China's Xiaomi Group Plummets Over 5% to New Low Since June 13!
On August 7, China's Xiaomi Group-W (1810.HK) fell over 5% to a new low since June 13. As of the time of writing, Xiaomi Group dropped 4.91% to HK$51.35.
The market is awaiting Xiaomi's Q2 performance report, to be released on August 19. According to Daiwa Securities, it is expected that Xiaomi Group's Q2 smartphone shipments will be slightly lower than previously forecasted, mainly due to a 25% year-on-year decline in the Indian market. Although Xiaomi's global market share reached a historical high of 15% in Q2 2025, this came at the cost of declining profit margins. Daiwa Securities predicts that Xiaomi Group's total revenue for Q2 2025 will be approximately CNY1126 billion, slightly lower than market expectations; and adjusted net profit will be around CNY102 billion, meeting market expectations. Additionally, Daiwa Securities lowered its forecast for IoT revenue in the second half of 2025 to reflect adjustments to government subsidies.
As a result of the revised estimate of smartphone gross margin, Daiwa Securities downgraded Xiaomi's earnings per share (EPS) for 2025-2027 by 2-7%, and lowered its target price from HK$78 to HK$72 (based on an average price-to-earnings ratio of 36 times for 2025-2026, previously 38 times), maintaining a "buy" rating. The main risks include macroeconomic headwinds and slow progress in electric vehicle production capacity.