Insights into Xiaomi’s Growth Strategies
- Internet of Things (IoT): Xiaomi continues to expand its AIoT business, which is considered a key growth driver. The integration of artificial intelligence with connected devices is aimed at boosting revenue growth and contributing to stronger profit development.
- Electric Vehicles (EV): Entering the EV market is seen as a significant strategic expansion. This opens new revenue sources and diversifies Xiaomi’s business model beyond traditional electronic products.
Impact on Margins
The focus on IoT and EV segments is expected to have a positive impact on margins. The HSBC analysis emphasizes that these areas not only offer growth potential but can also contribute to profitability improvement through economies of scale and cost efficiency in design and marketing.
Further Evaluations
Alongside HSBC, other analysts such as Jefferies have also raised their target prices for Xiaomi, reinforcing the positive outlook. Jefferies particularly highlights Xiaomi’s ability to gain market share in the AIoT sector, supported by strong revenue growth of over 35% in the last twelve months. The mid-term revenue potential alone in the household appliances segment is estimated at over 100 billion RMB.
In summary, HSBC’s analysis reflects a bullish stance on Xiaomi with a clear focus on promising technologies like IoT and EV, as well as their positive influence on margins and the long-term growth potential of the stock.