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<Research>M Stanley Projects Surging Memory Costs to Keep Eroding XIAOMI-W Smartphone Margin; Rating Overweight Kept
Recommend 26 Positive 36 Negative 27 |
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XIAOMI-W (01810.HK) experienced an erosion in smartphone margin in 4Q25 given surging memory costs, a trend expected to persist until 2026, Morgan Stanley said in a research report. The rating remained Overweight with a target price of HKD45. Xiaomi's adjusted net profit for 4Q25 came in at RMB6.3 billion, down 24% YoY and 44% QoQ. Although revenue notched a record high, the decline in margin led to a QoQ drop in earnings. Specifically, smartphone revenue fell 14% YoY to RMB44.3 billion, while EV revenue spiked 123% YoY, and AIoT revenue shed 20% YoY. The increase in memory costs in 1Q26 was greater than expected, and Xiaomi's smartphone margin was expected to remain under pressure in the coming quarters. On the EV side, Xiaomi successfully launched the new SU7 on March 19, with new order performance and customer feedback being key drivers for the stock price. AASTOCKS Financial News Website: www.aastocks.com |
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