Catalyst Preview

Research evidence excerpt

Catalyst Preview

Idea

August 2, 2026 10:33 PM GMT

Morgan Stanley Asia Limited+MXiaomi Corp | Asia Pacific Andy Meng, CFA

Equity Analyst

Catalyst Preview Andy.Meng@morganstanley.comBetty Chen +852 2239-7689

Research Associate

Betty.H.Chen@morganstanley.com +852 2239-7213

We preview Xiaomi's 2Q26 results and expect strong Gary Yu

smartphone shipments and gross margin. Meanwhile, the game Equity Analyst

Gary.Yu@morganstanley.com +852 2848-6918

revenue is facing industry headwinds. We continue to expect

overall revenue and earnings in line with our estimates.

Key Takeaways

We expect Xiaomi to achieve historically high smartphone ASPs in 2Q26 to pass Xiaomi Corp (1810.HK, 1810 HK)

through rising costs. Top Pick

Latest Omdia data suggest Xiaomi shipped 31.2 million smartphone units in 2Q26, Greater China Technology Hardware | China

15% higher than our expectation. Stock Rating Overweight

Industry View In-Line

Thanks to rising ASP and resilient volume, we think smartphone gross margin Price target HK$32.00

Up/downside to price target (%) 11

could remain above 8% in 2Q26. Shr price, close (Jul 31, 2026) HK$28.78

52-Week Range HK$59.90-21.30

However, due to slowing game industry grossing, Xiaomi's game revenue could be Sh out, dil, curr (mn) 26,695

weaker-than-expected. Mkt cap, curr (mn) US$97,971

Avg daily trading value (mn) US$850

We believe the company's aggregate revenue will exceed Rmb100bn while Fiscal Year Ending 12/25 12/26e 12/27e 12/28e

recurring net profit could reach ~Rmb6bn in 2Q26. EPS (Rmb)** 1.47 0.89 1.27 1.85

Revenue, net (Rmb bn) 457.3 438.9 533.8 646.2

EBITDA (Rmb bn) 38.2 21.6 36.6 56.4

ModelWare net inc 41.6 16.2 25.2 39.6

(Rmb bn)

P/E 22.6 40.3 26.0 16.5

Unless otherwise noted, all metrics are based on Morgan Stanley ModelWare

framework