Xiaomi March Deliveries Were Weighed Down by SU7 Ramp-Up, but Orders Surge

Overview

This report focuses on Xiaomi's (1810.HK) automotive business in terms of March deliveries, orders, and first-quarter margin changes. Deutsche Bank points out that March deliveries were below market expectations, but the key reason was not weakening demand; rather, Xiaomi shifted some capacity to ramp up the new SU7 launch, temporarily weighing on YU7 deliveries. At the same time, the new SU7 significantly boosted showroom traffic and orders, leading to a sharp increase in March new orders. The report keeps a Buy rating and a HKD 67.00 target price.

Core views

The core view is that: first, the weaker March deliveries should be seen as a supply-side capacity shift rather than demand deterioration; second, the YU7 waiting time remained at 7 to 10 weeks, indicating that order backlog is still stable; third, the SU7 launch generated strong orders, with about 30,000 non-cancellable orders in three days confirming demand; fourth, the EV-related business came under pressure in Q1 from subsidies and R&D spending, but this may be a temporary low point; and fifth, from Q2 onward, as 2025 order subsidies end, the SU7 contributes a full month of deliveries, and range-extended models such as N3 and N2 are launched, sales and margins could improve sequentially.

Analysis framework

The report mainly uses monthly delivery volumes, weekly new orders, waiting times, subsidy policy, R&D spending plans, and segment gross margin forecasts to assess the demand quality and earnings cadence of Xiaomi's EV business. On valuation, it compares the 12-month target price with the current share price and applies Deutsche Bank's TSR rating framework to assign a Buy rating.

Methodology notes

• Rating FrameworkTSR

  Total Shareholder Return

  Deutsche Bank defines TSR as the percentage share-price change from the current price to the target price plus the expected dividend yield, and uses it to assign a Buy, Hold, or Sell rating on a 12-month view.

• Demand AssessmentWaiting Time and Order Backlog

  Supply-demand attribution for declining deliveries

  The report uses changes in the YU7 waiting time to determine whether demand is weakening; the waiting time staying at 7 to 10 weeks supports its view that the March delivery decline was due to capacity reallocation rather than weaker demand.

• Profit ForecastingSegment Gross Margin and Expense Pressure Analysis

  Short-term loss in Smart EV, AI, and other new initiatives

  Combining vehicle purchase subsidies, R&D expenses, and capital expenditure investment, the report forecasts that this segment's first-quarter gross margin will fall to 18%, with a net loss of about RMB 1.0 billion.

Asset mapping & comparison

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

• Xiaomi 1810.HK

  The covered company; Deutsche Bank maintains a Buy rating.

  Strengths

  Strong new SU7 orders, stable YU7 waiting times, an expanding EV product lineup, and a 2026 delivery forecast of 750,000 units.

  Weaknesses

  March deliveries were below market expectations, and the Q1 EV-related segment saw lower margins and a net loss due to subsidies and R&D spending.

  Comparison

  The HKD 67.00 target price is well above the April 1, 2026 price of HKD 32.02, implying substantial upside.

  Risks

  Production ramp-up falls short of expectations, order conversion is weaker than expected, subsidy and R&D pressure persists, PHEV launches are delayed, and industry competition intensifies.

• Xiaomi EV

  An important growth and valuation re-rating driver for Xiaomi Group.

  Strengths

  The SU7 launch has boosted showroom traffic and orders, YU7 order backlog remains stable, and the business will later enter the PHEV market.

  Weaknesses

  Short-term capacity reallocation is affecting the delivery cadence, and the business is still in a high-investment phase.

  Comparison

  The report expects a trough in Q1, with sequential improvement from Q2 onward.

  Risks

  New model delivery ramp-up, supply chain issues, price competition, subsidy policy changes, and swings in consumer demand.

Key data

• Current priceHKD 32.02As of 2026-04-01.
• 12-month target priceHKD 67.00Deutsche Bank target price.
• March EV deliveries>20,000 unitsMarch deliveries were roughly flat sequentially but below market expectations.
• March YU7 deliveries~13,000 unitsDown about 36% month over month; the report believes this was mainly due to capacity shifting to the SU7.
• March SU7 deliveries>7,000 unitsThe new SU7 is in the launch ramp-up phase.
• March new orders~57,200 unitsThe report estimates a 472% increase month over month.
• Initial SU7 orders~30,000 non-cancellable ordersReceived within the first three days after the new SU7 launch.
• Q1 EV deliveries>79,416 unitsThe wording for Xiaomi EV's Q1 2026 deliveries, whether year over year or quarter over quarter, comes from the original report text.
• Q1 segment gross margin forecast18%For Smart EV, AI, and other new initiatives, expected to decline by 4.7 percentage points sequentially.
• Q1 segment net loss forecastRMB 1.0 billionMainly affected by vehicle purchase subsidies and R&D spending.
• 2026 EV delivery forecast750,000 unitsIncluding 600,000 pure EV models and 150,000 PHEV models.

Impact & implications

From an investment perspective, the report explains the March delivery miss as a short-term production scheduling issue rather than a demand inflection point, so the negative read-through for the share price is limited. If the SU7 contributes a full month of deliveries starting in April, and the 2025 order subsidies end after Q2, Xiaomi EV's sales, gross margin, and losses could all improve at the same time. If future range-extended models such as N3 and N2 are launched smoothly, they could further expand the 2026 sales outlook.

Risks

• SU7 production ramp-up or delivery pace falls short of expectations.
• YU7 demand backlog does not translate into sustained deliveries.
• Vehicle purchase subsidies, R&D expenses, and capital expenditure prolong losses in the EV-related segment.
• Timing and market acceptance of PHEV or EREV models such as N3 and N2 remain uncertain.
• Intensifying price competition in the new energy vehicle industry could compress gross margins.
• Deutsche Bank disclosed that it may have market-making, service compensation, or other business relationships with the company, and investors should pay attention to potential conflict-of-interest disclosures.

What to watch

• April full-month SU7 deliveries and order conversion.
• Whether the YU7 waiting time remains at 7 to 10 weeks or extends further.
• Whether gross margins in Smart EV, AI, and other new initiatives recover after 2025 order subsidies end from Q2 onward.
• Progress toward the full-year 2026 EV delivery forecast of 750,000 units.
• The timing of the launch of the full-size N3 SUV in mid-year and the large N2 SUV in the second half.
• Whether net losses in the Xiaomi EV segment narrow materially from the Q1 low.