Xiaomi ADRs jump over 7% to $23.4 in premarket, reaching a new high.

XIAOMI-W is expected to ramp up its electric vehicle production capacity this year, Morgan Stanley analysts said in a note, after the Chinese tech giant logged stronger-than-expected deliveries in 2024. 

Xiaomi Corp hiked its 2025 delivery target to 300,000 units from 250,000 units, after delivering over 135,000 in 2024, which was higher than its annual delivery target. 

Morgan Stanley said the company is likely to further increase its production capacity, necessitating a further increase in its delivery target for 2025. Increased EV offerings from the firm- with its SU7 Ultra and YU7 models set to launch later in the year- will provide a “positive product mix change” in the year, MS said. The new models are also expected to have higher average selling prices than Xiaomi’s current offerings. 

“Xiaomi's stronger-than-expected delivery volume in 2024 and higher shipments target in 2025 implies excellent execution in the new EV business, in our view. We maintain our positive view and believe upward revision is likely in 2025,” MS analysts said in a note.

The investment bank rates Xiaomi as Overweight with a price target of HK$35- implying an upside of 1% from current levels. 

Xiaomi- which is known for its electronic devices- is a new entrant to the highly competitive Chinese EV market, having launched its flagship SU7 in early-2024. 

But the company was able to capture a sizable market share despite its relatively new entry into the sector. Xiaomi has flagged plans to become one of the world’s largest EV makers. 

China is the world’s biggest automobile market, with EVs accounting for a big chunk of sales in the country. But this has also sparked a dire price war between local manufacturers to capture the most market share. 

EV giant Tesla recently clocked its first annual fall in deliveries due to heightened competition in China, as well as sluggish EV demand in the rest of the globe.