SkyNomad's attractive pricing and sales outlook viewed as positive catalysts for Xiaomi's share price

Overview

This report is Morgan Stanley's conference takeaways/event commentary on Xiaomi Corp (1810.HK), focusing on the technology launch and preliminary pricing of Xiaomi's new EV brand, SkyNomad. The report believes SkyNomad is Xiaomi's first foray into extended-range electric vehicles, and its potential sales performance could become a positive share-price catalyst due to its intelligent spatial design and attractive pricing.

Core views

The core view is that SkyNomad's product positioning and price range could strengthen Xiaomi's competitiveness in the smart EV market. The disclosed prices of the N90 Max and N70 Max are Rmb299.9k and Rmb259.9k, respectively, with subsequent Pro and standard versions expected to be priced lower. Morgan Stanley believes that innovative design combined with competitive pricing makes SkyNomad more likely to achieve strong sales.

Analysis framework

The report interprets the launch of Xiaomi's new EV brand from an event-driven perspective and evaluates the company's value using a sum-of-the-parts valuation framework. The non-EV businesses use a residual income model, while the EV business uses a probability-weighted DCF to reflect the probability of success and different scenarios for the electric vehicle business.

Methodology notes

• Valuation methodsSum-of-the-parts valuation

  sum of the parts

  The report separately values the smartphone, IoT, internet services, EV, and investment businesses and then aggregates them to form a base-case valuation.

• Valuation methodsResidual income model

  residual income model

  The smartphone, IoT, and internet services units use a residual income model; the corresponding costs of equity are 11%, 11%, and 11.4%, respectively, while the terminal growth rates are 3%, 3%, and 6%, respectively.

• Valuation methodsProbability-weighted DCF

  probability-weighted DCF

  The EV business uses a DCF weighted by probabilities of 20% bull case, 60% base case, and 20% bear case; WACC is 12.2% and the terminal growth rate is 5%.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Xiaomi Corp (1810.HK)

  Core covered security; SkyNomad's sales performance directly affects expectations for the company's EV business and serves as a share-price catalyst

  Strengths

  SkyNomad enters the extended-range SUV segment with attractive pricing; the product emphasizes intelligent spatial design; the company is listed as a Top Pick with an Overweight rating.

  Weaknesses

  The EV business remains in the investment and validation phase; the smartphone business may face gross-margin pressure from inventory destocking and weak demand.

  Comparison

  The report primarily examines Xiaomi's new EV model pricing and sales outlook and does not provide a quantitative comparison with specific competitors.

  Risks

  Intense ongoing EV competition, orders or user feedback falling short of expectations, and market concerns over smart EV investment.

Key data

• Stock ratingOverweightMorgan Stanley's relative rating system; shown alongside a buy equivalent solely for regulatory disclosure mapping.
• Industry viewIn-LineThe covered industry is Greater China Technology Hardware.
• Target priceHK$32.00The target-price time frame is typically 12-18 months.
• Closing priceHK$31.04As of July 30, 2026.
• SkyNomad N90 Max pricingRmb299.9kFlagship seven-seat extended-range SUV.
• SkyNomad N70 Max pricingRmb259.9kLarge five-seat all-wheel-drive extended-range SUV.
• Expected official launchSeptember 2026Full pricing is expected to be announced at that time.
• Estimated N70 series price rangeRmb200-250kThe report expects lower price points for the Pro and standard versions.
• Estimated N90 series price rangeRmb250-300kThe report's assessment of the price range for different versions.

Impact & implications

If SkyNomad orders and user feedback exceed expectations, the growth narrative and sum-of-the-parts valuation of Xiaomi's EV business could gain support, improving market confidence in the returns on its smart EV investment. However, the current target price implies limited upside relative to the closing price, and share-price performance will still depend on sales realization, the competitive landscape, and margins in the traditional smartphone business.

Risks

• Intense competition in the EV market remains ongoing.
• The smartphone business faces gross-margin pressure from inventory destocking and weak demand.
• Uncertainty over the scale and returns of smart EV investment could weigh on valuation.
• If orders, delivery ramp-up, or customer feedback for the new EV models fall short of expectations, the share-price catalyst could weaken.

What to watch

• The official launch and full pricing of SkyNomad in September 2026.
• Order volumes, locked-order conversion rates, and user feedback for the N70 and N90 series.
• Xiaomi's EV production ramp-up, delivery pace, and gross-margin performance.
• Sales contribution from offline channel expansion in China.
• Changes in overseas market share.