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S&P Lifts XIAOMI-W Rating Outlook to Positive; Smartphone Biz Impact Brief
Recommend 13 Positive 26 Negative 3 |
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S&P Global Ratings raised XIAOMI-W (01810.HK) rating outlook from Stable to Positive, reflecting its view that the company's business portfolio has become more diversified, following considerable growth in its IoT segment. This reduced reliance on smartphone sales. Separately, the company's electric vehicle (EV) business will continue to expand without considerably dragging on profitability or cash flow. Regarding the electric vehicle (EV) business, S&P believed that the delayed production of the second EV factory may affect Xiaomi's capacity expansion and new model releases, with the company's EV shipment growth expected to slow to 500,000 units by 2026. The company may also face profit pressure due to intense competition and the government's "anti-involution" policy controlling domestic automotive capacity, which could impact the expansion of newer EV manufacturers like Xiaomi. However, the agency expected the EV business of Xiaomi to generate only minor losses next year. In the smartphone business, S&P believed that Xiaomi's increasing share of high-end smartphone sales, rising contribution from internet services, and significant position in the consumer electronics sector will enhance its bargaining power with memory manufacturers to ensure sufficient supply, allowing Xiaomi to better cope with memory supply tightness and price surges, especially in the fourth quarter of 2025 and 2026. AASTOCKS Financial News Website: www.aastocks.com |
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