The bank said smartphone shipments reached 31.2 million in the second quarter, 15% above its forecast, supporting expectations for strong margins and about 6 billion yuan in recurring net profit.
Xiaomi is expected to post more than 100 billion yuan in second-quarter revenue when it reports earnings on Aug. 18, with recurring net profit seen at about 6 billion yuan, according to a Morgan Stanley research note. The bank said the outlook is being driven by stronger-than-expected smartphone performance, citing Omdia data showing second-quarter shipments of 31.2 million units, 15% above its estimate. Morgan Stanley expects smartphone gross margin to stay above 8% in the quarter as record-high average selling prices and resilient shipment volumes help offset rising costs through pricing. The bank maintained its Overweight rating on Xiaomi and a target price of HK$32.