G Sachs: Hedge Funds Agree on XIAOMI-W as a Short Selling Target
Hedge Fund Sentiment: Goldman Sachs reports that hedge funds have become bearish on XIAOMI-W (01810.HK), with a significant increase in short positions by 53% over the past week.
Short Selling Data: The short selling amount for XIAOMI-W reached $447.68 million, with a short ratio of 18.549%, indicating a strong consensus among institutional clients to maintain short positions until the upcoming earnings announcement on November 18.
Market Concerns: Factors contributing to the bearish outlook include a lack of catalysts, safety concerns, delays in factory construction, and disappointing performance in the electric vehicle sector despite recent promotions.
Analyst Downgrade: Haitong International has lowered its target price for XIAOMI-W to $57.4, anticipating relatively weak results for the third quarter.
Trade with 70% Backtested Accuracy
Analyst Views on 01810
About the author
Lei Jun: Rising Memory Costs Create Significant Strain on Xiaomi's Mobile Business
Impact of AI Demand on Chip Prices: Lei Jun, founder of XIAOMI, highlighted that the rising demand for AI has led to increased storage chip prices, significantly affecting the mobile business and necessitating price adjustments for consumers.
Previous Discussions on Price Hikes: This marks the third time Lei has addressed the issue of rising chip prices, acknowledging that the cost increases have forced the company to adjust product prices, particularly for the Redmi K90 series.
<Midday Update> HSI Ends Midday at 25,462, Gaining 212 Points; HSTI Remains Unchanged at 4,829; SINO BIOPHARM Rises More Than 5%; KINETIC DEV Reaches New Peaks
Market Performance: The Hang Seng Index (HSI) rose by 212 points (0.8%) to 25,462, while the Hang Seng China Enterprises Index (HSCEI) gained 20 points (0.2%) to 8,504.
Active Heavyweights: Notable movements included Meituan down 1.7%, Xiaomi up 1.6%, HKEX up 1.4%, Alibaba down 1.2%, and Tencent up 0.5%.
Top Gainers: Significant gainers included Sino Biopharm (+5.9%), AIA (+4.0%), Wharf REIC (+3.6%), and HSBC Holdings (+3.1%).
Notable Declines: WestChinaCement saw a sharp decline of 23.8%, while IFBH experienced a substantial increase of 24.3%.
HSI Rises by 334 Points; Commodities Steady; GEELY AUTO and NIO-SW Surge
Market Opening Performance: The HSI opened 334 points higher at 25,583, with the HSCEI and HSTECH also showing gains of 1.1% and 1.6%, respectively.
Commodity Stocks Movement: Commodity stocks like SD GOLD and ZHAOJIN MINING saw slight declines, while ZIJIN MINING and CHINAHONGQIAO experienced notable increases of 2.4% and 4.1%.
Tech Sector Trends: Major tech stocks such as TENCENT and KUAISHOU-W showed modest gains, while BABA-W and NTES-S experienced slight declines.
Carmakers' Performance: Carmakers like NIO-SW and GEELY AUTO opened significantly higher, with NIO-SW rising by 5.8%, while BYD COMPANY and XIAOMI-W also saw positive movement.
President Lu Weibing: Xiaomi Aims to Release a New Smartphone Processor Chip Annually
Xiaomi's Ambitious Plans: Xiaomi aims to release a new smartphone processor chip annually, indicating its commitment to advancing in cutting-edge technology, as stated by Lu Weibing, President of the Mobile Division.
AI Assistant Launch: The company is set to introduce its own AI assistant for international markets, focusing on cross-platform integration for smartphones and vehicles.
Technological Advancements: Last year, Xiaomi launched the XRing O1, a system-on-chip utilizing advanced 3-nm technology, highlighting its capability to independently design SoCs, a rarity among smartphone manufacturers.
Market Performance: Xiaomi's stock (01810.HK) saw a 3.062% increase, with significant short selling activity reported at $1.16 billion and a ratio of 18.799%.
BABA-W Sees HKD3.5B Net Outflow in Southbound Trading
Southbound Trading Inflows and Outflows: TENCENT (00700.HK) saw a significant net inflow of HKD848.9 million, while BABA-W (09988.HK) experienced a notable outflow of HKD3.5 billion during Southbound Trading.
Short Selling Activity: TENCENT had a short selling amount of $2.44 billion with a ratio of 16.025%, while BABA-W had a higher short selling of $2.98 billion and a ratio of 14.852%.
Most Active Stocks: In the Shanghai-Hong Kong Stock Connect, TENCENT was the most active stock with the highest net inflow, while BABA-W led in net outflow. Similarly, in the Shenzhen-Hong Kong Stock Connect, CSOP HS TECH (03033.HK) had the highest net inflow.
Overall Trading Summary: The total Southbound Trading net outflow was HKD0, accounting for 39.01% of the total transaction amount of HKD142.13 billion.
Jefferies Reduces XIAOMI-W (01810.HK) Price Target by 30% to $30.45 and Lowers Profit Projections Due to Excessive Consensus and Rising Memory Expenses
Memory Cost Surge: Jefferies reports that memory costs for smartphone OEMs are expected to increase by 3.6x this year, leading to a projected 55% drop in XIAOMI-W's smartphone volumes, despite a 31% rise in average selling price.
Impact on Gross Margin: The forecast indicates a significant decline in XIAOMI-W's smartphone gross margin, expected to fall by 7 percentage points to a historic low of 4%.
Revenue and EBIT Forecasts: Jefferies anticipates that XIAOMI-W's revenue and EBIT for 2026 will be 16% and 34% lower than those of market peers, respectively, due to lower gross margins in both smartphones and auto segments.
Target Price Adjustment: The broker has reduced its target price for XIAOMI-W by nearly 30% to $30.45, maintaining a "Hold" rating, suggesting that market expectations for the company are overly optimistic amid ongoing risks from rising memory costs.
Lei Jun: Rising Memory Costs Create Significant Strain on Xiaomi's Mobile Business
Impact of AI Demand on Chip Prices: Lei Jun, founder of XIAOMI, highlighted that the rising demand for AI has led to increased storage chip prices, significantly affecting the mobile business and necessitating price adjustments for consumers.
Previous Discussions on Price Hikes: This marks the third time Lei has addressed the issue of rising chip prices, acknowledging that the cost increases have forced the company to adjust product prices, particularly for the Redmi K90 series.
<Midday Update> HSI Ends Midday at 25,462, Gaining 212 Points; HSTI Remains Unchanged at 4,829; SINO BIOPHARM Rises More Than 5%; KINETIC DEV Reaches New Peaks
Market Performance: The Hang Seng Index (HSI) rose by 212 points (0.8%) to 25,462, while the Hang Seng China Enterprises Index (HSCEI) gained 20 points (0.2%) to 8,504.
Active Heavyweights: Notable movements included Meituan down 1.7%, Xiaomi up 1.6%, HKEX up 1.4%, Alibaba down 1.2%, and Tencent up 0.5%.
Top Gainers: Significant gainers included Sino Biopharm (+5.9%), AIA (+4.0%), Wharf REIC (+3.6%), and HSBC Holdings (+3.1%).
Notable Declines: WestChinaCement saw a sharp decline of 23.8%, while IFBH experienced a substantial increase of 24.3%.
HSI Rises by 334 Points; Commodities Steady; GEELY AUTO and NIO-SW Surge
Market Opening Performance: The HSI opened 334 points higher at 25,583, with the HSCEI and HSTECH also showing gains of 1.1% and 1.6%, respectively.
Commodity Stocks Movement: Commodity stocks like SD GOLD and ZHAOJIN MINING saw slight declines, while ZIJIN MINING and CHINAHONGQIAO experienced notable increases of 2.4% and 4.1%.
Tech Sector Trends: Major tech stocks such as TENCENT and KUAISHOU-W showed modest gains, while BABA-W and NTES-S experienced slight declines.
Carmakers' Performance: Carmakers like NIO-SW and GEELY AUTO opened significantly higher, with NIO-SW rising by 5.8%, while BYD COMPANY and XIAOMI-W also saw positive movement.
President Lu Weibing: Xiaomi Aims to Release a New Smartphone Processor Chip Annually
Xiaomi's Ambitious Plans: Xiaomi aims to release a new smartphone processor chip annually, indicating its commitment to advancing in cutting-edge technology, as stated by Lu Weibing, President of the Mobile Division.
AI Assistant Launch: The company is set to introduce its own AI assistant for international markets, focusing on cross-platform integration for smartphones and vehicles.
Technological Advancements: Last year, Xiaomi launched the XRing O1, a system-on-chip utilizing advanced 3-nm technology, highlighting its capability to independently design SoCs, a rarity among smartphone manufacturers.
Market Performance: Xiaomi's stock (01810.HK) saw a 3.062% increase, with significant short selling activity reported at $1.16 billion and a ratio of 18.799%.
BABA-W Sees HKD3.5B Net Outflow in Southbound Trading
Southbound Trading Inflows and Outflows: TENCENT (00700.HK) saw a significant net inflow of HKD848.9 million, while BABA-W (09988.HK) experienced a notable outflow of HKD3.5 billion during Southbound Trading.
Short Selling Activity: TENCENT had a short selling amount of $2.44 billion with a ratio of 16.025%, while BABA-W had a higher short selling of $2.98 billion and a ratio of 14.852%.
Most Active Stocks: In the Shanghai-Hong Kong Stock Connect, TENCENT was the most active stock with the highest net inflow, while BABA-W led in net outflow. Similarly, in the Shenzhen-Hong Kong Stock Connect, CSOP HS TECH (03033.HK) had the highest net inflow.
Overall Trading Summary: The total Southbound Trading net outflow was HKD0, accounting for 39.01% of the total transaction amount of HKD142.13 billion.
Jefferies Reduces XIAOMI-W (01810.HK) Price Target by 30% to $30.45 and Lowers Profit Projections Due to Excessive Consensus and Rising Memory Expenses
Memory Cost Surge: Jefferies reports that memory costs for smartphone OEMs are expected to increase by 3.6x this year, leading to a projected 55% drop in XIAOMI-W's smartphone volumes, despite a 31% rise in average selling price.
Impact on Gross Margin: The forecast indicates a significant decline in XIAOMI-W's smartphone gross margin, expected to fall by 7 percentage points to a historic low of 4%.
Revenue and EBIT Forecasts: Jefferies anticipates that XIAOMI-W's revenue and EBIT for 2026 will be 16% and 34% lower than those of market peers, respectively, due to lower gross margins in both smartphones and auto segments.
Target Price Adjustment: The broker has reduced its target price for XIAOMI-W by nearly 30% to $30.45, maintaining a "Hold" rating, suggesting that market expectations for the company are overly optimistic amid ongoing risks from rising memory costs.
