Xiaomi launches new EREVs as scheduled, but pressure on the FY26 EV delivery target is rising

Overview

This report focuses on the investment implications following Xiaomi's launch of its new extended-range electric vehicles. J.P. Morgan believes that the launch schedule was broadly in line with expectations, but official deliveries will not begin until September, and management's failure to disclose initial reservation data has reduced market confidence in demand strength and the achievability of the FY26 delivery target.

Core views

The core view is to maintain a Neutral rating. The new EREV SUVs offer some appeal in terms of space and pricing, but lack support from strong reservation data. Against the backdrop of only approximately 185K deliveries in 1H26, the full-year target of 550K units requires a significant acceleration in the second half, making execution challenging. Meanwhile, smartphone profit growth is constrained by rising memory prices, and AIoT demand is expected to remain subdued in 2026, leaving limited clear near-term upside catalysts.

Analysis framework

The report evaluates the risk-reward profile of Xiaomi's stock from the perspectives of new vehicle positioning, presale prices, management disclosure behavior, delivery cadence, historical monthly delivery peaks, core business valuation, and segment valuation. Valuation uses an SOTP framework, applying a 12-month forward earnings multiple to the core business and a 12-month forward sales multiple to EVs and new businesses.

Methodology notes

• Valuation methodologySOTP

  Sum-of-the-parts valuation

  The HK$35.00 target price is based on SOTP: the core business is valued at 12.0x ex-cash 12-month forward earnings, while EVs and new businesses are valued at 1.5x 12-month forward sales.

• Operating metrics trackingDelivery ramp-up analysis

  Assessing target achievability by comparing realized deliveries, the full-year target, and historical peaks

  Xiaomi delivered approximately 185K EVs in 1H26. To achieve the full-year target of 550K units, average monthly deliveries in the second half would need to exceed 60K units, above the historical monthly peak of approximately 50K units in December 2025, increasing execution risk.

Asset mapping & comparison

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

• Xiaomi shares 1810.HK

  Covered security

  Strengths

  Expansion of the new EREV SUV product line, with some competitiveness in interior space and pricing; the company still plans to launch multiple new models.

  Weaknesses

  Management has not disclosed initial reservation data; smartphone profits are constrained by memory cost pressures, while AIoT demand growth remains slow.

  Comparison

  The current share price has moved out of the bottom valuation range of 10–15x PE or HK$24–27. The target price still implies approximately 12.8% upside to the current price, but clear catalysts are lacking.

  Risks

  The FY26 EV delivery target may be lowered; intensifying competition, insufficient order sustainability, and the complexity and slow start of overseas EV channel development pose risks.

Key data

• Current priceHK$31.04As of July 30, 2026.
• Target priceHK$35.00The target price horizon is December 31, 2026.
• RatingNeutralThe report maintains a Neutral rating.
• 1H26 EV deliveriesApproximately 185K unitsA substantial gap remains to the 550K-unit FY26 target.
• FY26 EV target550K unitsAchieving the target would require subsequent monthly deliveries to exceed 60K units.
• Historical monthly delivery peakApproximately 50K unitsThe report identifies December 2025 as the record month for deliveries.
• New EREV SUV presale pricesN90 Max approximately RMB300K; N70 Max approximately RMB260KPricing was broadly in line with J.P. Morgan's expectations.

Impact & implications

In terms of investment implications, the vehicle launch itself is insufficient to change the rating. If subsequent orders and delivery ramp-up fall short of expectations, the market may lower its forecasts for Xiaomi's FY26 EV deliveries and earnings. If new models such as the YU9 drive a rapid increase in deliveries and smartphone and AIoT gross margins stabilize, market sentiment could improve.

Risks

• Slowing IoT demand could lead to further downward revisions to revenue.
• Insufficient sustainability of demand for the SU7 facelift or a muted response to new models could lead to a reduction in the FY26 EV delivery target.
• Intensifying competition and declining backlogged orders could constrain the EV sales ramp-up.
• Rising memory prices could limit smartphone profit growth.
• The European EV business still requires approximately 12 months of preparation; sales and service channel development is complex, and initial growth could be slow.

What to watch

• Subsequent official orders, locked-in orders, and cancellations for the new EREV SUVs.
• Weekly and monthly ramp-up rates after deliveries begin in September.
• Whether management adjusts the FY26 EV delivery target of 550K units.
• Demand performance following the launch of new models such as the YU9 in 2H26.
• Whether smartphone and IoT gross margins remain under pressure from memory price pressures.
• Progress in preparing for the 2027 European EV launch.