By Jiahui Huang

Xiaomi's shares hit a new intraday high in Hong Kong as optimism grew over the earnings outlook for the Chinese consumer-electronics specialist this year.

The stock rose as much as 6.2% to 43.05 Hong Kong dollars, equivalent to US$5.53, early Friday before paring the gains to about 4.5% in afternoon trading.

The advance comes as analysts have reiterated their positive view on the company, saying they expect China's broadened trade-in program for consumer goods to boost sales of Xiaomi smartphones and consumer electronics in 2025.

The expanded subsidy program to encourage consumers to upgrade electronics, home appliances and smartphones will likely be a tailwind for Xiaomi, HSBC Global Research analysts said.

Xiaomi's Internet-of-Things devices business also stands to benefit from recent breakthroughs in artificial intelligence, HSBC said in a note. Several analysts have said that Chinese startup DeepSeek's reportedly cheap yet powerful model and its open-source nature could help lower the costs of AI adoption in businesses involved in AI technologies.

HSBC Global Research has a buy rating on the stock, with a raised target price of HK$49.90.

Xiaomi has also experienced early success with its foray into China's crowded and competitive electric-vehicle market. Sales of its first car, the battery-electric SU7, have been robust, and Xiaomi is scheduled to launch the SU7 Ultra, a high-performance variant aimed the premium market, at the end of February. That could serve as the next catalyst for the stock, according to HSBC.

Xiaomi Chief Executive and founder Lei Jun said in Weibo posts this week that the company targets selling more than 10,000 SU7 Ultras this year and is working to boost the production capacity of its EVs.

The smartphone maker is also slated to release the Xiaomi 15 Ultra, a premium model, later this month.

Write to Jiahui Huang at jiahui.huang@wsj.com

(END) Dow Jones Newswires

February 07, 2025 00:50 ET (05:50 GMT)

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