Analysts at Morgan Stanley said in a note Wednesday that they believe Xiaomi’s investor day will boost confidence in both the company’s smartphone and electric vehicle businesses.
The investment bank notes that electric vehicle volume and margin guidance are higher than its estimates, as well as the analyst consensus.
“[The] non-EV business is aiming to achieve double-digit revenue growth, which could largely offset smartphone margin pressure,” highlights Morgan Stanley.
With the company’s non-electric vehicle revenue set to exceed Rmb300bn, the investment bank believes the company is positioned to offset margin pressure with strong top-line growth.
Furthermore, within EVs, Morgan Stanley said the company guided a positive gross margin range of 5-10% in 2024, implying stronger shipments will not incur higher losses but could instead make a positive earnings contribution.
For smartphones, the bank stated that Xiaomi is targeting smartphone shipment growth of 15 million to 20 million units in 2024, which would support double-digit revenue growth.
