The analyst rating from Goldman Sachs for Xiaomi (01810.HK) is maintained as a "Buy," despite challenges the company is facing. The reasons for this rating include:
1. Challenges from Upstream Costs: Xiaomi is experiencing difficulties due to rising upstream costs in the consumer electronics and automotive sectors.
2. Removal of Subsidies: The gradual removal of national subsidies and incentives for New Energy Vehicles (NEVs) is impacting Xiaomi's profitability and valuation.
3. Adjusted Revenue and Profit Forecasts: Goldman Sachs has lowered its revenue forecasts for 2025-27 across various segments, including smartphones and smart EVs, and has also reduced adjusted net profit forecasts significantly.
4. Attractive Risk-Reward Profile: Despite the challenges, Goldman Sachs believes the risk-reward remains attractive on a 12-month basis, with a target price cut from HKD 47.5 to HKD 41, indicating a potential upside of 23%.
5. Future Catalysts: Upcoming events, such as the announcement of 4Q25 results, the launch of new models, and updates on Xiaomi's technology, are seen as potential catalysts for the stock.
Overall, while there are significant headwinds, the analysts see potential for recovery and growth, justifying the "Buy" rating.
