Quam Securities Research

Quam Securities

Equity Bottom-Up

<h2>Xiaomi (1810 HK)</h2>
<h3>Raise PT on potential forays into EV</h3>
<p>Target price revision</p>
<p><strong>We turn more positive on Xiaomi following news about its potential EV partnership with BYD, and 1Q21 analyst call which highlighted the drivers underpinning its solid earnings beat, as well as medium to long term catalysts.  We expect Xiaomi will retain its strong growth momentum in 2021-23E on the back of overseas market share gain, 5G tailwind and strong ecosystem strategy.  We reiterate our Buy rating with a higher TP</strong>…</p>

<h2>Xiaomi  (1810 HK; BUY; TP:HK$32.00)</h2>
<h3>Removal from US blacklist relieves share price overhang</h3>
<p>Company Quick Take</p>
<p><strong>On May 12, US Department of Defense (DOD) issued a court filing vacating a previous order on Xiaomi that aimed to restrict US investors from investing in its shares, which served to resolve a litigation filed by Xiaomi. We view the lifting of US trading restriction, possible re-inclusion in FTSE Russell indices and sustainable smartphone market share gains as key share price catalysts.</strong>…</p>

<h2>Xiaomi (1810 HK)</h2>
<h3>Poised for multi-year earnings growth</h3>
<p>Results comment</p>
<p><strong>Xiaomi reported FY20 revenue of RMB245.9 bn (+19.4% y/y) and adjusted net profit of RMB 13.0 bn (+12.8% y/y) which was slightly ahead of consensus estimates. The solid set of results was underpinned by (1) strong smartphone performance, (2) successful execution of its ecosystem and overseas expansion strategies, and (3) product mix innovation for its internet services segment. We reiterate our positive view on Xiaomi as a</strong>…</p>

<h2>Xiaomi (1810 HK)</h2>
<h3>Injunction Against Xiaomi U.S. Ban</h3>
<p>On March 12, US federal judge issued a preliminary injunction to remove Xiaomi from a list of companies with alleged links to Chinese military and lifted restrictions for US investments in Xiaomi shares. We view this temporary removal and Xiaomi’s recent share repurchase plan as key drivers that relieves overhang on its shares. We expect Xiaomi will retain its strong growth momentum in 2021-22E, driven by its rising market shares, increasing 5G…</p>

Selected Reads

Smartkarma

<p><em> CES 2021, Samsung Galaxy S21, Section 230, escaping big tech, Clubhouse Misinformation has slowed now that Trump is off Twitter. Denise describes the effects of Section 230 on big tech. Is it possible for someone to escape big tech if they want to? Germany and France don't agree with Trump's deplatforming. Is CES 2021 the model for trade shows going forward? IoT at the Consumer Electronics Show. Samsung unveiled the Galaxy S21 series smartphone. Galaxy S21 will not support MST payments. Samsung</em>…</p>

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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