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<Research>Jefferies Slashes XIAOMI-W (01810.HK) TP by 30% to $30.45, Trims Profit Forecasts on Overly High Consensus/ Surging Memory Costs
Recommend 19 Positive 20 Negative 26 |
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Jefferies published a research report estimating that, for most smartphone OEMs, memory costs will surge by 3.6x this year. Consequently, the broker expected that XIAOMI-W (01810.HK)'s smartphone volumes will plummet by 55%, partially offset by a 31% increase in average selling price. Most of the cuts will be at mid-to-low-end phones, with about 60% of XIAOMI-W's shipments having an average selling price below US$150. Jefferies forecasted that XIAOMI-W's smartphone gross margin will drop by 7 ppts this year to a historic low of 4%. Together with a lower XIAOMI-W's auto gross margin forecast, the broker predicted that XIAOMI-W's 2026 revenue/ EBIT forecasts will be 16%/ 34% lower than market peers, respectively. Based on a SOTP valuation, Jefferies slashed its target price for XIAOMI-W by nearly 30% to $30.45 from $43.36, with rating at Hold, indicating that the market's expectations for the Company are too high and that memory costs continued to pose a downside risk to earnings. AASTOCKS Financial News Website: www.aastocks.com |
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