Credit Suisse: Maintain Xiaomi (1810. HK) "Better than Broader Market" rating with a target price of HK$27

Xiaomi Mi 12, Xiaomi Mi 12 Pro and Mi 12X, as well as the MIUI 13 update and The Mi Watch S1, will be available in China on December 31. Management will invest 100 billion yuan in research and development over the next five years to catch up with Apple. The bank maintained its "outperforming the broader market" rating with a price target of HK$27.

Credit Suisse believes that Xiaomi aims to diversify its customer segments and enhance the contribution of high-end customers, although the Xiaomi Mi 12 series has limited hardware upgrades compared to the Xiaomi 11 series, but its MIUI, ecosystem upgrades and user experience improvement are the focus. The bank believes that the penetration rate of Xiaomi mobile phones will increase in 2022, and it is expected that Xiaomi will ship 226 million units next year, up 26% year-on-year. The bank also expects that Xiaomi will continue to focus on improving the average selling price and gross profit margin in the fourth quarter and the first half of next year in the case of chip shortages, shipments and more aggressive in the second half of the year.