[ET Net News Agency, 28 November 2019] Credit Suisse raised its target price for Xiaomi
Corporation (01810) to HK$10 from HK$9.6 and maintained its "neutral" rating.
The research house said Xiaomi's 3Q revenue was in line with its expectation, but the
adjusted net income beat on better-than-expected smartphone GM (gross margin) of 9%
(versus 2Q's 8.1%), partly offset by higher R&D expenses.
Management expects 5G penetration to reach 40-50% in China next year where it will
launch over ten 5G models. GM to remain stable around 8-9% in 4Q 2019 and into 2020.
Credit Suisse raised its 2019/20/21 EPS estimates by 10%/6%/4% to factor in higher GM
but partly offset by higher R&D expenses. (KL)