Jinwu Financial News | According to CMB International, the bank participated in the 2024 Xiaomi Investor Day event hosted by Xiaomi Group (01810) in Beijing. The main summary points include: 1) The Xiaomi SU7 will deliver 100,000 vehicles for the whole year of 2024, and the delivery target will reach 10,000 vehicles in June. 2) The annual gross margin target for the Xiaomi SU7 NEV is 5-10%, which is better than the market's original expectations, mainly due to impressive sales momentum. 3) The Xiaomi car business is expected to reach break-even after the annual sales volume reaches 30-400,000 vehicles. 4) The first batch of NOAs for Xiaomi cars will open in May and will be rolled out in major cities across the country in August. 5) By the end of 2024, Xiaomi Auto's national sales outlets had expanded to 219 in 46 cities, and service centers had expanded to 139 in 82 cities. 6) The Xiaomi smart driving team will expand from the current 1,000 people to 1,500 by the end of this year, and is expected to reach a team size of 2,000 people next year. 7) During the event, the Xiaomi Group clarified the Group's financial targets for 2024. The main business revenue exceeded 300 billion yuan, and the main business expenses rate remained the same. The Group's annual R&D expenses were about 24 billion yuan, and mobile phone shipments increased by 15 to 20 million units over the same period last year.
The bank believes that the Xiaomi management's presentation on the progress of the Xiaomi SU7 NEV business and the outlook for the whole year is very positive. Currently, there are more than 70,000 new energy vehicles in the Xiaomi SU7 series, and the high-end model Xiaomi SU7Max accounts for 43.16% of the current target orders, which helps to push up the average unit price level. Xiaomi management said that in the next three years, Xiaomi cars will focus on the domestic market and make breakthrough progress in delivery capacity, intelligent driving team building, and sales outlets and service center construction before the end of this year.
Overall, market investors have a positive view on the progress and delivery of Xiaomi's automobile business and gross margin outlook. The recent pace of Xiaomi car deliveries and the first batch of consumer feedback will all be factors affecting the stock price. The bank is also optimistic that Xiaomi cars will be based on a unique “human car owner” intelligent ecosystem and will open up a differentiated competitive advantage with friend products. The buy rating is maintained, and the target price is HK$22.19.