Xiaomi investors are being asked to hold two ideas at once: that the company’s push upmarket will eventually pay off, and that the near-term numbers will look ugly. Two brokerage notes this week captured that tension, with Daiwa raising its target on premium-smartphone optimism while Citi kept its buy rating intact even as it penciled in a steep earnings decline.
Daiwa lifted its price target to HK$35 from HK$30 and reiterated its buy call, pointing to Xiaomi’s sharper focus on the premium end of the smartphone market. Higher average selling prices and a refreshed lineup should underpin the business, the bank argued. It nudged its 2027–2028 earnings-per-share forecasts up by just 1%—a modest tweak that sits somewhat awkwardly beside the more confident target.
That gap matters. The reasoning behind the upgrade is more instructive than the number itself, because it names the mechanism investors can actually track: Xiaomi has to earn more from each handset it sells. The global rollout of the Xiaomi 18 Pro series, slated for November, gives that thesis a concrete testing ground.
Citi Sees a Sharp Profit Fall—and Better Margins
Citi’s take on the third quarter of 2026 is far gloomier on the bottom line. The house expects an adjusted net profit of RMB 4.8 billion, a 58% slide from a year earlier. Yet it also expects average smartphone selling prices and margins to come in ahead of its own forecasts—a combination that keeps the buy rating in place despite the profit hit.
The two banks are effectively describing the same wager from different angles. Daiwa emphasizes the upside from premium positioning; Citi acknowledges the near-term earnings pain but sees margin resilience underneath it. For shareholders, the question is whether richer selling prices translate into fatter margins—not merely a better-stocked product shelf.
A Sector Rally Did Some of the Heavy Lifting
Xiaomi’s shares got a lift on Thursday from a broad rebound in Chinese technology names, with China Daily reporting a rotation into the sector and a previously downbeat positioning among investors. The move was part of a market-wide swing rather than a company-specific story, though firm-level news lent a hand. On Friday the stock added 0.7%.
Media reports pointed to improving sentiment on overseas markets after the US midterm results and a shift out of AI-related names, with money flowing toward cheaper Chinese internet and consumer stocks. Xiaomi’s October deliveries were cited as a supporting company factor—not the sole trigger for the advance.
Should investors sell immediately? Or is it worth buying Xiaomi?
Deliveries Keep Setting the Pace
Those delivery figures are worth dwelling on. Xiaomi reported more than 50,000 electric vehicles delivered in October, which Reuters described as the highest monthly tally of the year. Deliveries over the first ten months reached roughly 336,000 vehicles, against a full-year 2026 goal of 550,000.
Robotics offers a longer-range technological angle. Xiaomi said Wednesday that a humanoid robot worked an eight-hour continuous shift at a sorting station in one of its own car plants—a first. An agent system built on Xiaomi Robotics-1 also completed a trial run in an employee apartment, covering more than 50 tasks across three rooms. Such milestones would matter for a long-term re-rating only if they turn into reliably usable applications.
The Margin Is the Real Scorecard
The case for a durable, company-specific re-rating rests on execution. If premium demand holds and margins improve, Daiwa’s thesis gains operating support, and the international launch could become the next piece of evidence that Xiaomi can run its handset business more profitably. If margin gains fall short, the rationale behind the higher target weakens considerably.
Pure shipment momentum would say less about this particular thesis than the earnings Xiaomi extracts from each device. Investors already betting on the premium story are tied to how well it is delivered—and the product launch carries its own expectations risk.
November Brings the Verdict
Two dates now anchor the calendar. The Xiaomi 18 Pro series goes global in November, and on November 24 the board is due to review and approve the unaudited third-quarter 2026 results, alongside the figures for the nine months to September 30, 2026.
Those numbers will frame the recent trading performance; the new models will then be judged on whether they support the improvement investors have been promised. The bullish scenario looks most convincing if product demand and profitability move forward together.
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