Chinese smartphone company Xiaomi reported record-breaking net profit for the second quarter last week, bolstering analysts’ convictions on Hong Kong listed stocks. In absolute dollar terms, Xiaomi’s revenue is still part of Apple. However, while Chinese companies have a larger smartphone market share in China and are building an electric vehicle business, iPhone manufacturers have removed their car plans. Apple has been under pressure from the Trump administration on its overseas supply chains in recent months. Apple’s stocks fell 20% from the start of the year to around $200. Xiaomi’s won over 45% per share, Hong Kong dollars 50.95 ($6.50). Following Xiaomi’s revenue report on May 27, Jefferies analysts raised their price target to HKD 73 from the previous HKD 69.50, up 43% since the end of Friday. Analysts attributed the company’s revenue beat to the outperformance of “Iot.” The category refers to Xiaomi appliances that incorporate artificial intelligence capabilities and can be controlled remotely over the Internet using apps. Xiaomi’s adjusted net income for the first quarter was 10.688 billion yuan ($1.48 billion), surpassing 9.48 billion yuan, according to a FactSet Analyst poll. Revenues of 1112.9 billion yuan also exceeded the 1004.9 billion yuan forecast in the polls. On smartphones, Xiaomi has become more conservative about its global outlook, but Jefferies analysts pointed out that it is likely to continue to capture market share in the high-end Chinese market with the new Xring O1 chip. Xiaomi officially unveiled the Chip on May 22, saying it would power the new 15S Pro smartphone, which is on sale for much less than Apple’s iPhone 16 Pro in China. CEO Ray Jun has argued at events about several metrics, including the ability to control games with low heat, on Xiaomi’s Xring O1 Apple’s A18 Pro. Smartphones account for just under 40% of Xiaomi’s revenue. Appliances and other products account for almost 22%. “We believe that the appliance represents a major advantage over the next two years. [Xiaomi’s electric SUV] Yu7 will be on sale [the] key [short-term] Jeffries analysts said Xiaomi revealed the Yu7 SUV at the event on May 22nd. Analysts expect Xiaomi to win a higher price than it came on the market last year Analysts look forward to Xiaomi’s Investor Day, scheduled for June 3rd. They both said they are potential positive catalysts. [operating expenses] Macquarie surpasses the stock price with a price target of 69.32 hkd. JPMorgan analysts say Xiaomi’s ecosystem-related revenue growth is the slowest among the major categories. Hardware growth has a price target of 60 HKD, with CNBC’s Michael Bloom contributing to this report.
