Daiwa released a research report stating that it maintained its target price for Xiaomi (01810) at HK$28, equivalent to a forecast price-to-market ratio of 28, while raising its revenue forecast for the group from this year to 2023 by 2% to 5% to reflect strong hardware product sales. The rating was upgraded from "hold" to "outperform".
The bank believes that Xiaomi's recent stock price correction and its resilient fundamentals under regulatory pressure have increased its attractiveness. The company's performance in the second quarter of this year was steady and better than expected, and the gross profit margin of the hardware business during the promotion season was still better than the bank expected. The group announced the acquisition of Deep Motion, an autonomous driving technology company, for its new electric vehicle business, believing that its strategy of gaining market share through its products and sales channels has been effective.
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