UOB Kay Hian Expects XIAOMI-W 1Q Adj. NP to Grow 5% YoY to RMB3B

UOB Kay Hian stated in a report that $XIAOMI-W(01810.HK)$ is expected to report a 24% decline in smartphone shipments in the first quarter, but forecasted its adjusted net profit to grow 5% YoY to RMB3 billion, as margins in its smartphone and Internet of Things businesses are expected to benefit from lower material costs. Its Internet services business should remain stable amid a slow recovery in advertising spending.

UOB Kay Hian maintained XIAOMI's Hold rating and target price of $11.1. The broker also forecasted the group's revenue to drop 20.5% YoY and 11.7% QoQ to RMB58.3 billion in the first quarter, while consolidated gross margin is predicted to increase 2.2 percentage points YoY to 19.5%. Operating profit margin is expected to reach 3.5%, up from 2.2% in 2022, due to tighter control of operating expenses. In addition, the broker expected the Group's smartphone business margin to recover to 11% in the first quarter.

$UOB Kay Hian(U10.SG)$ $Xiaomi Corp. Unsponsored ADR Class B(XIACY.US)$ $Xiaomi Corp.(XIACF.US)$ $KraneShares CSI China Internet ETF(KWEB.US)$ $NASDAQ Golden Dragon China(.HXC.US)$ $Hang Seng H-Share Index ETF(02828.HK)$ $Hang Seng Index(800000.HK)$

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