Daily Investment Strategy
Daily focus：Xiaomi Group（1810）
The development prospects for 2025 are optimistic, with revenue growth of more than 30%, net profit growth of more than 40%, mobile phone shipments of 180mn units, ASP increase of single digit, and gross profit margin maintained at 12% to 12.5%. The company promotes high-end transformation, and its smartphone market share returns to the top in the Chinese market. The gross profit margin and revenue of IoT products have increased. Xiaomi expands new retail channels and plans to open 20,000 Xiaomi stores in China by the end of 2025. It also actively expands overseas markets, aiming to double its international business within three years. The electric vehicle business is an important growth engine, with the goal of delivering 350,000 vehicles in 2025 and achieving a break-even in the second half of the year. The company has increased its investment in the research and development of smart driving and automotive chips, and it is expected that the research and development expenses in 2025 will exceed RMB 3bn.
US ADP employment lower than expected
The United States released multiple economic data yesterday showing weak performance, raising market concerns about economic slowdown. The May ADP employment report showed private sector job additions sharply reduced to 37,000, far below market expectations of 114,000, hitting the lowest level in 2 years. The data reflects uncertain economic policy changes affecting employers' willingness to hire. Meanwhile, the May ISM services index plummeted from April's 51.6 to 49.9, below expectations of 52 and falling below the 50 threshold that separates expansion from contraction, marking the first contraction in nearly a year. Among the components, the new orders index plunged from 52.3 to 46.4, the largest monthly decline since June last year, indicating significant pressure on demand. The business activity index dropped to 50, the lowest level in 5 years, reflecting stagnant output growth.
On Wednesday, the Stock Connect program recorded a net inflow of HK$3.52 billion into Hong Kong stocks. Among them, Meituan (3690) saw the largest net inflow, amounting to HK$1.41 billion, followed by Alibaba (9988). On the other hand, Tencent (700) recorded the largest net outflow of HK$1.44 billion, followed by Xiaomi Group (1810).
Leung Kai Tong is a SFC licensed person accredited to KGI Group to carry on regulated activities (for details, please refer to: https://apps.sfc.https://apps.sfc.hk/publicregWeb/indi/ADU276/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.
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