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Xiaomi Corp Class B 01810

Morningstar Rating
HKD 14.94 +0.18 (1.22%)
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Company Report

Xiaomi Earnings: Strong Smartphone Margins Retained

Xiaomi’s fourth-quarter 2023 result was again highlighted by strong margins from smartphones with a smartphone gross margin of 16.4%, double that of fourth-quarter 2022 and down only slightly from the record 16.6% it reported in the third quarter of 2023. The company also continues to spend strongly on research and development, with related expenses up 16% year on year to CNY 5.5 billion, driven in part by spending on smart electric vehicles and other growth initiatives such as robotics. Fourth-quarter revenue was up 10.9% year on year, with operating profit, excluding investment revaluations, up to CNY 4.7 billion from HKD 115 million in the fourth quarter of 2022. The fourth-quarter underlying operating profit margin increased to 6.4% from 0.2% a year ago. We retain our fair value estimate of HKD 16.50 per share and the stock has a 3-star rating at these levels.

Price vs Fair Value

01810 is trading within a range we consider fairly valued.
Price
HKD 14.82
Fair Value
HKD 32.10
Uncertainty
High
1-Star Price
HKD 84.64
5-Star Price
HKD 6.70
Economic Moat
Nzk
Capital Allocation
Qqghygqq

Bulls Say, Bears Say

Bulls

With U.S. rules preventing Huawei sourcing semiconductors with U.S. technology used in production, Xiaomi should benefit from Huawei curtailing smartphone production.

Bears

Xiaomi faces strong competition from the biggest Chinese internet companies in the high margin internet services business.

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News

Trading Information

Previous Close Price
HKD 14.76
Day Range
HKD 14.7015.26
52-Week Range
HKD 9.8616.98
Bid/Ask
HKD 14.94 / HKD 14.96
Market Cap
HKD 372.73 Bil
Volume/Avg
173.5 Mil / 93.1 Mil

Key Statistics

Price/Earnings (Normalized)
28.06
Price/Sales
1.26
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield

Company Profile

Xiaomi is a technology product and services company founded in early 2010, focusing mainly on smartphones and Internet of Things products and related internet services. An early adopter of online smartphone sales, Xiaomi uses Android as its operating system but has its own customized user interface called MIUI. As competition in its home Chinese smartphone market intensified and growth has slowed, it has expanded into other markets and has become the smartphone market leader in India and is gaining market share in Europe. From 2020 to 2022, from a country perspective, around 50% of its overall revenue was generated in mainland China, down from 94% in 2015. The company listed on the Hong Kong market at the beginning of July 2018.
Sector
Technology
Industry
Consumer Electronics
Stock Style Box
Large Growth
Total Number of Employees
33,038

Competitors

Valuation

Metric
01810
00992
005930
Price/Earnings (Normalized)
28.0613.0038.15
Price/Book Value
2.072.271.55
Price/Sales
1.260.271.86
Price/Cash Flow
8.287.229.73
Price/Earnings
01810
00992
005930

Financial Strength

Metric
01810
00992
005930
Quick Ratio
1.390.581.79
Current Ratio
1.810.872.59
Interest Coverage
9.963.468.15
Quick Ratio
01810
00992
005930

Profitability

Metric
01810
00992
005930
Return on Assets (Normalized)
3.87%3.00%4.31%
Return on Equity (Normalized)
7.93%19.65%5.57%
Return on Invested Capital (Normalized)
5.44%13.57%4.52%
Return on Assets
01810
00992
005930
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