Apple’s declining sales in China is an opportunity for another local Android smartphone maker to win over customers and investors.
Xiaomi has added about $20 billion in market capitalization since June’s lows, driven by excitement over its latest devices and expansion into businesses such as electric vehicles. Hong Kong-listed stocks rose more than 60% during the period, making it the best performer on the Hang Seng Tech Index.
China’s Android maker is making profits even as Apple’s domestic sales are declining, even as there are signs that Asia’s largest smartphone market is starting to bottom out after years of stagnation.
Xiaomi’s 14 series has received more than 1 million orders since its launch in late October. This is the second big hit for a Chinese smartphone in recent months, following the success of Huawei’s Mate 60 Pro. Huawei is privately held, but investors are eyeing shares in its suppliers.
Xiaomi’s stock price has soared on strong orders for the 14 series, but some analysts say the stock is poised to rise further. It is thought that EVs and so-called “artificial intelligence of things” could be further catalysts.
“Upturning growth in smartphones and AIoT, and early expectations for Xiaomi’s push into electric vehicles, are likely to drive the next six months,” JPMorgan Chase analyst Gokul Hariharan said in a note last week. “We believe there are trade opportunities in the future,” he said, raising his expectations. Stock becomes overweight.
Other Wall Street firms, including Morgan Stanley and Citigroup, are citing signs that China’s smartphone slump is over and could recover into next year. Huawei’s surprisingly strong comeback is helping to whet Chinese consumers’ appetite for innovative local products.
“With the launch of new products featuring unique camera capabilities and satellite calling, it is clear that Huawei is rapidly gaining ground,” said Jiang Xi Cortesi, fund manager at GAM Investment Management. ” he said. “iPhone sales are currently losing momentum in China as many consumers do not see much improvement in the new iPhones.”
In addition to advanced cameras, the Xiaomi 14 series also features the latest Qualcomm Inc. processor and an innovative operating system called HyperOS designed to connect smartphones to cars, consumer electronics, and other AIoT devices. It has been.
Huawei is likely to gain the most market share among Chinese brands in the current smartphone cycle, but Xiaomi’s technology is likely to gain the most market share among Chinese brands in the current smartphone cycle, according to Bloomberg Intelligence analyst Steven Tseng. It should help fend off rivals. “Furthermore, potential growth opportunities in overseas markets will be advantageous for Xiaomi, which has the largest overseas presence among Chinese mobile phone vendors,” he said.
Technical analysis shows that Xiaomi’s stock price has increased since the launch of the 14 series, pushing it into overbought territory. However, market participants say that future triggers such as Singles’ Day and the company’s third-quarter results announced on November 20 could cause the stock price to rise further.
“Xiaomi is the only top-5 smartphone brand to increase both quarter-on-quarter and year-over-year shipments in Q3 2023 as it strengthens its position in key markets such as China and India,” Counterpoint Research said. is written in a memo.
Goldman Sachs Group analyst Timothy Moe said in a note that the company hit a “historic high” in Singles’ Day gross merchandise value, buoyed by the strong performance of the 14 Series. .
Like Apple and Huawei, Xiaomi has its own ecosystem of suppliers, so there are other ways to exchange this idea as well. Among Xiaomi’s major parts makers, mainland-listed Will Semiconductor and OFILM Group have both risen in the past month.