The SkyNomad launch event may become a positive catalyst for Xiaomi in the coming months

Overview

This report focuses on the technology launch event for Xiaomi's new EV brand SkyNomad. Morgan Stanley believes the event could become a positive catalyst for Xiaomi's share price and market expectations in the coming months. The core message of the report is that SkyNomad is not just a new model or a technology showcase, but is centered on the concept of "in-car living space," seeking to expand the use value of automobiles across scenarios such as commuting, rest, work, family travel, and camping through a smart cockpit and flexible use of space.

Core views

The report takes a positive view. Xiaomi's auto business is seen as an important driver of valuation and sentiment, and the SkyNomad launch is expected to strengthen investor confidence in the probability of success for the company's EV business. Morgan Stanley maintains its Overweight and Top Pick positioning on Xiaomi, with a target price of HK$32.00, implying 20% upside relative to the HK$26.72 closing price on July 24, 2026. The report also points out that EV competition, pressure on smartphone gross margins, and concerns over intelligent EV investment remain the main downside risks.

Analysis framework

The report combines company event interpretation, product parameter review, test progress verification, and segment valuation. On the event side, it focuses on the SkyNomad technology launch event in Beijing on July 30; on the product side, it focuses on cabin space, range, fuel consumption, and test coverage; on the valuation side, it adopts a sum-of-the-parts framework, using the residual income model for smartphones, IoT, and internet services, a probability-weighted DCF for the EV business, and also incorporates investment value.

Methodology notes

• Valuation methodssum of the parts

  sum-of-the-parts valuation

  The report uses sum-of-the-parts as the base-case valuation framework, estimating smartphones, IoT, internet services, EV business, and investment value separately before combining them.

• Valuation methodsResidual income model

  residual income model

  Smartphones, IoT, and internet services use the residual income model; the costs of equity are 11%, 11%, and 11.4%, respectively, and the terminal growth rates are 3%, 3%, and 6%, respectively.

• Valuation methodsdiscounted cash flow

  DCF valuation

  The EV business uses DCF, probability-weighted at 20% bull case, 60% base case, and 20% bear case to reflect the likelihood of success for the EV business; WACC is 12.2%, and the terminal growth rate is 5%.

• research_frameworkMorgan Stanley ModelWare

  ModelWare estimation framework

  The report notes that unless otherwise specified, the relevant metrics are based on the Morgan Stanley ModelWare framework, and some EPS figures use the consensus methodology.

Asset mapping & comparison

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

• Xiaomi Corp (1810.HK)

  The research-covered stock, rated Overweight and listed as a Top Pick.

  Strengths

  The SkyNomad launch event provides an event catalyst; a higher probability of success for the EV business could improve valuation; the company is also supported by diversified segments including smartphones, IoT, internet services, and investment value.

  Weaknesses

  2026e EPS and net profit are lower than in 2025, and the smartphone business may face gross margin pressure from inventory digestion and weak demand.

  Comparison

  Morgan Stanley uses a relative rating system, where Overweight means the expected risk-adjusted total return over the next 12 to 18 months exceeds the industry average of the analyst's coverage universe.

  Risks

  Intense EV competition, concerns over investment in intelligent EVs, and pressure on smartphone gross margins may drag on earnings and market sentiment.

• SkyNomad

  Xiaomi's new EV brand and the core of this report's event catalyst and product analysis.

  Strengths

  Positioned around "in-car living space," covering multiple scenarios such as commuting, rest, mobile office work, family weekend travel, and camping; large-scale road testing has already been completed.

  Weaknesses

  The report has not yet provided complete evidence on orders, pricing, delivery pace, and profitability.

  Comparison

  Compared with the traditional static cockpit positioning, SkyNomad emphasizes redefining the use of space through intelligence.

  Risks

  If orders and user feedback for the new model fall short of expectations, the catalytic effect of the launch event may weaken.

• EV business

  A key growth segment in Xiaomi's valuation, valued using a probability-weighted DCF.

  Strengths

  If new model orders and customer feedback are better than expected, this will be a source of upside risk.

  Weaknesses

  High capital investment, intense competition, and a profitability path that still needs validation.

  Comparison

  The report applies 20% bull case, 60% base case, and 20% bear case probability weighting to the EV business, distinguishing it from the residual income models used for other mature businesses.

  Risks

  Ongoing intense EV competition and market concerns over returns on intelligent EV investment.

Key data

• Report date2026-07-27The report was published on July 27, 2026 at 03:45 AM GMT.
• Launch event time and location2026-07-30, BeijingXiaomi announced that SkyNomad will hold a technology launch event in Beijing.
• Maximum pure electric range380 kmMaximum pure electric range under WLTC conditions.
• Minimum charge-sustaining fuel consumption5.7 L/100 kmMinimum fuel consumption in charge-sustaining mode.
• Number of test vehicles566 vehiclesNumber of test vehicles deployed by SkyNomad as of 1H26.
• Cumulative road-test mileage>4.28 million kmCumulative road-test mileage exceeded 4.28 million kilometers.
• Test coverage cities>300 Chinese citiesTesting covered more than 300 cities in China.
• Test environment range-41°C to 53°C, maximum altitude 5,380 metersShows that product validation covered extreme temperatures and high-altitude environments.
• Target priceHK$32.00Implies 20% upside.
• Closing priceHK$26.72As of July 24, 2026.
• Market capitalizationUS$90,962 mnCurrent market capitalization shown in the report table.
• 2026e EPSRmb0.89Morgan Stanley's estimated EPS for 2026 in the table.
• 2027e EPSRmb1.27Morgan Stanley's estimated EPS for 2027 in the table.
• 2028e EPSRmb1.85Morgan Stanley's estimated EPS for 2028 in the table.

Impact & implications

If SkyNomad receives strong orders and positive user feedback after the launch event, it will boost market confidence in the long-term potential and execution capability of Xiaomi's EV business, and may support a higher valuation weight for Xiaomi's EV segment. At the same time, the report still incorporates smartphones, IoT, internet services, and investment value into the sum-of-the-parts framework, indicating that the Xiaomi investment thesis does not rely solely on EVs, but the probability of success and competitive landscape of the EV business will significantly affect marginal expectations.

Risks

• Orders and customer feedback for SkyNomad's new EV model fall short of expectations.
• Competition in the EV industry remains intense, potentially pressuring volume, pricing, and margins.
• The smartphone business may face gross margin pressure due to inventory digestion and weak demand.
• Rising investment in intelligent EVs may raise market concerns over capital expenditure, margins, and cash flow.
• If overseas market share growth falls short of expectations, it may weaken the company's overall growth flexibility.

What to watch

• Product details, pricing, orders, and delivery guidance at the SkyNomad technology launch event in Beijing on July 30.
• User feedback, reservation performance, and media reviews after the SkyNomad launch.
• EV business capacity ramp-up, delivery pace, and gross margin trends.
• Sales contribution from expansion of offline channels in China.
• Changes in overseas market share.
• Inventory digestion, demand, and gross margin recovery in the smartphone business.