Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy Research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Equity Bottom-Up

<ul>
<li>Xiaomi reported CY2Q24 revenue, non-IFRS EBIT and non-IFRS net income 5.6%, 32.2%, and 40.0% vs. consensus. </li>
<li>Despite the limited scale and numerous incentives offered at launch, Xiaomi reported an EV gross margin of 15.4%. Greater scale and reduced incentives provide further margin upside in C2H24;</li>
<li>Xiaomi’s smartphone and IoT market share gain have accelerated amid the halo-effect stemming from the SU7. We reiterate our BUY rating, and raise  TP to HK$27.0, implying 28.3x CY25 P/E.</li>
</ul>


Xiaomi reported CY2Q24 revenue, non-IFRS EBIT and non-IFRS net income 5.6%, 32.2%, and 40.0% vs. consensus. 
Despite the limited scale and numerous incentives offered at launch, Xiaomi reported an EV gross margin of 15.4%. Greater scale and reduced incentives provide further margin upside in C2H24;
Xiaomi’s smartphone and IoT market share gain have accelerated amid the halo-effect stemming from the SU7. We reiterate our BUY rating, and raise  TP to HK$27.0, implying 28.3x CY25 P/E.


[Xiaomi Inc. (1810 HK, BUY, TP HK$27) TP Change]: Surprising SU7 Gross Margin a Huge Positive

Tracking developments across tech supply chains, Tech Supply Chain Tracker

Tech Supply Chain Tracker

Tracking developments across tech supply chains

<ul><li>Singtex's sustainable dyeing plant aims to boost profits by enhancing eco-friendly practices in textile industry</li><li>Tata Motors partners with Delta Electronics and Thunderplus Solutions to set up fast charging stations in India</li><li>Epson dominates robotic arm market with three key strategies, solidifying their leadership position in the industry</li></ul>

Singtex's sustainable dyeing plant aims to boost profits by enhancing eco-friendly practices in textile industryTata Motors partners with Delta Electronics and Thunderplus Solutions to set up fast charging stations in IndiaEpson dominates robotic arm market with three key strategies, solidifying their leadership position in the industry

Tech Supply Chain Tracker (24-Aug-2024): Singtex's new plant boosts revenue with eco-dye.

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Aug 23rd based on HKEx daily reports.</li>
<li>In the past 7 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), AIA (1299 HK), Samsonite International (1910 HK).</li>
<li>In the past 30 days, the top 3 companies that repurchased the most shares from the market were AIA (1299 HK), Tencent (700 HK), Meituan (3690 HK).</li>
</ul>


We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Aug 23rd based on HKEx daily reports.
In the past 7 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), AIA (1299 HK), Samsonite International (1910 HK).
In the past 30 days, the top 3 companies that repurchased the most shares from the market were AIA (1299 HK), Tencent (700 HK), Meituan (3690 HK).


Hong Kong Buybacks Weekly (Aug 23rd): Tencent, Aia, Samsonite International

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>Xiaomi delivered strong 2Q24 revenue/adj.net profit growth of 32%/20% YoY. Adj. net profit is 21%/27% ahead of our/consensus estimates, mainly driven by stronger EV/internet GPM and improving efficiency.</li><li>Xiaomi reported its first EV business financials with a quarterly GPM at 15.7%, well above market expectation of 5-10%, and mgmt. guided QoQ GPM expansion into 3Q/4Q24E.</li><li>Looking ahead, we are positive on Xiaomi smartphones’ global market share gains, new retail strategy execution, AIoT business growth momentum and EV shipment delivery to drive earnings growth into FY24E-25E. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Xiaomi delivered strong 2Q24 revenue/adj.net profit growth of 32%/20% YoY. Adj. net profit is 21%/27% ahead of our/consensus estimates, mainly driven by stronger EV/internet GPM and improving efficiency.Xiaomi reported its first EV business financials with a quarterly GPM at 15.7%, well above market expectation of 5-10%, and mgmt. guided QoQ GPM expansion into 3Q/4Q24E.Looking ahead, we are positive on Xiaomi smartphones’ global market share gains, new retail strategy execution, AIoT business growth momentum and EV shipment delivery to drive earnings growth into FY24E-25E. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Xiaomi (1810 HK) - 2Q24 Beat on EV GPM and Resilient Core Earnings; Reiterate BUY

Thematic (Sector/Industry)

<ul>
<li>1810 HK/981 HK/AAPL US: Xiaomi’s Africa smartphone sales outgrow market in 2Q24 (+/+/-)</li>
<li>XPEV US:Xpeng Motors' revenue in the second quarter was in line with our expectations, and its losses were greater than our expectations(/)</li>
<li>1211 HK/1810 HK/XPEV US/NIO US/LI US:In the 33rd week of 2024, the delivery of new energy vehicles by Xiaomi fluctuated, Leapmotor and Li were strong, and NIO remained weak  (/////////)</li>
</ul>


1810 HK/981 HK/AAPL US: Xiaomi’s Africa smartphone sales outgrow market in 2Q24 (+/+/-)
XPEV US:Xpeng Motors' revenue in the second quarter was in line with our expectations, and its losses were greater than our expectations(/)
1211 HK/1810 HK/XPEV US/NIO US/LI US:In the 33rd week of 2024, the delivery of new energy vehicles by Xiaomi fluctuated, Leapmotor and Li were strong, and NIO remained weak  (/////////)


[Blue Lotus Daily]:1810 HK/981 HK/AAPL US/XPEV US/1211 HK/NIO US/LI US/LKNCY US/002352 CH/2618 HK

China

Xiaomi Corporation manufactures communication equipment and parts. The Company produces and sells mobile phones, smart phone software,  set-top boxes, and related accessories. Xiaomi markets its products worldwide.

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Xiaomi (1810 HK)

[Xiaomi Inc. (1810 HK, BUY, TP HK$27) TP Change]: Surprising SU7 Gross Margin a Huge Positive

Xiaomi beats revenue, EBIT, and net income expectations in CY2Q24, with potential for margin growth in C2H24 due to scale and reduced incentives.

Blue Lotus Research Institute

Tech Supply Chain Tracker (24-Aug-2024): Singtex's new plant boosts revenue with eco-dye.

Singtex's sustainable dyeing plant boosts profits, South Korea's EV market hurt by battery fires, Tata Motors partners for fast charging stations,...

Tech Supply Chain Tracker

Hong Kong Buybacks Weekly (Aug 23rd): Tencent, Aia, Samsonite International

We analyzed the Hong Kong buyback data in the past week and highlight the top 3 companies that repurchased the most shares were Tencent (700 HK),...

Ke Yan, CFA, FRM

Xiaomi (1810 HK) - 2Q24 Beat on EV GPM and Resilient Core Earnings; Reiterate BUY

Xiaomi delivered strong 2Q24 revenue/adj.net profit growth of 32%/20% YoY. Adj. net profit is 21%/27% ahead of our/consensus estimates, mainly...

CMB International

[Blue Lotus Daily]:1810 HK/981 HK/AAPL US/XPEV US/1211 HK/NIO US/LI US/LKNCY US/002352 CH/2618 HK

Xiaomi's smartphone sales in Africa outperform market, Xpeng Motors' Q2 revenue meets but losses exceed expectations, new energy vehicle...

Blue Lotus Research Institute

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52-week Range

Market Cap (USDm)

P/E

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[Xiaomi Inc. (1810 HK, BUY, TP HK$27) TP Change]: Surprising SU7 Gross Margin a Huge Positive

​Xiaomi beats revenue, EBIT, and net income expectations in CY2Q24, with potential for margin growth in C2H24 due to scale and reduced incentives.

Blue Lotus Research Institute

Tech Supply Chain Tracker (24-Aug-2024): Singtex's new plant boosts revenue with eco-dye.

Singtex's sustainable dyeing plant boosts profits, South Korea's EV market hurt by battery fires, Tata Motors partners for fast charging stations,...

Tech Supply Chain Tracker

Hong Kong Buybacks Weekly (Aug 23rd): Tencent, Aia, Samsonite International

We analyzed the Hong Kong buyback data in the past week and highlight the top 3 companies that repurchased the most shares were Tencent (700 HK),...

Ke Yan, CFA, FRM

Xiaomi (1810 HK) - 2Q24 Beat on EV GPM and Resilient Core Earnings; Reiterate BUY

Xiaomi delivered strong 2Q24 revenue/adj.net profit growth of 32%/20% YoY. Adj. net profit is 21%/27% ahead of our/consensus estimates, mainly...

CMB International

[Blue Lotus Daily]:1810 HK/981 HK/AAPL US/XPEV US/1211 HK/NIO US/LI US/LKNCY US/002352 CH/2618 HK

​Xiaomi's smartphone sales in Africa outperform market, Xpeng Motors' Q2 revenue meets but losses exceed expectations, new energy vehicle...

Blue Lotus Research Institute

Xiaomi beats revenue, EBIT, and net income expectations in CY2Q24, with potential for margin growth in C2H24 due to scale and reduced incentives.

Xiaomi's smartphone sales in Africa outperform market, Xpeng Motors' Q2 revenue meets but losses exceed expectations, new energy vehicle...