Shares of the Hong Kong-listed Xiaomi Corporation (HK:1810) rallied 8% as of writing after the company achieved robust revenue growth in Q2, surpassing estimates. The company reported a 32% year-over-year revenue increase to ¥88.9 billion in Q2, exceeding LSEG analysts’ estimate of ¥85.8 billion. Meanwhile, second-quarter profits increased by 38.3% to ¥5.1 billion in 2024 as compared to Q2 2023.
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Xiaomi is a manufacturing company focused on consumer electronics and smart devices. The company has recently expanded into the EV (electric vehicle) sector.
Xiaomi’s Segment Details
In terms of segments, Xiaomi reported revenue of ¥6.4 billion from its EV division, with a net loss of ¥1.8 billion. However, the company reported a gross profit margin of 15.4%, attributing it to better-than-expected delivery figures.
During the quarter, Xiaomi delivered 27,307 units of the SU7, its first model in the EV segment. The company expects to reach its goal of 100,000 cumulative SU7 deliveries by November, ahead of schedule. It is now aiming to hit a new target of 120,000 deliveries for the full year of 2024.
In the Smartphone segment, the company reported a 28% increase in handset shipments to 42.2 million units in Q2. Smartphone revenue also grew 27.1% year-on-year to ¥46.5 billion, driven by the global smartphone market’s recovery since late last year.
Analysts’ Reactions
Following Q2 results, analyst Kyna Wong from Citi reiterated her Buy rating on Xiaomi stock. Wong raised her price target on the stock from HK$22.4 to HK$22.7, predicting a growth rate of 28.4%.
Wong is optimistic about the company’s EV division margins and its effective management of operational costs. She anticipates further improvements in EV gross margins in the second half of 2024.
Similarly, DBS confirmed its Buy rating on the stock and predicts an upside of 30%.
Is Xiaomi Stock a Good Buy?
On TipRanks, 1810 stock has been assigned a Strong Buy rating based on five Buy and one Hold recommendations. The Xiaomi share price target is HK$24.47, which is 40% above the current trading level.
