【中金科技】小米集团（01810.HK）：手机和IoT智能硬件的大年；重申跑赢行业评级

科技硬件FLAG · 公众号 · · 2021-03-25 09:41

正文

4Q20 results in line with our forecast

Revenue at Xiaomi Corp rose 24.8% YoY in 4Q20 to Rmb70.5bn, missing our forecast by 4% due to weak internet of things (IoT) shipment. Non-GAAP net profit rose 36%YoY to Rmb3.2bn, in-line with our forecast. GPM increased 2.2ppt YoY (2.0ppt QoQ) in 4Q20 to 16.1%, the highest figure since 2017. We believe that 2021 will be abig year for Xiaomi’s smartphone and artificial intelligence +IoT (AIoT) devices. With the shipment of hardware in 2021, we think that internet services will be back to strong growth in 2022.

Trends to watch

Smartphones: Strong growth to continue. Smartphone shipment at Xiaomi rose 32% YoY in 4Q20 to 43.3mn, outperforming the global smartphone market, which rose 4.3%. ASP rose 4%YoY and GPM climbed 2.1ppt QoQ to 10.5% due to better product mix, as shipment improved in the premium-end market. We still expect Xiaomi to ship 198mn smartphones globally in 2021, with revenue growing 45% YoY, thanks to a better competitive landscape following Huawei’s decline and signs that COVID-19 will ease globally. We now forecast smartphone revenue to grow 45% YoY in 2021 with ASP rising 8% YoY.

IoT and lifestyle products: AIoT to be a key business in 2021. Xiaomi’s IoT revenue increased only 9% in 2020, as it was negatively affected by COVID-19. We believe this section will return to strong growth in 2021, with more products – such as TVs and IoT small home appliances – entering the overseas market. We still expect revenue in 2021 and 2022 to grow 38% and 48% YoY.

Internet: Weak revenue growth but GPM strong in 2021; positive on 2022. Internet services revenue rose only 8% YoY in 4Q20 to Rmb6.2bn. Given weak growth in low margin businesses, we cutour 2021 and 2022 internet revenue forecasts 18% and 15% to Rmb27.3bn and Rmb36.3bn. We raise our GPM forecasts 4ppt and 5ppt, expecting the high GPM advertising business to make a larger revenue contribution. We expect internet services to return to 33% growth in 2022, as MAU and ARPU should return to growth in 2H21.

Financials and valuation

We trim our 2021 and 2022 revenue forecasts 1% and 2%. The stock is trading at 28.6x 2021and 22.6x 2022 non-GAAP P/E. We maintain OUTPERFORM and our TP of HK$34.00 (38.9x and 30.7x 2021 and 2022 non-GAAP P/E), offering 36.0% upside from the current price.

Risks

COVID-19 may still affect smartphone sales and demand.

Figure 1: 4Q20 and 2020 review