Morgan Stanley Xiaomi Corp (1810.HK) Risk Reward Update
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Morgan Stanley updated its risk-reward assessment for Xiaomi Corp (1810.HK), maintaining an Overweight rating with a target price of HKD 30. The report highlights a favorable asymmetrical risk-reward profile, noting the stock currently trades at approximately 18 times 2026 forecasted earnings. The bank identifies multiple growth catalysts across Xiaomi's diversified business segments.
In the smartphone division, global shipments grew 12% year-over-year in 2025, increasing market share to 14.5%. The Internet of Things and lifestyle consumer goods segment also demonstrated robust momentum, with revenue climbing 18%, driven by smart home appliances and wearable devices. Furthermore, the intelligent electric vehicle business, anchored by the SU7 model released in March 2025, is projected to deliver 100,000 units in 2026. Although the EV segment remains in its investment phase, its long-term potential significantly expands the total addressable market.
Morgan Stanley projects 2025 adjusted net profit will reach RMB 22 billion, representing 15% year-over-year growth. Current market pricing implies approximately 25% upside to the bank's target. Key downside risks to monitor include escalating smartphone competition, deeper-than-expected losses in the EV division, and broader geopolitical uncertainties affecting global supply chains and international market expansion.