Update shared on 25 Nov 2025
Fair value Decreased 8.02%Analysts have lowered their price target for Xiaomi, reducing the estimate from $43 to $40. They cited expectations of slower growth in internet of things sales and compressed smartphone margins, despite ongoing optimism about the company’s positioning in China's competitive tech landscape.
Analyst Commentary
Following the latest research updates, analysts have provided both optimistic and cautious perspectives on Xiaomi’s prospects, highlighting factors influencing the company's valuation and execution going forward.
Bullish Takeaways
- The company maintains a strong positioning within China’s competitive tech sector, supported by its electronics self-reliance and diversified product ecosystem.
- Xiaomi is considered a leading contender among Chinese electric vehicle specialists. Some believe the company is better positioned than global peers.
- Recent initiation with an Overweight rating and a price target above current levels suggests confidence in the firm’s long-term growth prospects.
- Ongoing optimism centers on Xiaomi’s ability to weather policy risks and intense market competition, especially due to its innovation capabilities.
Bearish Takeaways
- Pricing pressures and higher component costs, particularly DRAM, are expected to compress smartphone margins in the coming quarters.
- Growth in the internet of things segment is projected to slow as government trade-in subsidies begin to phase out. This could create a challenging comparison period.
- Although the overall market sentiment is positive, there are concerns about how quickly Xiaomi can sustain profitable execution in a rapidly evolving marketplace.
What's in the News
- Xiaomi has launched a customization service for its SU7 Ultra electric sedans in China, allowing buyers to add unique features and custom design elements. This new service targets consumers who might otherwise consider brands like Porsche. (Bloomberg)
- The company is reportedly exploring partnerships to integrate "agentic" AI technology from startup AGI, Inc. The goal is to equip devices with advanced AI assistants that go beyond current offerings such as Siri and Google Assistant. (Forbes)
- BASF Coatings is expanding its collaboration with Xiaomi and has committed to co-develop 100 new car paint colors over the next three years to drive innovation and personalization in automotive design.
- Xiaomi has commenced a significant share repurchase program with authorization to buy back up to 10% of its issued share capital, aiming to enhance net asset value and earnings per share.
- The company’s Board Meeting on November 18, 2025, will review unaudited consolidated results for recent quarters.
Valuation Changes
- Fair Value Estimate has decreased from HK$62.94 to HK$57.89, reflecting a reduced outlook according to the latest analysis.
- Discount Rate has edged down slightly from 8.54% to 8.52%, indicating only a minor adjustment in risk assumptions.
- Revenue Growth projections have fallen from 20.49% to 19.11%, signaling somewhat more moderate expectations for top-line expansion.
- Net Profit Margin estimate has declined marginally from 9.34% to 9.26%.
- Future Price/Earnings (P/E) Ratio has been lowered from 30.75x to 27.37x, suggesting a shift toward more conservative valuation multiples.
Disclaimer
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