Goldman Sachs forecast Xiaomi-W's 2Q adjusted net profit will fall 50% year-on-year to RMB5.4 billion, with revenue growth of just 1%. The broker maintained its Buy rating and HKD40 target price, citing upcoming REEV SUV and AIOS launches as future drivers.
Goldman Sachs forecast Xiaomi-W's adjusted net profit will slump 50% year-on-year to RMB5.4 billion in the second quarter, weighing on the stock.
"Xiaomi's 2Q results may be relatively weak, weighing on short-term share price," Goldman Sachs said in a research report dated June 11. The broker maintained its Buy rating on the Hong Kong-listed stock with a target price of HKD40, implying significant upside from current levels.
Revenue is projected to grow just 1% year-on-year, Goldman said. Excluding newer businesses such as electric vehicles and artificial intelligence, revenue may decline 9% year-on-year, showing pressure on Xiaomi's core smartphone and IoT hardware segments. Adjusted net profit is also expected to sink 11% quarter-on-quarter.
The cautious near-term outlook comes as Xiaomi shares already face selling pressure. The stock fell 2.28% on June 11, with short selling accounting for 20.5% of turnover, according to exchange data. The decline puts Xiaomi among the most heavily shorted names on the Hong Kong exchange that session, reflecting bearish sentiment that may already be priced in.
The forecast shows Goldman expects Xiaomi's core businesses to remain under pressure before new product cycles begin. The REEV SUV launch in about three months and the AIOS release expected in the third quarter could serve as key events, the broker said. Xiaomi's push into EVs pits it against established players such as BYD and Nio in China's competitive electric vehicle market, while its AI ambitions align with a broader industry push into on-device artificial intelligence.
This article is for informational purposes only and does not constitute investment advice.
