Xiaomi faces a dense catalyst calendar in the third quarter; Goldman Sachs maintains Buy and a HK$40 target price

Overview

This is a Goldman Sachs Asia Equity Research multi-theme research roundup in The 720 format, focused primarily on Xiaomi while also covering consumer, technology, shipbuilding, metals and mining, healthcare, and Asia strategy. The core conclusion is that Xiaomi's near-term earnings may be bottoming, and that smart EV and AI catalysts in the third quarter could bring a potential inflection opportunity.

Core views

Goldman Sachs believes that after Xiaomi faces pressure on smartphone and AIoT revenue in 2Q26, its core revenue is likely to return to positive growth in 3Q26; new EV products and AI development are key catalysts. The report also believes Micron's results and guidance were significantly ahead of expectations, Guming's convertible bond provides funding for expansion but brings non-cash amortization impact, global shipbuilding order momentum is likely to re-accelerate, and iron ore may fall below US$95/dmt in the short term but is expected to return to around US$100/t from September to December.

Analysis framework

The report uses a multi-theme morning note framework: it first conducts a bottom-up assessment of Xiaomi's catalysts, valuation, and delivery volumes, then combines company events, industry supply-demand dynamics, management discussions, and strategy signals to derive short- to medium-term investment implications for other key assets and sectors.

Methodology notes

• company rating and target price12-month target price and Investment List rating

  Uses Buy, Neutral, Sell, and a 12-month target price to express relative return potential.

  The report assigns Xiaomi a Buy rating and a 12-month target price of HK$40. The target price horizon is 12 months, and the rating meaning is based on total return potential relative to coverage.

• factor analysisGS Factor Profile

  Characterizes stock features through growth, financial returns, valuation multiples, and composite percentiles.

  The disclosure section states that this framework is based on Goldman Sachs forecasts and standardizes rankings across metrics such as sales, EBITDA, EPS, ROE, ROCE, CROCI, and valuation multiples.

• M&A probability frameworkM&A Rank

  Uses a 1 to 3 scale to assess the probability that a covered company becomes an M&A target.

  The disclosure section states that M&A Rank 1 represents a high probability of 30%-50%, 2 represents a medium probability of 15%-30%, and 3 represents a low probability of 0%-15%; for companies rated 1 or 2, an M&A component may be included in the target price.

• industry supply-demand researchcommodities supply-demand and price path assessment

  Combines seasonal shipments, Chinese steel production, grade decline, and the cost curve to assess iron ore and copper prices and supply-demand.

  The metals and mining section distinguishes short-term pressure on iron ore from medium-term supply-demand support, and highlights copper sector focus areas including project pipeline, capex inflation, financing conditions, and regulatory changes.

Asset mapping & comparison

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

• Xiaomi / 01810.HK

  Key covered company and primary focus asset.

  Strengths

  Valuation is more attractive after a 42% pullback since the start of the year; smart EV and AI progress form 3Q26 catalysts; EV delivery estimates are maintained.

  Weaknesses

  2Q26 may be the weakest quarter of the year, with China smartphone and AIoT revenue expected to decline 23% year over year.

  Comparison

  Compared with the 2Q26 trough, the report is more focused on the potential inflection opportunity from core revenue returning to positive growth in 3Q26 and the new EV series.

  Risks

  EV new product pricing, delivery execution, smartphone demand, and AIoT recovery may fall short of expectations.

• Guming

  Consumer-theme company; the report maintains Buy (CL).

  Strengths

  The HK$1.96bn convertible bond provides funding for domestic and overseas expansion, while store expansion and category growth support earnings visibility.

  Weaknesses

  Non-cash amortization from the convertible bond will depress reported net profit, and the stock pulled back 25% during the quarter due to consumer concerns.

  Comparison

  The report believes consumer concerns caused the pullback, but expansion and category growth still support medium-term visibility.

  Risks

  Weaker-than-expected consumer demand, poor overseas expansion execution, and greater-than-expected dilution or accounting impact from the convertible bond.

• Micron Technology

  Reference asset for the semiconductor memory cycle.

  Strengths

  Results and guidance were significantly ahead of market expectations, with continued DRAM and NAND pricing momentum.

  Weaknesses

  Subsequent performance depends on industry pricing, customer agreements, and the capex path.

  Comparison

  The report believes strong results and guidance should drive the share price higher.

  Risks

  Higher FY27 CapEx, slower pricing momentum, or customer agreement progress below expectations.

• global shipbuilding sector

  Sector theme asset.

  Strengths

  Replacement demand and high freight rates support a recovery in new ship orders, and Chinese shipyards have a high share of new tanker orders.

  Weaknesses

  The month-on-month slowdown in May orders shows that the short-term pace may still fluctuate.

  Comparison

  The report is positive on beneficiaries such as Hengli, Yangzijiang Shipbuilding, Namura, and Mitsui E&S.

  Risks

  Falling freight rates, slower-than-expected realization of demand for eco-friendly vessels, and capacity expansion or delivery bottlenecks.

• global metals and mining

  Commodities and mining equities theme.

  Strengths

  Seaborne iron ore is supported over the medium to long term by mine depletion, declining grades, and a steeper cost curve, while the copper sector still has structural supply-demand issues.

  Weaknesses

  Iron ore may come under pressure over the next 1-2 months due to increased seasonal shipments, slower China construction, and coking coal shortages.

  Comparison

  Prices may dip in the short term, but the report expects a return to around US$100/t from September to December as Chinese steel production recovers.

  Risks

  Weaker-than-expected Chinese steel demand, earlier supply additions, and cost inflation and regulatory uncertainty for copper projects.

• WuXi XDC, CSPC Pharma, Genscript Biotech, Edge Medical

  Assets related to China Healthcare Corp Day.

  Strengths

  Orders, licensing deals, AIDD demand, overseas installations, and procedure volume growth are the main supports.

  Weaknesses

  Policy impact, the pace of CDMO recovery, commercialization execution, and overseas market expansion still need verification.

  Comparison

  The report maintains Buy on multiple companies and highlights that growth drivers differ by company, coming from ADC, the siRNA/AstraZeneca deal, life science services, and overseas expansion of surgical robots.

  Risks

  Healthcare anti-corruption and regulatory policy, delays in clinical data or milestones, and lower-than-expected utilization of overseas installed base.

Key data

• Report date2026-06-25 7:18AM HKTFrom the timestamp on the report cover.
• Xiaomi ratingBuyThe report title paragraph explicitly states Buy.
• Xiaomi 12-month target priceHK$40The target price is unchanged.
• Xiaomi pullback since the start of the year42%The report says the post-pullback valuation is attractive.
• Xiaomi 2Q26 China smartphone and AIoT revenue assumptiondown 23% year over yearThe report believes 2Q26 may be the weakest quarter of the year.
• Xiaomi EV delivery estimate2026E 110k units; 2027E 240k unitsGoldman Sachs maintains its delivery estimates.
• Xiaomi third EV series assumptionrange-extended large SUV, starting price around Rmb200,000Positioned for the entry-level luxury market.
• Micron reported resultsrevenue $41.46bn; Non-GAAP EPS $25.11The report believes results were ahead of market expectations.
• Micron FY4Q guidancerevenue midpoint $50.00bn; Non-GAAP EPS $31.00Investors will focus on 16 Strategic Customer Agreements and the FY27 CapEx update.
• Guming financingHK$1.96bn one-year zero-coupon convertible bondThe company also announced a share buyback to mitigate potential dilution.
• Global shipbuilding order shareChinese shipyards accounted for 76% of new tanker orders; Korean shipyards won 100% of LNGC ordersThe report believes new ship order momentum is likely to re-accelerate.
• Iron ore price viewmay fall below US$95/dmt in the short term; return to around US$100/t from September to DecemberShort term affected by seasonal shipments, slower China construction, and coking coal shortages.
• WuXi XDC revenue targetaround 35% USD revenue growthManagement believes order flow and execution progress support achieving guidance.
• Edge Medical installed base and procedure volumeglobal cumulative installed base expected to reach 160 units in 1H2026; cumulative procedures exceeded 20,000 as of May 2026The report emphasizes overseas expansion and utilization improvement.

Impact & implications

For investors, the key question for Xiaomi is whether it can deliver a 3Q26 revenue recovery and new EV product catalysts after the 2Q26 trough; if delivery and pricing execution go smoothly, valuation recovery potential after the sharp year-to-date pullback may open up. Across assets, the report also points to opportunities in the memory upcycle, consumer company expansion financing, shipbuilding renewal demand, short- and medium-term divergence in commodities, and China's healthcare innovation chain.

Risks

• Xiaomi's 2Q26 may be the weakest quarter of the year; if smartphone and AIoT revenue pressure persists, it will weaken the 3Q26 recovery view.
• If Xiaomi's third EV series underperforms expectations in pricing, delivery, and competitive positioning, it could affect valuation recovery.
• If China consumer and smart hardware demand remains weak, it could weigh on Xiaomi and other consumer-related assets such as Guming.
• Non-cash amortization, potential dilution, and expansion execution risk from Guming's convertible bond need to be monitored.
• Iron ore is affected in the short term by seasonal supply, slower China construction, and coking coal shortages, and prices may fall below US$95/dmt.
• The healthcare sector faces risks from policy, compliance, clinical data, licensing deals, and overseas commercialization execution.
• Index classification, macro uncertainty, and capital flow changes may affect related strategy performance in South Korea, Indonesia, and Australia.

What to watch

• Whether Xiaomi's core revenue returns to positive growth in 3Q26.
• The positioning, starting price, orders, and delivery ramp of Xiaomi's third EV series.
• Whether Xiaomi's 2026E 110k-unit and 2027E 240k-unit EV delivery assumptions need adjustment.
• Whether China smartphone and AIoT demand improves after 2Q26.
• Micron management's updates on 16 Strategic Customer Agreements and FY27 CapEx.
• Progress on Guming's convertible bond issuance, share buyback, and overseas expansion.
• Whether iron ore returns to around US$100/t from September to December as Chinese steel production recovers.
• Orders, milestones, overseas installations, and policy impact for WuXi XDC, CSPC Pharma, Genscript Biotech, and Edge Medical.