JPMorgan maintains Neutral on Xiaomi: extended-range SUV launch in line with expectations, but FY26 EV delivery target risk rises

Overview

This is a JPMorgan company research report on Xiaomi (1810.HK), focused on Xiaomi's expected launch of its new SkyNomad extended-range SUV series. The report acknowledges that the new models' pricing and product positioning were broadly in line with expectations, but focuses more on the impact of limited initial demand visibility and the later delivery schedule on the FY26 EV delivery target.

Core views

The core view is to maintain a Neutral rating. JPMorgan believes Xiaomi's share price has rebounded from its trough valuation range and outperformed the HSTECH Index by 36% in July, but fundamental improvement remains unclear. The new SUV lacks disclosure of initial reservation data, creating uncertainty around consumer reception; meanwhile, official deliveries will not begin until September, with the main contribution coming in 4Q26, putting the full-year EV delivery target of 550K units at risk of being lowered. Smartphone profit growth may also be constrained by rising memory costs, while AIoT demand is expected to remain slow in 2026.

Analysis framework

The report combines an event-driven approach with segment-level fundamental analysis: it first assesses the new model launch, pricing, spaciousness selling points, and reservation disclosures; then uses 1H26 deliveries and the full-year target to derive the required monthly delivery pace for the second half; finally, it incorporates consumer electronics, smartphones, AIoT, overseas EV expansion, and valuation positioning to determine the investment rating. For valuation, it uses an SOTP approach, valuing the core business separately from EV and new businesses.

Methodology notes

• Valuation methodsSOTP

  sum-of-the-parts valuation

  The HK$35 target price is based on SOTP valuation, with the core business valued at 12.0x ex-cash 12-month forward earnings and EV and new businesses valued at 1.5x 12-month forward P/S.

• fundamental_analysisshipment_target_bridge

  shipment target back-solving

  Using approximately 185K EV deliveries in 1H26 and the FY26 target of 550K units, the report back-solves that second-half deliveries would need to exceed 60K units per month, significantly above the previous monthly record of approximately 50K units, and therefore concludes that achieving the target has become more difficult.

Asset mapping & comparison

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

• Xiaomi (1810.HK)

  Research subject

  Strengths

  Broad exposure to smartphones, AIoT, and EVs; the new SkyNomad extended-range SUV expands the product portfolio, and new EV launches can still attract market attention.

  Weaknesses

  Moderate consumer electronics demand, slow AIoT growth, rising memory costs pressuring smartphone profits, and increasing difficulty in achieving the EV delivery target.

  Comparison

  The share price outperformed the HSTECH Index by 36% in July, but has moved away from the trough valuation range of 10–15x PE or HK$24–27.

  Risks

  Weaker-than-expected demand for new models, a lower EV delivery target, intensifying competition, declining backlog, and downward EPS estimate revisions.

Key data

• RatingNeutralJPMorgan maintains a Neutral rating on Xiaomi.
• Target priceHK$35.00The target price horizon is December 31, 2026.
• Current priceHK$31.04The price date is July 30, 2026.
• Implied upsideapproximately 12.8%Calculated based on the HK$35.00 target price and HK$31.04 current price.
• 1H26 EV deliveriesapproximately 185K unitsBelow the pace required to achieve the full-year target of 550K units.
• FY26 EV delivery target550K unitsThe report believes this target is at risk of being lowered.
• Monthly deliveries required to meet target60K+ units/monthAbove the record monthly delivery of approximately 50K units in December 2025.
• New model pre-sale pricesN90 Max approximately RMB300K; N70 Max approximately RMB260KSlightly below the YU7 Max at approximately RMB330K and YU7 Pro at approximately RMB280K.
• Relative share price performanceOutperformed the HSTECH Index by 36% in JulyThe report attributes this to short covering, weak AI and semiconductor sentiment, and expectations surrounding the SUV launch.

Impact & implications

For investment implications, the report believes the new model launch alone is insufficient to constitute a clear positive catalyst. If subsequent order disclosures or the delivery ramp fall short of expectations, the market may lower its FY26 EV delivery and earnings expectations; conversely, a significant acceleration in EV deliveries in 4Q26, smooth progress in the 2027 European EV rollout, or stabilization in smartphone and IoT gross margins could present upside risks.

Risks

• Slowing IoT demand could lead to further revenue downgrades.
• Insufficient persistence of refreshed SU7 demand or a muted response to new models could result in a lower FY26 EV delivery target.
• Intensifying competition in the EV market and a declining backlog could affect the delivery ramp.
• Rising memory prices could constrain smartphone profit growth.
• AIoT growth may remain slow in 2026 due to slowing demand growth in China.

What to watch

• Whether SkyNomad N90 Max and N70 Max subsequently disclose strong reservation or lock-in order data.
• The pace of monthly EV delivery ramp after official deliveries begin in September.
• Whether the company maintains or lowers its FY26 EV delivery target of 550K units.
• Order and delivery performance following the launch of new models such as the YU9 in 2H26.
• Whether smartphone and IoT gross margins are affected by memory price pressure.
• Progress in preparing for the 2027 European EV launches and building overseas sales and service channels.