Financial Report Preview | Xiaomi Q1 Revenue Expected to Increase by 24%, Institutions Bullish on Smartphone and Automotive Businesses

Xiaomi is set to announce its first quarter financial report for 2024 on May 23. According to Bloomberg analysts:

• Xiaomi's Q1 revenue is expected to be 73.54 billion yuan, a year-on-year increase of 24%;
• Adjusted net profit is expected to be 5.13 billion yuan, a year-on-year increase of 13%;
• Earnings per share are estimated to be 0.17 yuan.

Recently, Xiaomi's stock price has outperformed the index as the index continues to rise, with a maximum increase of 70% since the low point in early February.

In the previous quarter, Xiaomi's total revenue was 73.2 billion yuan, a year-on-year increase of 10.9%; adjusted net profit was 4.9 billion yuan, a year-on-year increase of 236.1%.

Strong Growth Expected in Smartphone Shipments

Overall, multiple institutions have a positive view on Xiaomi's smartphone shipments and the growth potential of its automotive business.

According to Canalys' latest research, global smartphone shipments in the first quarter of 2024 are expected to increase by 11% year-on-year.

Among them:

• Samsung ranks first with 60 million units shipped;
• Apple ranks second with a 16% market share;
• Xiaomi ranks third, with shipments increasing by 33% to 40.7 million units, and market share growing by 3% to 14%.

CICC: Xiaomi's strong shipment growth in Q1 2024 is partly due to the low base formed by destocking in Q1 2023, and also benefits from the company's strong performance in emerging markets such as Africa, Latin America, and the Middle East. It is expected that the company's mobile business revenue in Q1 2024 will increase by 30.3% year-on-year to 45.6 billion yuan. In terms of gross profit margin, considering the rise in prices of storage and other components, it is expected that the gross profit margin of the mobile business in Q1 2024 will increase by 3.3 percentage points year-on-year and decrease by 1.9 percentage points quarter-on-quarter to 14.5%.

CITIC Securities: Benefiting from the recovery of core categories such as tablets, wearables, and major appliances, as well as the repair after the end of the overseas destocking cycle, it is expected that Xiaomi's AIoT revenue in Q1 2024 will be 20.2 billion yuan, with a gross profit margin reaching a historical high of 18%. Considering the strong growth in shipments and the trend of increasing the proportion of high-end smartphones, the bank expects the internet business revenue in Q1 2024 to be 8 billion yuan (up 14% year-on-year), with a gross profit margin remaining at a high level of 75%.

UBS: Xiaomi is expected to see a 25% year-on-year increase in revenue to 74.4 billion yuan in the first quarter, with non-IFRS net profit rising by 51% to 4.9 billion yuan. By business segment, the bank forecasts revenue growth of 31%, 21%, and 7% year-on-year for Xiaomi's smartphones, Internet of Things (IoT), and internet businesses, respectively. They believe that the profit from the IoT business may significantly exceed expectations, offsetting cost pressures from smartphone components, and expect the overall gross profit margin to increase by 2.3 percentage points year-on-year to 21.8%

Market Focus on Xiaomi's Car Delivery Pace

On May 15th, the delivery volume of Xiaomi SU7 exceeded 10,000 units within 43 days.

At the Beijing Auto Show, Lei Jun announced that Xiaomi plans to achieve a cumulative delivery volume of 100,000 units for Xiaomi SU7 by 2024. In addition, starting from June, the monthly delivery volume of Xiaomi SU7 is expected to exceed 10,000 units.

CICC stated that Xiaomi is pushing for a comprehensive increase in production capacity in the supply chain, with a minimum delivery target of 100,000 vehicles by 2024; supported by the supply chain, the company expects the gross profit margin of Xiaomi's car business to be 5-10%. Looking ahead, it is expected that Xiaomi's car delivery capacity and gross profit margin will continue to improve, optimistic about the growth space of the automotive sector under the "people-car-home full ecosystem" strategy.

JP Morgan pointed out that the key catalyst for Xiaomi's performance remains its electric vehicle business, and the sales volume and order momentum for the company in the coming quarters may remain strong. The bank also expects that Xiaomi's electric vehicle shipments in the 2024 fiscal year will exceed 100,000 units, and the company will introduce more electric vehicle models in the coming quarters to drive further development momentum in the 2025 fiscal year. Taking these factors into consideration, the bank has raised Xiaomi's H-share target price from HKD 21 to HKD 24, maintaining a "buy" rating