Xiaomi 1810

[winston]

not vested

Xiaomi Corp (1810 HK): <Earning First Take> FY21 net profit decrease c. 5% y-o-y, slightly falls behind the market consensus [BUY, TP HK$23.70]

FY21 profit decreased c.5% y-o-y to Rmb 19.3bn, missing market consensus by 9%

The unsatisfactory performance was mainly due to increasing promotion expense and impairment loss in equity investment

Margin expansion in Internet service continued

Promotion cost to sales expected to decrease after the resumption of global smartphone shipment growth later in 2022

Source: DBS

[winston]

not vested

XIAOMI: Handset Shipment May Excel 200M Units This Yr

The supply situation of XIAOMI-W (01810.HK) in 1Q22 is the least optimistic in wake of lingering uncertainties and risks in geopolitics, but the situation is likely to improve in 2Q22, revealed XIAOMI-W President Wang Xiang.

The company is forecast to ship more than 200 million handsets this year.

Looking ahead, XIAOMI-W still has a lot of room for growth in overseas markets, including European, Latin American and Asia-Pacific markets, with enormous potential.

Source: AAStocks Financial News

[winston]

not vested

XIAOMI CORP (1810 HK)
Recommendation : HOLD
Fair Value : HKD 15.37

OPERATING IN A CHALLENGING ENVIRONMENT.

Results beat; weaker smartphone GPM in 4Q21
Headwinds from both the supply and demand sides of the equation
Fair value of HKD15.37

Xiaomi’s 4Q21 results came in above expectations.

Smartphone revenue increased 18% year-on-year (YoY) to RMB 50.5b due mainly to average selling price (ASP) increase, while shipments made a smaller contribution.

The segment gross profit margin (GPM) was somewhat weak due mainly to a higher China mix and various promotional events during the quarter.

All considered, adjusted net profit grew 40% YoY to RMB4.5b, or 7% above consensus.

We understand that supply chain challenges are still persistent in 1Q22, but this is expected to gradually improve in 2Q22, and more meaningfully in 2H22, particularly for chipsets.

We note that domestic offline channel expansion has reached over 10k stores, translating into a 6-7% market share, while the group still enjoys a 34% online market share in mainland China in 2021.

We note that Xiaomi will be looking to improve store operating efficiency this year.

Internet GPM was robust at 76.1%, which we attribute to higher ad mix led by Xiaomi’s strategic resource allocation to more high-end smartphone models amidst the shortages in components.

As shortages are expected to gradually ease, margins could normalize in 2H22.

We are also cognizant that pressures still exist in the gaming industry given the pause in new-game approvals in China.

We adopt more conservative assumptions following challenges both from the supply and demand sides of the equation, as well as lack of clarity over the growth of internet ads in China.

All considered, our fair value (FV) moves down from HKD21.29 to HKD15.37, which also incorporate our ESG discount of 5%.

Source: OCBC

[winston]

not vested

Xiaomi Corp (1810 HK): 44% profit growth expected in FY22 [BUY, TP HK$22.60]

4Q21 net profit was Rmb 2.5bn, down 71.8 % y-o-y, comparing the market expectation of a 51.9% decline

4Q21 gross margin increased by 1ppt y-o-y to 17.1 on margin expansion of Internet service and IoT

Expected FY22F earnings to grow strongly by 44.7% on the smartphone revenue growth, absence of one-off loss

Maintain BUY, HK$22.6 TP on a margin expansion and EPS CAGR of 30% in FY21-24F

Source: DBS

[winston]

not vested

Stable smartphone shipment growth in FY22

4Q21 adjusted net profit grew 40% yoy.

FY21 adjusted net profit jumped 70% yoy and formed 103% of our forecast due to strong Internet services margin.

We expect smartphone shipments to grow 24%/18% yoy in FY22F/23F.

Reiterate Add, with a higher TP of HK$27.50, based on 20x FY23F P/E.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... E577740F7E

[winston]

Smartphone shipment to stay solid in FY22F

Xiaomi is confident to achieve 10%+ smartphone shipment growth in FY22F,
driven by Southeast Asia, the EU and LATAM markets, premium segment.

Internet services to achieve 20%+ yoy revenue growth and maintain 70%+
GPM in FY22F, driven by advertising business and growing premium users.

Reiterate Add on Xiaomi due to stable global smartphone market share gain.

TP: HK$27

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 4465807A4B

[winston]

not vested

Crippled phone sales sink Xiaomi

Xiaomi (1810) swung to a net loss of 587.6 million yuan (HK$683.2 million) in the first quarter of 2022 from a 7.8 billion yuan profit a year earlier, after accounting for fair value losses in investments.

China's largest smartphone maker also posted its first quarterly revenue decline on record after Beijing's strict Covid containment policies and global component shortages crippled smartphone sales.

Revenue in the quarter dropped to 73.35 billion yuan from 76.88 billion a year earlier and fell short of the 74.3 billion expected by analysts, Refinitiv data showed.

Xiaomi, which generates the vast majority of its revenue from selling mobile handsets, said in a filing that its smartphone revenue fell 11 percent year-on-year to 45.8 billion yuan in the quarter, and the shipments also dropped 22.1 percent to 38.5 million units.

The company and rival phonemakers Vivo and Oppo have told suppliers to cut back orders for the next few quarters by more than 20 percent due to the lockdowns and disrupted supply chains, Nikkei reported.

Source: The Standard

https://www.thestandard.com.hk/section- ... ink-Xiaomi

[winston]

not vested

Xiaomi’s business hit hard by China’s Covid-19 lockdowns as profit halves in first quarter Xiaomi said its first-quarter revenue fell 4.6 per cent from the same period a year earlier to 73.4 billion yuan

by Che Pan

SMIC: Chip demand from downstream sectors such as smartphones, consumer products and personal computers had “dropped like a stone”.

Source: SCMP

https://www.scmp.com/tech/article/31784 ... st-quarter

[winston]

not vested

Brokers│Views

Goldman Sachs│1Q results in line

CLSA│2022-23E earnings reduced amid weak consumer sentiment and supply and logistics headwinds

Citigroup│Upbeat on XIAOMI-W's growth outlook

UOB Kay Hian│Target price cut to $16.3 due to higher opex and weaker sales
performance

Nomura│1Q sales and GPM slightly beat; focus on opex increase and fair value loss on investments

UBS│1Q net profit in line

Morgan Stanley│Quarterly results weaker than expected; smartphone business tepid in domestic and overseas markets

Related News: CLSA: XIAOMI-W (01810.HK) 1Q22 Results Weak but In Line; 2022E, 2023E Adj. NP Cut by 3%, 4%

Source: AAStocks Financial News

[winston]

Xiaomi Corp (1810 HK): Longer term growth engines are intact [BUY; TP: HK$14.50]

1Q22 revenue declined by 5% y-o-y to Rmb 73bn due to weak smartphone shipment, in line

Adjusted net profit tumbled 52.9% to Rmb 2.9bn, missing market consensus by 6%

Cut FY22/23/24F earnings by 36%/ 25%/ 24% as we lowered smartphone shipment estimates

Maintain BUY as negatives are priced in, TP reduced to HK$14.5 to reflect our revised earnings forecasts

Source: DBS