Broker: UOB Kay Hian
Date of Report: 27 June 2025

Xiaomi’s Ambitious Expansion: YU7 SUV, AI Glasses, and New Devices Drive Strong Growth Outlook

Xiaomi’s Latest Launches Fuel Investor Optimism

Xiaomi Corporation has captured market attention with a dynamic wave of product launches, including the highly anticipated YU7 SUV, innovative AI Glasses, the Mix Flip 2 smartphone, Redmi K80 Ultra, and a suite of new IoT products. UOB Kay Hian maintains a BUY rating on Xiaomi, with a target price of HK\$69.90—representing a 22.8% upside from current levels. This comprehensive update analyzes the financials, product line-up, and strategic implications of Xiaomi’s ambitious expansion across automotive, AI, and consumer electronics.

Stock Overview and Performance

• Share Price: HK\$56.90
• Target Price: HK\$69.90 (22.8% upside)
• Market Cap: HK\$1,419,563 million (US\$208,759 million)
• 52-Week Range: HK\$59.45 / HK\$15.36
• Major Shareholders: Smart Mobile Holdings Ltd (8.56%), Lin Bin (2.09%)
• Price Performance: 1M +10.9%, 3M +5.5%, 6M +73.7%, 1Y +219.3%, YTD +64.9%

Headline Launch: Xiaomi YU7 SUV

Xiaomi officially launched the YU7 SUV, targeting the mid-large, luxury family vehicle market segment. The YU7 is available in three variants:

• Standard: Rmb253,500
• Pro: Rmb279,900
• Max: Rmb329,900

Key highlights:

• Nine exterior colors, four interior color options
• LiDAR sensors and NVIDIA Drive AGX Thor platform on all models
• Free upgrades for orders before 31 July 2025 (Nappa leather seats, “zero-gravity” seats, electric front trunk, HEPA air purification, valued at Rmb29,000)
• Lifetime access to Xiaomi’s HAD self-driving system (worth Rmb26,000)
• Special carbon fibre exterior components for Max variant

Initial demand is exceptionally strong, with 289,000 orders in the first hour (including non-confirmed and refundable orders). For comparison, the SU7 received approximately 75,000 confirmed orders in its first month and around 88,898 in the first 24 hours.

YU7 vs. Competitors – Key Specifications Table

* Li L6 is an EREV

Market Demand and Positioning

– The YU7 targets the family-use luxury SUV market, contrasting with the SU7’s driver-focused, personal enjoyment positioning. – Xiaomi expects minimal cannibalization between the YU7 and SU7 due to distinctly different target audiences. – Pre-launch interest in the YU7 was reportedly three times higher than that of the SU7.

Breakthrough in Wearables: Xiaomi AI Glasses

Xiaomi’s new AI Glasses are designed to rival Meta’s Ray-Ban offering, focusing on lightweight comfort and enhanced battery life:

• Weight: 40g (vs. Meta Ray-Ban’s 49g)
• Battery life: 8.6 hours (vs. 4 hours for Ray-Ban)
• Electrochromic function on higher-end SKUs (not available on Ray-Ban)
• No waveguide display, keeping costs lower
• Three SKUs: Standard (Rmb1,999), Black/White Electrochromic (Rmb2,699), Colored Electrochromic (Rmb2,999)

Early demand is strong, with the two electrochromic versions selling out quickly online. Xiaomi expects to sell about 300,000 units in the first year, a modest contribution (about 1%) to overall revenue.

AI Glasses Competitive Comparison Table

New Smartphones: Mix Flip 2 and Redmi K80 Ultra

Xiaomi Mix Flip 2: – Enhanced hinge structure while maintaining a thin (7.57mm) and lightweight (199g) design – 4.01” OLED cover screen (3,200 nits peak brightness) and 6.86” main ultra-tough glass display – Qualcomm Snapdragon 8 Elite processor – Dual 50MP cameras (wide and ultrawide) – Three configurations: 12GB/256GB (Rmb5,999), 16GB/1TB (Rmb7,299) – Entry SKU eligible for China’s trade-in subsidies (post-subsidy price ~Rmb5,499)
Redmi K80 Ultra:
Targets younger, gaming-focused users
MediaTek Dimensity 9400+ (TSMC 3nm) replaces Snapdragon 8 Gen 3
Larger device, slightly lower display resolution
Upgraded 7410mAh battery (from 6550mAh in K80)
Configurations: 12GB/256GB (Rmb2,599), up to 16GB/1TB (Rmb3,799)
Priced Rmb100-200 higher than the original K80, but discounted via national subsidy

Key Specs Comparison Table

Tablet Innovations: Xiaomi Pad 7S Pro and Redmi K Pad

– Xiaomi Pad 7S Pro: 12.5” 3:2 display, in-house XRING O1 SoC, positioned as a lighter alternative to the Pad 7 Ultra, pricing from Rmb3,299 (8GB/256GB) to Rmb4,499 (16GB/1TB). Trade-in subsidies lower the effective entry price. – Redmi K Pad: Redmi’s first small-sized tablet, benchmarks the iPad Mini, powered by Dimensity 9400+, enhanced for gaming (advanced cooling, dual x-axis haptics), priced Rmb2,799 (8GB/256GB) to Rmb4,199 (16GB/1TB).

IoT and Smart Home Ecosystem Expansion

Xiaomi continues to deepen its IoT ecosystem with new launches:

• Smart Band 10
• Watch S4 (41mm)
• Open Ear Earbuds Pro
• Upgraded hair dryers, vacuums, and air conditioners

Financial Highlights and Valuation

Key Financials (Rmbm)

Other highlights:

• Net cash position remains robust, with net debt/(cash) to equity at -8.6% in 2025F and -35.2% in 2027F
• Revenue growth forecast: 25.2% (2025F), 14.0% (2026F), 9.9% (2027F)

Valuation and Recommendation

UOB Kay Hian maintains a BUY rating and target price of HK\$69.90 for Xiaomi. The valuation is based on:

• Core business: HK\$52.10, derived from 30.0x 2025F PE (1SD above five-year historical mean)
• EV business: HK\$17.80, based on a 10-year DCF with 9.6% WACC, implying 5.1x 2025F P/S

Conclusion: Xiaomi’s Multi-Sector Strengths Drive Robust Outlook

Xiaomi’s latest product launches across electric vehicles, AI wearables, smartphones, tablets, and IoT devices reinforce the company’s position as an innovation leader with strong consumer appeal. Early sales momentum for the YU7 SUV, solid demand for AI Glasses, and a comprehensive smart device portfolio underpin a positive growth trajectory. With a robust financial outlook and continued product diversification, Xiaomi remains a top pick for investors seeking exposure to China’s dynamic technology and consumer electronics sectors.