AMTD Research | Xiaomi (1810 HK): Strong smartphone momentum driving more sustainable growth ahead, reiterate Buy on recent market correction

According to Canalys, Xiaomi achieved its record high of smartphone shipment in the first quarter of 2021. Its global smartphone shipment grew strongly by 62% YoY to 49mn units in Q1, ranking third for the second quarter in a row; in particular, the shipment jumped by 85% YoY in Europe with a market share of 23% in Q1, surpassing Apple and ranking top 2 for the first time. As the anchor product in Xiaomi’s ecosystem, the strong smartphone momentum will boost more sustainable growth of its AIoT products and internet services ahead, in our view. On the other hand, with the backdrop of the broader tech sector’s valuation correction triggered by inflation concerns, we see a great buying opportunity of Xiaomi for LT investors. We reiterate Buy on Xiaomi with a PT of HK$35.0 on 45x FY21E P/E, factoring in Xiaomi’s future ambitions and its long-term commitment.

• Smartphone: gaining market share with continuous innovation, driven by
  • Enriched product matrix
  • Cutting-edge technologies
  • Acceleration of offline channels
• AIoT ecosystem: launch of smart home appliances and EV business