Yamato: Raise Xiaomi Group (01810) target price to HK$76, roughly in line with second quarter revenue and adjusted net profit expectations.

According to the Zhixun Finance and Economics APP, Daiwa has released a research report stating that Xiaomi Group-W (01810) second-quarter revenue and adjusted profit roughly met market expectations. With the high average selling price of SU7 Ultra and the economies of scale driving force, Xiaomi's second-quarter electric vehicle gross profit margin reached 26.4%. The bank expects the third-quarter electric vehicle gross profit margin to further increase to 28%. This may potentially allow Xiaomi's automotive business to achieve breakeven in a single quarter or month in the second half of the year. Based on the upward revision of the electric vehicle gross profit margin forecast, Xiaomi's earnings per share forecasts for 2025 to 2027 have been raised by 2% to 9%. It reaffirms a "buy" rating and raises the target price from HK$72 to HK$76.