I'm still in the black with Xiaomi $1810 (+5,18 %) but they are in free fall ... What do you think, would it be better to take the 17% with you, or go for the long term and hold?

📈 Xiaomi share - Fundamental analysis & growth potential 🚀

Xiaomi $1810 (+5,18 %) has delivered strong figures and shown impressive growth in recent quarters! 🔥

✅ Sales increase: +48.8% in Q4 2024 to 109 billion yuan (approx. USD 15.1 billion) 📊

✅ Net profit: +69.4% to 8.32 billion yuan 💰

✅ Annual record: 365.91 billion yuan turnover in 2024 - +35% profit growth 🚀

✅ Booming IoT & lifestyle sector: +30% growth 📡

✅ Electric vehicles as a new sales driver: 32.1 billion yuan turnover with an 18.5% margin 🚗⚡

🔎 Analysts remain optimistic:

📊 Profit forecasts have been revised upwards several times.

📈 Strong liquidity and margin profile offers long-term security.

Xiaomi is not only convincing with smartphones, but also with smart home devices, AI and now also with e-cars! I will continue to buy the share as I am convinced that it still has significant upside potential. 🚀

💬 How do you see the future of Xiaomi? Does the share still have room to rise or is it already fairly valued? 👇🔥

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I would like to summarize my impressions and the most important findings from Xiaomi's conference call ($1810 (+5,18 %)) on the 2024 annual results.

Lu Weibing, President of Xiaomi, and Alain Lam, CFO, hosted the call.

Lu started with strategic and business updates. He emphasized that 2024 will be a milestone year for Xiaomi was. Under the human-car-home strategy it has entered a rapid growth path, with progress in cell phones, automobiles, IoT and other business areas. Xiaomi had initially completed the business cycle of development and achieved greater visibility and controllability of operations through management reforms.

Lu highlighted three main aspects: the core achievements of 2024, the changes in competence development over the past five years and the strategic outlook. He reported that Xiaomi Group 2024 will achieve high growth growth, with new historic highs in annual annual revenue (CNY 365.9 billion, +35% year-on-year) and net profit (adjusted CNY 27.2 billion, +41% year-on-year). He said that this marks the third growth path of Xiaomi only nine months after the launch of the Xiaomi SU7 has opened. For the first nine months 248,000 units and surprisingly, the monthly new orders continue to grow one year after the SU7 was launched.

The cell phone division has clearly outperformed the market. The shipments increased by more than 15% compared to the previous yearand Xiaomi was the fastest growing among the top 5 manufacturers, maintaining its global ranking has remained in the top 3 for 18 consecutive quarters. for 18 consecutive quarters. The global market share increased by 1 percentage point to 13,8% increased. In the area of premiumization there have been major breakthroughs, particularly in the 4,000 to 6,000 RMB price segment.

The IoT and AI business have also shown strong growth. The tablet sales increased by more than 70%, and the wearable division took second place worldwide with a market share of 15.2%. The business with large household appliances grew by more than 55% compared to the previous year. The IoT business continues to play the role of a profit stabilizer. The annual gross profit margin has increased significantly by 3.9 percentage points to 20,3% improved.

These successes are the result of continuous efforts to develop expertise in recent years. There has been a change in the business philosophy from "scale first" to the pursuit of long-term, sustainable, high-quality growth. In 2023, the Human Car Home strategy was specified and divided into six sub-categories, including the high-end strategy, the industrial leadership strategy, AI-OS and the new retail strategies. Under this objective, investments in research and development continuously increased.

The R&D investments amounted to 2024 CNY 24.1 billion and is expected to reach CNY 30 billion by 2025. These investments have created a solid product base, as shown by the positive feedback on the Xiaomi SU7 in terms of quality, safety, range and intelligence. The SU7 Ultra prototype even set a global speed record for affordable cars on the Nürburgring. In the field of high-end development a significant increase in market share in the 4,000 to 6,000 RMB price segment for cell phones from 5.6% in 2020 to 16.8% in 2024 has been recorded over the past five years. The recently launched high-end products Xiaomi 15 Ultra and Xiaomi SU7 Ultra have exceeded expectations.

With a retail price of CNY 529,900, the Xiaomi SU7 Ultra received over 10,000 orders within three days. In the future, the high-end development across all product categories.

In addition to the high-end strategy, the new retail strategy is being pursued. By the end of 2024, around 15,000 Xiaomi Home Stores and 200 car sales outlets have been have been established. The market share for cell phones in China doubled from 5.2% in 2020 to 10.3% in 2024. The new retail model has been successfully expanded from the 3C sector to the automotive sector. The goal for this year is to open a further 5,000 stores in China and to operate 20,000 Xiaomi Home Stores in the future. The company also plans to expand its international presence with 500 more and a total of 10,000 Xiaomi Home Stores abroad.

AI technology is already permeating all business areas. In the future, AI will be used to develop the underlying HyperOS with the aim of achieving an AI-OS evolution within two to three years. AI-OS evolution and comprehensively improve the user experience. In addition to high-end development, the optimization of the organization and management system is also being continuously promoted. Lu reiterated that the success of Xiaomi Automobile and other businesses has proven the strength and universality of the Xiaomi model and methodology, which continuously creates popular products that exceed users' expectations through precise user insights and high R&D investment.

Alain Lam then presented the financial performance for 2024, repeating the previously mentioned record figures for turnover (CNY 365.9 billion, +35% yoy) and emphasized that revenue had increased in every quarter of the year, both year-on-year and quarter-on-quarter. In the fourth quarter, sales exceeded the 100 billion RMB mark for the first time and reached 109 billion RMB year-on-year growth of 48.8%, the fastest growth since the third quarter of 2024. comprehensive gross profit margin for the year was 20,9% and showed a stable performance. The revenue of the segment Mobile Phones and AIoT amounted to CNY 333.2 billionan increase of 22.9% compared to the previous year, with the gross profit margin remaining unchanged year-on-year at 21.2%.

Looking at the details, the sales with smartphones in the year 2024 CNY 191.8 billion (+21.8% yoy) and accounted for 52.4% of total sales. In the fourth quarter, smartphone sales amounted to CNY 51.3 billion (+16% yoy). The global smartphone shipments amounted to 168.5 million units (+15.7% yoy). According to analyst data, Xiaomi occupied a market share of market share of 13.8% third place worldwide. In 56 markets worldwide, the annual smartphone market share was among the top 3.

The area of IoT and consumer products also showed an excellent performance with sales of CNY 104.1 billion (+30% yoy), exceeding the RMB 100 billion mark for the first time. The gross profit margin reached 20,3% a new all-time high (+3.9 percentage points yoy). The business with Smart Home Appliances grew by 47.4% compared to the previous year. The tablet sales increased by more than 73% compared to the previous year, putting Xiaomi in fifth place worldwide. Wearable devices maintained their high growth and remained the industry leader.

In the area of Internet Services the user base was further expanded. The global monthly active users (MAU) exceeded the 700 million mark in December 2024 (+9.5% yoy), with MAU in China reaching 173 million (+11.1% yoy). Revenue from the Internet Services business exceeded the CNY 9 billion mark for the first time in the fourth quarter of 2024, reaching CNY 9.3 billion. The annual revenue amounted to CNY 34.1 billion (+13.3% yoy), a new all-time high.

Sales of smart EVs amounted to 2024 CNY 32.8 billion and accounted for 9% of total sales. Revenue from sales of Smart EVs amounted to CNY 32.1 billion, and other related businesses contributed CNY 700 million, with a comprehensive gross profit margin of 18.5%. In 2024, a total of 136,854 Xiaomi SU7 were shipped with an average selling price of RMB 234,479. The Smart EV and other innovative businesses caused a loss of loss of RMB 6.2 billionwhich decreased by 7.1% compared to the previous year. For 2025, the focus is on increasing production capacity and launching the YU7 in the middle of the year, with the target of 350,000 new cars to be delivered.

In the subsequent Q&A part analysts asked various questions, which Mr. Lu and Mr. Lam answered in detail.

Andy Meng from Morgan Stanley praised the results and asked about the EV production capacity in view of the target of 350,000 units and the demand for the Ultra model, as well as the plans for overseas expansion. plans for overseas expansionespecially in the AI sector. Lu replied that the current delivery rate is about 20,000 units per month and they are and that they are working with suppliers to ensure supply. The foreign markets in the IoT sector offer four times the potential of the domestic market. The focus is on the expansion of Xiaomi Home Stores abroad, with the first European stores in Poland and further openings planned in Southeast Asia, Europe, Japan and Korea in the second quarter of the year. The growth in the foreign IoT business is slower than in China, but is showing progress.

Timothy Zhao from Goldman Sachs also congratulated and asked about the AI strategies and expectations and the R&D spending and investment areas in the AI sector and the expansion of the factories in Wuhan. Lu explained that we are still still two to three years away from real adaptation, but but is already seeing positive surprises in products with AI functions. AI is very important for Xiaomiand of the planned R&D investment of around CNY 30 billion, about a quarter will be spent on AI, although actual spending may be higher. Lam added that the CapEx for 2024 is over CNY 10 billion and is expected to be even higher in 2025, with the increase mainly due to AI investments.

Hiu King Wong from Citibank asked about the influence of national subsidies on growth in the fourth quarter and the first quarter and the cost cost outlook for this year. Lu explained that the national subsidies vary depending on the product category and hardly played a role for cell phones last year. The influence was greater for laptops and tablets. Overall, however, the subsidies would not be solely responsible for strong growth. For 2025, he expects an an increase in component prices with short-term price volatility, but falling prices in the medium term.

An analyst from CITI also offered his congratulations and asked about the gross profit margin in the automotive business and when this could become profitable, as well as the reasons for the strong growth in the Internet businessespecially in the advertising sector. Lam predicted that the gross profit margin in the automotive business for 2025 and beyond will be at least at the level of the first quarter. However, there is not yet a strict timetable for the profitability of the automotive business as investments in core technologies and production capacity remain strong. Growth in the Internet business is due to the user base and the optimization of the user structure through high-end devices. user structure through high-end devices. The advertising business is particularly strong abroad and has a high profit margin, which contributes to the increase in the overall gross profit margin. The average revenue per user both in Germany and abroad.

Yingbo Xu from CITIC inquired about the speed of the expansion expansion of the retail network in China and the status of the cars on display and the the potential of AI agents in the IoT sector and the use of Internet advantages for sales and network. Lu reiterated the target of 20,000 stores over 500 square meters and 400 more stores in China. in China. This expansion would bring advantages such as larger spaces and a higher-quality image. On the subject of AI agents he sees great potential for Xiaomi products in various scenarios and emphasizes the high level of investment in this area, including large voice models. The reputation of Super AI among users is very strong.

Zoe Xu from UBS asked about the medium and long-term plans for production capacity in the in the automotive sector in view of long delivery times and the launch of the YU7. Mr. Lu acknowledged that delivery delivery times are currently the biggest challenge and that intensive efforts are being made to increase capacity, with safety and quality being the top priorities.

Cherry Ma asked about the market prospects for cell phones this year, the market share and the strategies for Western Europewhere there has recently been a decline. Mr. Lu expects the cell phone market to grow by only growth of only 1% to 3% this year and aims to increase its own market share by 1%. There has been a decline in Western Europe due to a deliberate adjustment to focus on medium and focus on medium and high-priced products. products. Market share and the average sales price in Western Europe are expected to improve again in the future.

Conclusion:

The financial results for 2024 are impressive, with all-time highs in revenue and profit, driven by strong growth in all segments. The human car home strategy seems to be bearing fruit, in particular the successful launch of the Xiaomi SU7 has opened up a new growth path.

Xiaomi shows a clear focus on high-end products, technological innovation (especially AI) and the expansion of the retail network both in China and internationally. The high investments in research and development underline Xiaomi's long-term strategic approach of becoming a global technology leader.

Nike exceeds forecasts despite declines + Fedex lowers business outlook + Micron Technology surprisingly optimistic about the third quarter + Xiaomi 2024 with record sales

Nike $NKE (+0 %)exceeds forecasts despite declines

• The sporting goods giant Nike continues to struggle with declining sales even under a new boss.
• In the third quarter (to the end of February) of the 2024/25 financial year, revenue fell by nine percent year-on-year to 11.3 billion US dollars (10.4 billion euros).
• Nike thus slightly exceeded the expectations of analysts, who had expected an average of just over eleven billion dollars.
• On balance, the quarterly profit fell by 32 percent to 794 million dollars.
• However, Nike's earnings per share of 54 US cents clearly exceeded the analysts' forecast of 29 cents.
• In an initial reaction, the share price rose by more than three percent in US after-hours trading.
• One trigger for the decline in turnover was a slump in business in China.
• In October, former top manager Elliott Hill returned to Nike from retirement to take over the top job.
• Part of his predecessor John Donahoe's strategy was to focus more on direct sales.
• The downside, however, was that the shelf space given up by Nike in stores was filled by products from competitors.
• This made the rivals more visible to consumers.

Fedex $FDX (-12,02 %)lowers business outlook

• Weak demand is making the US logistics group Fedex more cautious for the 2024/25 financial year, which runs until the end of May.
• According to a statement issued on Thursday evening, Group CEO Raj Subramaniam now expects stable to slightly declining sales, after previously assuming a roughly stable development.
• According to the manager, the revised outlook reflects the ongoing weakness and uncertainty in the US industry.
• Demand for shipping services among business customers is suffering as a result.
• Adjusted for special effects, earnings per share are expected to reach 18.00 to 18.60 US dollars instead of 19 to 20 dollars.
• The average analyst estimate is above the upper end of the new target - and the rival of DHL Group and UPS now intends to invest less money in the business than previously planned.
• In the third quarter of the past financial year, Fedex increased its turnover by a good two percent to 22.2 billion US dollars (20.4 billion euros).
• Adjusted earnings per share grew by 17 percent to 4.51 dollars.
• On average, analysts had expected slightly higher earnings per share.

Micron Technology $MU (-14,08 %)is surprisingly optimistic about the third quarter

• The manufacturer of DRAM and NAND memory chips Micron Technology is more optimistic than expected about the current third financial quarter due to AI-driven demand from data center operators.
• The company is also confident about demand from consumer electronics manufacturers.
• Sales in the third financial quarter should therefore reach 8.80 billion US dollars plus/minus 200 million dollars, the company stated on Thursday evening after the US stock exchange closed.
• Adjusted for special effects, earnings per share are expected to reach 1.57 dollars - plus or minus 10 cents.
• The Micron share price rose by almost five percent in US after-hours trading.
• The outlook could signal an upturn in demand from smartphone and PC manufacturers, which has been rather sluggish across the industry for some time.
• During the coronavirus pandemic, these manufacturers had filled their warehouses as full as possible due to a shortage of parts, but were then left with excessively high inventories after the end of the pandemic, which first had to be reduced.
• This also affected manufacturers of semiconductor wafers such as the German Siltronic Group.
• The wafers are the starting product for computer chips.
• In the second quarter (ending February 27), Micron increased its turnover by 38 percent year-on-year to 8.05 billion dollars (7.4 billion euros).
• The bottom line profit doubled to just under 1.6 billion dollars.

Xiaomi $1810 (+5,18 %)2024 with record turnover of RMB 365.9 billion

• Record year for Xiaomi
• Total sales in 2024 increased by 35 percent to RMB 365.9 billion
• Q4 over RMB 100 billion for the first time
• Adjusted net profit grows by 41.3 percent to RMB 27.2 billion.
• Strong growth in key areas: smartphone sales increase to RMB 191.8 billion (+21.8%)
• Electric vehicles and new initiatives generate RMB 32.8 billion in sales
• IoT and lifestyle products grow by 30% to RMB 104.1 billion
• Successful push into the ultra-premium segment: Xiaomi 15 Ultra and SU7 Ultra with strong sales figures, secured orders for SU7 Ultra exceed 10,000 units - annual target achieved ahead of schedule.
• Technological innovation and AI integration: R&D investments increase by 25.9% to RMB 24.1 billion, over 42,000 patents worldwide
• HyperOS 2 strengthens networking and AI applications in the "Human x Car x Home" ecosystem.

Friday: Stock market dates, economic data, quarterly figures

• ex-dividend of individual stocks
• BB Biotech CHF 1.80
• Walmart 0.24 USD

• Quarterly figures / company dates Europe
• 07:00 Fuchs annual result
• 07:30 Salzgitter annual result
• 10:00 Fuchs | Salzgitter PK
• 11:00 Salzgitter Analysts' Conference
• 12:00 Fuchs Analyst Conference
• No time specified: BASF Annual Report

• Economic data

01:50 JP: Nationwide consumer prices February Forecast: n/a previous: +4.0% yoy Core consumer prices (ex food) Forecast: n/a previous: +3.2% yoy

08:45 FR: Business Climate Index March PROGNOSE: 97 previous: 97

10:00 EU: ECB, current account euro area January

16:00 EU: Eurozone Consumer Confidence Index (flash estimate) March FORECAST: -13.0 previous: -13.6

Untimed: BE: EU Summit, Brussels

Only moved sideways for 3 years. Also still $DHL (-4,07 %) sold. But 10x $DB1 (+2,06 %) bought and another 125x $1810 (+5,18 %) ✅

The Chinese $1810 (+5,18 %) reported a nearly 50 percent jump in fourth-quarter sales on Tuesday, beating analysts' estimates and raising its target for electric vehicle deliveries in 2025 to 350,000.

The company reported a 48.8 percent jump in fourth-quarter revenue on Tuesday, which amounted to 109 billion yuan ( $15 .09 billion), beating the average of 17 analyst estimates compiled by LSEG of 103.94 billion yuan.

Adjusted net profit rose 69.4 percent year-on-year to 8.32 billion yuan, above the average analyst estimate of 6.399 billion yuan.

Xiaomi's Hong Kong-listed shares closed up 3.3% on Monday before the results were released.

Xiaomi has surged 284% in the past 12 months as its EV project has boosted investor confidence.

Xiaomi reported 32.1 billion yuan in revenue for its EV business in 2024 and delivered more than 135,000 SU7 sedans. Adjusted net loss related to its EV and other new initiatives reached 6.2 billion yuan.

Source: reuters.com

If you don't want to read the report...below is a short summary

1. the US labor market and the risk of recession

The US economy is in a precarious phase. The S&P 500 has fallen below its 200-day line for the first time since October 2023. Even more critical is the price ratio of the S&P 500 to US Treasuries ($TLT)which is once again at the 200DMA line, essentially a support level that has served as a psychological barrier against a bear market since December 2020 (Chart 2). The most recent Februar-Payroll-Daten with 151k new jobs was right in the middle of nowhere. A jobs report of over 200k would have been a strong reading and would have indicated that the US economy is robust enough to withstand higher interest rates. Stock markets would have stabilized as there was no imminent threat of recession; a report of 125k would have been a weak reading and would have indicated a cooling economy and falling corporate profits. The market would have slipped into a bear market phase, while bonds would have benefited as a safe haven.151k jobs lie exactly between these thresholds and offer no clear basis for interpretation.

Another alarming signal comes from the ratio of US consumer discretionary stocks to Staples stockswhich has reached an all-time high (Chart 5). For decades, this ratio has been a reliable early indicator of an imminent weak phase for the S&P 500. You could say that the USA is one payroll report away from a recession. The background to this is the dwindling influence of government job subsidies: In January 2025, the following 70% des Arbeitsmarktwachstums came from the public sector, a significant decline from 85% in the previous year. At the same time, the household savings rate is rising.

2 Global military spending: Europe in a fiscal dilemma

Germany's military expenditure amounts to only 7% of US spending, the United Kingdom reaches 8% (Charts 6 and 7). This explains why European budget deficits are exploding: For Germany, an average deficit of -4% of GDP is forecast for Germany for the period 2025-2030 (Chart 9). The "Whatever-it-takes" policy on Merz is driving the yields of German Bundesanleihen to over 3% (15-year high) and British Gilts to over 5,5% (27-year high).

German Bund yields could overtake US Treasuries this year (Chart 3).

3. flight to safety, exodus at risk

• $965515 (-2,71 %) recorded the largest 4-week inflow of all time (USD 9.9 bn, chart 12). Gold is seen as a safe haven as investors seek hedges in the face of geopolitical uncertainty and looming recessions.

• Crypto funds experienced a record outflow of USD 3.6 billion (Chart 13), the largest since records began. Volatility in Bitcoin and Ethereum and regulatory concerns are deterring institutional investors.

• Infrastructure funds recorded the largest outflow of all time (USD 0.9 bn, Chart 15) as rising interest rates weigh on the valuation of long-term projects.

• European equities saw the strongest 4-week inflow since August 2015 (USD 12 bn, chart 14). The drivers are the relatively low valuations and the focus on European industrial companies and banks.

• Emerging markets saw the largest inflow in three months (USD 2.4 bn), supported by China's tech revival and India's reform momentum.

• TIPS saw an 8-week inflow streak, the longest since December 2021, as investors want to be prepared for potential stagflation.

4 AI shock and tech

The DeepSeek AI shock has rearranged the tech bubble. The Magnificent 7 ($AAPL (-6,25 %) , $MSFT (-2,62 %) , $NVDA (-6,05 %) , $AMZN (+0 %) , $GOOGL (-3,55 %) , $META (-7,03 %) ) lost 3 trillion USD in market capitalization and are now known as the Lagnificent 7 are mocked. At the same time, the market capitalization of China's BATX ($9888 (-3,13 %) , $9988 (-2,08 %) , $700 (-1,49 %) , $1810 (+5,18 %)) to 1.6 trillion USDa sign that Chinese companies are catching up in the AI sector.

This shift is also reflected in the US-ISM-Manufacturing-PMI-Daten (Charts 10 & 11): The recent rise to 55 points is seen as tariff frontrunning interpreted. Companies stocked up their inventories ahead of time in order to circumvent expected trade barriers (e.g. new US tariffs on Chinese semiconductors). However, this short-term upswing masks structural weaknesses: The cyclicals vs. defensives ratio (Chart 11) points to an imminent slowdown in industrial activity. The cyclicals vs. defensives ratio compares the performance of cyclical stocks (industrials, commodities, consumer goods) with that of defensive stocks (utilities, healthcare, consumer staples). Basically serves as a leading indicator for economic expectations.

5. forecasts 2025: strategic decisions

Recommendation: Buy 30YUST with a yield target of below 4%. Reasons:

• The US government is ending its 5-year phase of excessive spending, leading to a decline in demand.
• 70% of job growth in January 2025 came from the public sector, a sign of private sector weakness.

At the same time, one can UK Gilts & EU bonds can be classified as sell candidates. The yields of UK gilts are at 5,5% (27-year high), driven by the cost of rearmament and a budget deficit of 6.1% of GDP.

Equities: Europe and China in focus

• European markets: The DAX (+18% YTD) and the Euro Stoxx 50 (+13% YTD) are benefiting from undervalued industrial companies and banks. Despite a net outflow of USD 255 bn since 2022 flowed for the first time in the last 4 weeks 4 bn USD returned for the first time, a good sign.

• China: H-shares (+23% YTD) are attracting capital as Chinese tech companies benefit from the AI revolution and government subsidies.

• India: Small caps are 21% below their September 2024 high (Chart 4), but offer long-term opportunities in the context of the Make in India Initiative

Weak dollar, strong exporters

A weak US dollar favors European and Chinese exporters. At the same time US semiconductors could experience a recovery: The equal-weighted Semiconductor Index($esox) has 73% of its gains since the ChatGPT hype in May 2023. The tech sector also saw an inflow for the first time in 5 weeks (USD 2.6bn).

6. trouble spots: Japan and the ticking debt bomb

The 30-jährigen JGB-Renditen are quoted at 2,5% (17-year high), while the Bank of Japan with a key interest rate of 0,5% well behind the wage growth (5-6%) is lagging behind wage growth. Should the BoJ tighten its policy in order to regain credibility, there is a risk of a Nikkei Sell Offsimilar to the in August 2024when the yen appreciated sharply and Carry-Trades collapsed. If it fails to act, the weakness of the yen could push up import costs further and exacerbate stagflation.

7. summary 2025

2025 will be dominated by three megatrends:

• Long-dated US Treasuries and gold serve as protection against recession and stagflation.
• Europe and China take advantage of the weakness of the US dollar and technological upheavals.
• Japan's debt crisis, Europe's fiscal overheating and the fragility of the US labor market.

• Buy: European industrial stocks ($SIE (-7,02 %) , $ASML (-7,33 %) ), China's BATX, 30-year US Treasuries, gold.
• Dont's: UK/EU bonds, crypto, infrastructure funds.
• Wacth: BoJ policy, US payroll data, Indo-Pacific geopolitics.

Position size reduced by ⅓ and first partial profits taken 👍

$1810 (+5,18 %) has evolved from a pure smartphone manufacturer into a versatile technology group whose ecosystem competes with industry leaders such as Apple and Amazon. The company is strengthening its market position and customer loyalty through strategic expansion into premium smartphones, connected IoT devices and electromobility.

Successful expansion in the premium smartphone market

Xiaomi has consolidated its position in the premium segment with models such as the Xiaomi 15 Ultra. These devices are characterized by high-quality workmanship, powerful hardware and innovative functions that appeal to both tech-savvy users and professional users. The integration of AI and advanced camera systems, often in collaboration with renowned brands such as Leica, underlines Xiaomi's commitment to quality and user experience.

Growth in the IoT and lifestyle segment

Xiaomi's IoT and lifestyle segment recorded revenue of RMB 26.1 billion in the third quarter of 2024, an increase of 26.3% year-on-year. The company offers a wide range of connected devices, including smart TVs, home appliances and wearables that are seamlessly integrated into the Xiaomi ecosystem. This strategy promotes customer loyalty and increases the brand's appeal to tech-savvy consumers.

Breakthrough in the electromobility sector

Xiaomi has taken a significant step by entering the electric mobility market. The SU7 electric vehicle exceeded the original sales targets with over 135,000 units delivered in 2024. This model successfully competes with established brands and offers an attractive price-performance ratio. The launch of the upcoming Yu7 model, which is expected to compete directly with Tesla's Model Y, could further strengthen Xiaomi's position in the EV market.

Financial performance and future prospects

In the second quarter of 2024, Xiaomi achieved record revenue of $12.2 billion, marking the third consecutive quarter of double-digit growth Analysts forecast earnings per share of $0.1197 CNY for the fiscal year 2024. Despite this positive development, the share is currently trading at a comparatively low valuation multiple of 2.3x, while competitors such as Apple and Tesla are trading at 8x. A conservative revaluation to a 3x multiple could mean a price potential of 40% to $8.48 per share. If the strategic initiatives continue to be successful, a valuation of 5x would even be possible, which would correspond to a price target of over $10 and a potential upside of 143%.

Risks and challenges

Despite the positive outlook, there are risks, particularly with regard to the acceptance of new products. The upcoming launches of the Xiaomi 15 Ultra and Yu7 will be crucial for future growth. A failure of these products could affect the growth momentum and negatively impact the share valuation. In addition, Xiaomi's EV division is currently operating at a loss; a deficit of USD 0.3 billion was recorded in the third quarter of 2024. Intense competition in the EV market and pressure to bring low-cost models to market quickly pose further challenges.

Conclusion

Xiaomi's transformation into a versatile technology company with a robust ecosystem positions the company as a serious competitor to established brands such as Apple and Tesla. The successful expansion into new business areas, especially electromobility, and the continuous innovation in the premium smartphone and IoT segment underpin the growth potential. However, investors should be aware of the existing risks and monitor market developments closely.

Today I decided to sell parts of my Xiaomi position to take first profits. I think the best scenario would be if I can buy again in the event of a major correction.