Citigroup: Slightly lowers Xiaomi target price and maintains buy rating.

Citigroup has lowered Xiaomi's target price from HK$42 to HK$40, citing that its operating profit is lower than expected due to higher-than-expected operating expenses. Analysts, including Kyna Wong, stated in a report that Xiaomi's operating profit for the fourth quarter of 2025 dropped by 45% year-on-year to 3.191 billion RMB, which was lower than Citigroup's expected 25% and Bloomberg's consensus of 49%. The gross profit margin was 20.8%, also lower than expected. However, adjusted net profit still exceeded expectations, mainly driven by non-operating items. Xiaomi's stock price may face pressure in the short term, with potential catalysts in the near future being the release of new products in the spring. Citigroup maintains a buy rating and is optimistic about its artificial intelligence, Internet of Things, and electric vehicle businesses, especially the overseas market expansion starting in 2027.