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

Xiaomi’s Ambitious Expansion: YU7 SUV, AI Glasses, and a Wave of New Products Power Growth Prospects

Overview: Xiaomi’s Multi-Product Launch Sets the Stage for Future Growth

Xiaomi Corporation is making bold moves to cement its leadership in communications equipment, consumer electronics, and the rapidly evolving electric vehicle (EV) space. The company’s recent product showcase revealed its latest YU7 SUV, a suite of AI-driven wearables, next-generation smartphones, and an impressive array of IoT and home appliances. UOB Kay Hian maintains a BUY rating on Xiaomi with a target price of HK\$69.90, suggesting an upside of 22.8% from current levels.

Stock Snapshot 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 High/Low: HK\$59.45 / HK\$15.36
• Major Shareholders: Smart Mobile Holdings Ltd (8.56%), Lin Bin (2.09%)
• FY25 NAV/Share: RMB 10.18
• FY25 Net Cash/Share: RMB 0.88
• Price Performance: YTD +64.9%; 1Y +219.3%; 6M +73.7%; 3M +5.5%; 1M +10.9%

Xiaomi YU7 SUV: Entering the High-Performance EV Arena

The centerpiece of Xiaomi’s launch is the YU7, a luxury mid-to-large-sized SUV aimed at family users. Priced from RMB 253,500 (Standard), RMB 279,900 (Pro), to RMB 329,900 (Max), the YU7 features:

• Dual Motor AWD
• LiDAR sensors and NVIDIA Drive AGX Thor platform
• Up to 508 kW (688 hp) power output
• 0–100 km/h in 3.23 seconds
• 760 km CLTC range with a 101.7 kWh CATL NMC battery
• HyperOS infotainment with 16.1″ display
• Charging (10–80%) in as little as 12 minutes

The YU7’s specifications are highly competitive versus rivals such as Tesla Model Y, Luxeed R7 Max, XPeng G9, and NIO ES6. Its family-oriented design, larger and more comfortable cabin, and enhanced shock absorption distinguish it from Xiaomi’s earlier SU7, which targets driving enthusiasts.

Early demand for the YU7 is robust, with 289,000 initial orders (including non-confirmed and refundable) within the first hour of launch. For orders before 31 July 2025, Xiaomi offers free spec upgrades worth RMB 29,000 and lifetime HAD self-driving system access valued at RMB 26,000. The company is targeting 150,000 YU7 deliveries in 2025.

Xiaomi AI Glasses: Smart Wearables with Advanced Features

Xiaomi’s AI Glasses enter the market as a direct competitor to Meta’s Ray-Ban smart glasses, with the following advantages:

• Lighter weight at 40g (Ray-Ban: 49g)
• Longer battery life (8.6 hours vs. Ray-Ban’s 4 hours)
• Electrochromic function for customizable lens shading (higher-end versions)
• 12MP Sony IMX681 camera, 2K/30fps video
• Tight ecosystem integration for China (Meta’s AI assistant not available in China)

Pricing is at the premium end: RMB 1,999 for the standard, RMB 2,699 for black/white electrochromic, and RMB 2,999 for colored electrochromic. The two electrochromic versions quickly sold out, indicating strong interest despite expectations for a lower ASP. Xiaomi projects sales of around 300,000 AI Glasses units per year, with an estimated 1% impact on total revenue.

Next-Generation Smartphones: Mix Flip 2 & Redmi K80 Ultra

Xiaomi continues to innovate in smartphones with the Mix Flip 2 and Redmi K80 Ultra:

• Mix Flip 2: Slimmer, new hinge, 7.57mm folded, 199g, 4” OLED cover, Snapdragon 8 Elite, 50MP dual cameras. Pricing: RMB 5,999 (12GB/256GB) to RMB 7,299 (16GB/1TB). Entry-level model is eligible for national trade-in subsidies.
• Redmi K80 Ultra: Focuses on gaming and battery life, now with Dimensity 9400+ chip (TSMC 3nm), 7,410mAh battery, and Immortalis-G925 GPU. Pricing: RMB 2,599 (12GB/256GB) to RMB 3,799 (16GB/1TB), slightly higher than Redmi K80 but discounted after subsidies.

Xiaomi Pad 7S Pro & Redmi K Pad: Expanding the Tablet Portfolio

• Pad 7S Ultra: Largest Xiaomi tablet to date with 14” 3:2 display, powered by XRING O1. Priced from RMB 3,599 (12GB/256GB) to RMB 4,699 (16GB/1TB with nano-texture glass). Thinner and lighter than iPad Air, with trade-in subsidies lowering the effective price.
• Redmi K Pad: Redmi’s first small-sized tablet, benchmarks iPad Mini, Mediatek Dimensity 9400+, gaming-focused design. Pricing: RMB 2,799 (8GB/256GB) to RMB 4,199 (16GB/1TB).

IoT and Smart Home: Ecosystem Expansion

Xiaomi continues to broaden its product reach with the Smart Band 10, Watch S4 (41mm), Open Ear Earbuds Pro, and enhanced home appliances including vacuums and air conditioners. These offerings further strengthen Xiaomi’s “smart home” and IoT ecosystem, enhancing stickiness across its user base.

Financial Highlights and Valuation

• Gross margin: 20.9% (2024) rising to 23.6% (2027F)
• Net cash position: Strong with negative net debt-to-equity projected through 2027
• Dividend yield: 0%

Valuation is based on a sum-of-the-parts approach: HK\$52.10 for the core business (30x 2025F P/E, 1SD above 5-year historical average) and HK\$17.80 for the EV business (10-year DCF, WACC 9.6%), implying 5.1x 2025F P/S for EVs.

Conclusion: Xiaomi’s Innovation Drive Fuels Long-Term Upside

Xiaomi’s latest launches reaffirm its commitment to innovation and multi-sector expansion. The YU7 SUV targets an untapped family SUV segment, while the AI Glasses and new tablets diversify revenue streams. Robust early demand and a strong financial outlook support the broker’s BUY rating and bullish target price. Investors should watch Xiaomi’s execution in EV deliveries and ecosystem integration for further catalysts.