Morgan Stanley: Price increase of XIAOMI-W (01810) smartphones helps to transfer memory cost pressure, rated as "hold"

Morgan Stanley released a research report stating that, in the face of a significant increase in memory costs, companies with good product structures and higher average selling prices are believed to be better able to pass on cost pressures. After comparing the average selling price trends of various brands since 2016, the bank found that the average selling price growth of XIAOMI-W (01810) among mainland companies using the Android system was the most significant, and it now has a target price of HK$62 and a "buy" rating. Considering that in the third quarter of this year, Xiaomi's average selling price in the mainland market has surpassed OPPO, vivo, and Honor, the bank believes that the company will be more effective in passing on costs next year, and Xiaomi's continued high-end smartphone strategy may also provide additional support. The bank also expects Xiaomi to focus more on average selling prices and profit margins in overseas markets, rather than market share, which will help it cope with rising cost pressures.