmed Xiaomi’s Baa2 rating while upgrading its outlook to positive, citing the company’s strong business profile, including its smart electric vehicle (EV) ventures and leadership in the smartphone market. Fitch Ratings also improved Xiaomi’s outlook to positive, maintaining its ’BBB’ rating, highlighting the company’s robust free cash flow and expanding market share in IoT and smartphones. S&P Global Ratings upgraded Xiaomi’s rating from ’BBB-’ to ’BBB’, pointing to strong performance in consumer electronics and promising initial results in the EV sector.
Jefferies initiated coverage on Xiaomi with a Buy rating, setting a price target of HK$63.25, emphasizing the company’s integrated ecosystem strategy and potential in the EV market. The research firm believes Xiaomi’s automotive segment could become a major revenue and profit driver by 2028. Additionally, Xiaomi’s forthcoming flagship smartphone, the Xiaomi 16 Pro, is expected to feature a 3D printed metal mid-frame, showcasing advancements in manufacturing technology. These developments highlight Xiaomi’s strategic direction and potential growth across various sectors, including consumer electronics, IoT, and electric vehicles.
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