Goldman Sachs: Xiaomi Corporation-W enters a period of rich catalysts and potential turning point opportunities in the third quarter, reiterating a "Buy" rating
Goldman Sachs released a research report, maintaining a "Buy" rating for Xiaomi Corporation with a target price of HKD 40. The firm believes that Xiaomi's valuation has bottomed out, and the third quarter will usher in a period rich in catalysts and potential turning points. The focus is on the progress of smart electric vehicles and AI, with expectations that new models will be competitive and AI monetization strategies gradually taking shape. Excluding new businesses, revenue growth is expected to return to positive growth in the third quarter, with non-IFRS net profit likely to improve quarter-on-quarter in the third and fourth quarters
According to the Zhitong Finance APP, Goldman Sachs released a research report stating that as Xiaomi Corporation-W (01810) enters a period rich in catalysts over the next few months, the progress of Smart Electric Vehicles (Smart EV) and Artificial Intelligence (AI) will become the core focus for investors. The firm believes that the third quarter is expected to bring potential turning points both in market sentiment and financial aspects. Goldman Sachs maintains a "Buy" rating on Xiaomi, with a 12-month target price for Hong Kong stocks remaining at HKD 40.
The firm pointed out that Xiaomi's current valuation has basically bottomed out. In the Smart Electric Vehicle sector, while the market is waiting for detailed specifications of the third model series (a range-extended large SUV possibly named "SKYNOMAD") expected to be disclosed in the Ministry of Industry and Information Technology's filing documents as early as mid-July, the firm anticipates that the new series will be positioned as an all-terrain travel SUV with a competitive entry price (starting from RMB 200,000), and maintains its forecast of delivering 110,000 and 240,000 units of this new series in 2026 and 2027, respectively. In addition, Xiaomi's AI monetization strategy is gradually taking shape, mainly covering consumer-facing system-level AI assistants, enterprise-oriented coding and productivity tools, as well as the Internet of Things (AIoT) ecosystem and smart driving in the physical world.
Goldman Sachs expects that Xiaomi's revenue growth, excluding new businesses, will resume year-on-year positive growth starting from the third quarter, and that the Non-International Financial Reporting Standards (Non-IFRS) net profit for the third and fourth quarters will also see quarter-on-quarter improvement
