Among the famous Hong Kong stocks, Xiaomi Corporation (HK:1810) received a Buy rating from analyst Alex NG from CMB International Securities, predicting an upside potential of over 50%. Overall, the stock carries a Strong Buy rating on TipRanks.
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Xiaomi is a manufacturing company that specializes in consumer electronics and smart devices. It has also recently ventured into the EV sector. Shares have declined 9% in the last month. Nonetheless, the stock has gained 6.46% year-to-date, driven by optimism surrounding the company’s entry into the electric vehicle (EV) market in April.
CMB International Bullish on Xiaomi
NG reiterated a Buy rating on the stock based on various factors, such as its global market share expansion, growth in AIoT (artificial intelligence of things), and growing demand for its first EV model.
NG expresses confidence in Xiaomi’s growth prospects in its mobile segment, dismissing concerns over rising memory prices and competitive pressures from Apple’s (NASDAQ:AAPL) new AI iPhone as exaggerated. He expects the company’s gross profit margins to stabilize in the second half of 2024, following a slight decline anticipated in Q2. This turnaround will be mainly due to stabilizing memory prices, the launch of new high-end models, and enhanced cost management efforts.
Additionally, CMB’s analyst is optimistic about the demand for Xiaomi’s SU7 Series EV model. In May, the company delivered 8,646 units for this model, resulting in total deliveries of 15,764 since its launch in April. Despite the ongoing slowdown in the EV market, the company maintained its annual target of delivering at least 100,000 units in 2024. He added that the company’s focused efforts on improving its production capabilities and efficient handling of customer orders will be crucial for meeting this target.
Overall, NG believes the recent drop in Xiaomi’s share price creates an attractive investment opportunity.
Is Xiaomi Stock Good to Buy?
On TipRanks, 1810 stock has been assigned a Strong Buy consensus rating based on nine Buys and one Hold recommendation. The Xiaomi share price target is HK$22.80, which is 38% above the current trading level.
