Rating Quick Look | SU7 outlook exceeds expectations, Xiaomi's target price raised! Apple, Baidu face price cuts

Citigroup: Maintains a "Buy" rating on Xiaomi Group-W, with a target price raised from HKD 19.6 to HKD 21.9

Due to better-than-expected prospects in the electric vehicle business, Xiaomi's adjusted earnings per share forecasts for 2024 to 2026 have been raised by 25%, 37%, and 32% respectively. The expected electric vehicle shipments during the same period have been raised to 100,000 units, 200,000 units, and 280,000 units, with gross margin forecasts raised to 6%, 9%, and 12% respectively.

Citigroup pointed out that key takeaways from Xiaomi Investor Day include setting this year's sales target for SU7 at 100,000 units, with a gross margin target of 5% to 10%; current locked orders exceeding 70,000 units. The breakeven point is between 300,000 to 400,000 units per year. The decline in gross profit margin for smartphones this year may be within a controllable range.

Nomura: Xiaomi SU7 orders continue to increase, target price at HKD 17, rated "Neutral"

The report states that Xiaomi Group Chairman Lei Jun provided the latest information on the SU7 car at Investor Day, believing that the progress of electric vehicles continues to exceed the bank's and market expectations. Since mid-March, 70,000 orders have been locked in, with orders still growing, and the high-end model SU7Max accounting for 43% of total orders, supporting average selling price performance.

The delivery target for this year is 100,000 units, reflecting that the factory will operate at a relatively tight utilization rate. With an estimated increase in shipment volume in the automotive business, the gross margin is expected to be 5% to 10%. When the annual shipment volume reaches 300,000 to 400,000 units, operational breakeven can be achieved.

Daiwa: Maintains a "Hold" rating on Bilibili, with a target price raised from HKD 78.9 to HKD 93.4

The bank slightly raised its forecast for Bilibili's advertising business this year, believing that the category of Artificial Intelligence Generated Content (AIGC) has further potential for growth, and more advertising inventory will be added this year. The gaming business remains weak in the first half of the year, but a turnaround may occur at the end of the second quarter or the beginning of the third quarter.

Daiwa pointed out that the end of the second quarter will be a strategic time window for its reevaluation based on Bilibili's progress towards breakeven, advertising monetization, and performance of new games. Due to the increase in advertising revenue, Daiwa has raised its revenue forecast for Bilibili for the next two years by 2% each, and profit forecast by 4 to 5%, as the high-profit advertising contribution is expected to continue to increase.

HSBC: Maintains a "Hold" rating on Bilibili, with a target price lowered to HKD 88.14

The research report indicates that Bilibili's breakeven target remains unchanged, with the primary task being to achieve it in the third quarter of this year. Improving the gross margin will be crucial, and it is expected that a new measure to reduce rewards for mid-to-high-level content creators in the video innovation plan starting from April this year will help improve the gross margin.

HSBC Research is optimistic about Bilibili's advertising business through vertical industry expansion, increasing ad load and revenue per thousand impressions, with development on the right track. The revenue forecast for this year is expected to remain basically unchanged, but the increase in operating costs has led to an 8% downward revision in profit expectations.

HSBC: Maintains a "Buy" rating on Baidu, with an H-share target price lowered from HKD 153.1 to HKD 141.3

The research report states that Baidu's AI large language model Wenxin Yiyuan has exceeded 200 million users after 13 months of release, and the enterprise customers served by Baidu's Smart Cloud Qianfan large model platform have reached 85,000. The daily usage of Wenxin Yiyuan API has reached 200 million times, triple the usage from the fourth quarter of last year, and the inference cost of large models has significantly decreased to 1% of the March version last year HSBC Research currently predicts that Baidu's first-quarter revenue in 2024 will increase by 11%. After adjusting for the expected reduction in advertising revenue, the forecasted operating profit margin under adjusted core non-GAAP accounting standards has decreased to 21%. Overall, HSBC Research has also lowered Baidu's profit forecast for the fiscal years 2024 to 2026 by 6% to 8%.

Morgan Stanley: Maintains Apple's "Overweight" rating, with a target price lowered from $220 to $210

The firm expects Apple's revenue and earnings per share performance for the fiscal quarter ending in March of this year to outperform expectations, benefiting from stable product demand and outperformance in the service business. It is expected that the revenue for the quarter will reach $91 billion, with an estimated earnings per share of $1.51.

However, the firm anticipates that the company's revenue guidance for the third fiscal quarter ending in June of this year will be close to the firm's expected $80 billion, with an estimated earnings per share guidance of $1.22, which is 4% to 7% lower than market expectations.

Jefferies: Lowers IBM's target price from $215 to $210, maintains a "Hold" rating

Citigroup: Resumes coverage of Lucid Group with a "Neutral" rating and a target price of $2.9