1810: Premium Auto Customization Will Drive Future Upside In High End Segment

Analysts have nudged their consolidated price target on Xiaomi slightly lower by about $3 to approximately $40 per share, reflecting expectations for slower internet of things growth and some margin pressure from higher component costs, partially offset by optimism around the company’s positioning in China’s electric vehicle and electronics markets.

Analyst Commentary

Recent Street commentary highlights a balanced mix of enthusiasm and caution around Xiaomi, with valuation underpinned by its growing presence in electric vehicles and core electronics, but tempered by near term profitability risks.

Bullish Takeaways

• Bullish analysts highlight Xiaomi as a top pick among Chinese electric vehicle specialists, viewing its electronics expertise and supply chain integration as structural advantages that can support above peer growth.
• Favorable electronics self reliance is seen as a key strategic asset that can help Xiaomi manage costs, protect margins over the cycle, and justify a valuation premium versus less vertically integrated competitors.
• Coverage initiations with Overweight ratings and high target prices signal confidence that Xiaomi can execute on its multi year expansion strategy across EVs and smart devices, supporting sustained revenue and earnings growth.
• Analysts see room for upside if Xiaomi successfully leverages its large user base and ecosystem to cross sell EV and internet of things products, improving monetization per customer and long term return on capital.

Bearish Takeaways

• Bearish analysts flag slowing internet of things growth as government trade in subsidies roll off, which could weigh on near term top line momentum and limit multiple expansion.
• Rising DRAM and component costs are expected to pressure smartphone margins, raising execution risk around profitability targets and potentially capping earnings revisions in the coming quarters.
• China’s auto market is characterized by cutthroat competition and elevated policy risk, which could compress returns on Xiaomi’s EV investments and introduce volatility to future cash flows.
• The modest trimming of price targets suggests concerns that cyclical headwinds and regulatory uncertainty may delay realization of the more optimistic long term valuation scenarios.

What's in the News

• Xiaomi is among major device makers exploring AGI, Inc's agentic AI technology, which aims to power more capable device based assistants and signals potential future integration of advanced AI across Xiaomi's hardware ecosystem (Forbes).
• Xiaomi has launched a high end customization service for its 529,900 yuan SU7 Ultra electric sedan in China, targeting affluent buyers who might otherwise choose bespoke European luxury brands such as Porsche (Bloomberg).
• BASF Coatings and Xiaomi are expanding their collaboration to co develop 100 automotive paint colors over the next three years, enhancing personalization and design differentiation for Xiaomi's EV lineup.
• Xiaomi has commenced a large scale share repurchase program authorized to buy back up to 10% of its issued share capital, a move expected to support earnings per share and net asset value.
• The board has scheduled a meeting on November 18, 2025 to review Xiaomi's unaudited consolidated results for the third quarter and first nine months of 2025.

Valuation Changes

• Fair Value Estimate has risen slightly from HK$57.89 to HK$58.00 per share, reflecting a marginally more optimistic long term outlook.
• Discount Rate has edged down modestly from 8.52% to 8.52% (rounded), implying a slightly lower perceived risk profile in the updated model.
• Revenue Growth has ticked down slightly from 19.11% to 19.09%, signaling a minor tempering of top line expectations.
• Net Profit Margin has eased marginally from 9.26% to 9.25%, indicating a small increase in anticipated cost or pricing pressure.
• Future P/E multiple has slipped slightly from 27.37x to 27.32x, pointing to a modestly more conservative view on Xiaomi’s long term earnings multiple.