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BofAS: XIAOMI-W (01810.HK) 1Q26 Smartphone Gross Margin May Beat; Reiterates Buy
Recommend 19 Positive 35 Negative 9 |
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BofAS issued a research report lowering its revenue forecast for XIAOMI-W (01810.HK) in 1Q26 by 4% to RMB99 billion, down 15% QoQ and down 11% YoY, mainly reflecting slower electric vehicle shipments during the model transition period. The broker expects gross margin in 1Q26 may beat expectations at 21.8%, supported by potential improvement in smartphone product mix and average selling price. As operating expense control will take time to materialize, BofAS cut its forecast for 1Q26 actual operating income by 5% to RMB3.5 billion, up 11% QoQ but down 64% YoY; adjusted earnings were raised by 43% to reflect the impact of share-based compensation. BofAS noted that smartphone brands actively raised prices and adjusted product mix in 1Q26, focusing more on mid- to high-end models. According to Canalys data, XIAOMI-Ws smartphone shipments in 1Q26 declined 19% YoY to about 34 million units, but the broker expects higher average selling prices to offset the drop in shipments and support gross margin performance. For the IoT segment, although 1H26 still faces a high base effect, momentum is expected to recover in 2H26, with overseas expansion continuing to drive long-term growth. For the electric vehicle business, XIAOMI-W said it has received 70,000 orders for the new SU7 model since launch. The broker expects shipments to gradually recover, while upcoming new models YU7 GT and SUY will support growth momentum in 2H26. Given intense competition in the China market, BofAS adjusted its EV shipment forecasts for 2026 and 2027 to 550,000 and 660,000 units, respectively, from previous estimates of 550,000 and 750,000 units. The broker believes overseas expansion starting from 2H27 could drive shipment growth in 2028. Taking into account share-based compensation, BofAS slightly raised its 2026 adjusted earnings forecast by 3%, fine-tuned its 2027 forecast and introduced a 2028 forecast. The broker maintained its Buy rating on XIAOMI-W, with an unchanged TP of HKD40 based on a sum-of-the-parts valuation methodology. (ad/w) Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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