Company Coverage
Xiaomi Corp (1810 HK): 2Q26 Preview: EV Ramp Lifts Revenue 3.9% qoq But A Broad Margin Squeeze Holds Adjusted Net Profit At Rmb5.9b
HOLD (Maintained)
Current price:
Target price:
Upside:
Previous TP :
HK$28.78
HK$31.50
+9.4%
HK$31.70
Analyst
Highlights
- We expect Xiaomi to register an 11.2% yoy revenue decline in 2Q26, with revenue up 3.9% qoq. Gross margin should drop 1.5ppt yoy and 1.0ppt qoq to 21.0%, and adjusted net profit should fall 45.7% yoy and 3.1% qoq to Rmb5,881m.
- We expect weakness across the board – smartphones impacted by memory costs; IoT moderating from a high base; and EV sales lagging behind estimates. That said, this should be already expected by the market.
- Maintain HOLD; trim target price to HK$31.50.
Analysis
- 2Q26 results preview. We expect Xiaomi Corp’s (Xiaomi) 2Q26 revenue to decline 11.2% yoy but rise 3.9% qoq to Rmb103b, as the EV segment’s sequential ramp more than offsets a smaller smartphone quarter. Blended gross margin is expected to decline 1.5ppt yoy and 1.0ppt qoq to 21.0%, and adjusted net profit is likely to decline 45.7% yoy and 3.1% qoq to Rmb5,881m. Our 2026 adjusted net profit estimate is 17.9%, below Bloomberg consensus, mainly on more conservative IoT and EV margin assumptions.
Highlights
- We expect Xiaomi to register an 11.2% yoy revenue decline in 2Q26, with revenue up 3.9% qoq. Gross margin should drop 1.5ppt yoy and 1.0ppt qoq to 21.0%, and adjusted net profit should fall 45.7% yoy and 3.1% qoq to Rmb5,881m.
- We expect weakness across the board – smartphones impacted by memory costs; IoT moderating from a high base; and EV sales lagging behind estimates. That said, this should be already expected by the market.
- Maintain HOLD; trim target price to HK$31.50.
Analysis
- 2Q26 results preview. We expect Xiaomi Corp’s (Xiaomi) 2Q26 revenue to decline 11.2% yoy but rise 3.9% qoq to Rmb103b, as the EV segment’s sequential ramp more than offsets a smaller smartphone quarter. Blended gross margin is expected to decline 1.5ppt yoy and 1.0ppt qoq to 21.0%, and adjusted net profit is likely to decline 45.7% yoy and 3.1% qoq to Rmb5,881m. Our 2026 adjusted net profit estimate is 17.9%, below Bloomberg consensus, mainly on more conservative IoT and EV margin assumptions.
HOLD (Maintained)
Current price:
Target price:
Upside:
Previous TP :
HK$28.78
HK$31.50
+9.4%
HK$31.70
Analyst
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