Wall Street "grass" millet car

Millet SU7 electric car after the release of the heat continued to not retreat, 24 hours of large 88898 units, as of March 31 afternoon the number of lock orders (the number of non-cancelable) reached 20,000.

Goldman Sachs and jpmorgan Chase recently released a research report said that optimistic about millet's electric vehicle strategy, Goldman Sachs predicted that SU7 will become one of the top three high-end cars in China, the average monthly sales will exceed 10,000 units, economies of scale to improve profitability, millet target stock price from 18.9 HK $to 20.0 HK $.

Goldman Sachs bluntly, boosted by electric vehicle sales, it is expected that Xiaomi's revenue in 2024-2026 will increase by 2-6%, reaching 100,000, 170,000 and 326,000 units, respectively, accounting for 1.0%, 1.5% and 2.5% of China's new energy vehicle retail sales. By 2030, electric vehicle revenue is expected to account for 30% of Xiaomi's total revenue.

Jp Morgan also reiterated its "overmatch" rating on Xiaomi, saying that from the brand ecology that Xiaomi has developed over the years, its strong ecosystem established through the smartphone business will attract young Chinese trolley buyers, Xiaomi Group's overall balance sheet is strong, able to provide sufficient financial support for the automotive business, and a high degree of automation will also help accelerate the improvement of Xiaomi's profitability.

Today, the future of the electric vehicle industry has become very clear. The international environment has vigorously promoted carbon reduction, which has brought heavy challenges to the traditional fuel vehicle industry, and new energy vehicles have been sought after around the world. In this context, Wall Street crocodiles have been optimistic about Xiaomi automobile, Goldman Sachs regards it as a first-line brand in China, and jpmorgan Chase is emphasizing that Xiaomi not only compets in price and configuration, but also has advantages in brand and balance sheet. Why is Xiaomi so highly valued by Wall Street? Let's break it down step by step.

First, let's be clear that Xiaomi's entry into the automotive industry was not a whim decision, but part of its long-term strategy. As a global leading technology company, Xiaomi has the world's top research and development capabilities and technology accumulation, and has a deep foundation in AI, cloud computing, big data and other fields, which are key factors in the development of new energy vehicles. Entering the automotive industry, Xiaomi is combining its own advantages with the needs of new energy vehicles to open its exploration and practice in new fields.

Secondly, Xiaomi's strength in the automotive industry is undeniable. Whether it is in price and configuration, Xiaomi automobile has shown high cost performance, and its product competitiveness can withstand the increasingly fierce price competition in the automobile market. More importantly, Xiaomi has brought cutting-edge technology into the automobile industry in the fossil fuel era, achieved product differentiation and optimization, and can meet consumers' expectations for advanced energy vehicles, and won market recognition and welcome.

At the same time, the competitiveness of the product itself is only the tip of the iceberg, and whether Xiaomi can occupy a place in the new energy vehicle market depends on its brand and operation. Goldman Sachs and jpmorgan Chase's optimism about Xiaomi cars is actually a recognition of Xiaomi's overall strength. On the one hand, Xiaomi's strong brand influence can attract consumers to buy Xiaomi cars.

On the other hand, Xiaomi's good balance sheet can ensure its continued investment in the automotive industry and launch competitive products. Xiaomi has abundant cash flow on hand (about 110 billion yuan as of the fourth quarter of 2023); Xiaomi's core business (i.e. non-electric vehicle business) is expected to generate EBITDA(earnings before tax, interest, depreciation and amortisation) of Rmb20bn and Rmb18bn in fiscal year 2024 and 2025, respectively. From this point of view, the strong competitiveness of millet cars is not out of nowhere, but built on a solid foundation.

The focus on Xiaomi cars also reflects Wall Street's optimism about the prospects of the new energy vehicle market. The automotive industry is transitioning from the era of fossil fuels to the era of electric vehicles, and new energy vehicles have become a new growth point in the global automotive market. The reason why Wall Street is optimistic about millet car is actually optimistic about the huge potential of the new energy vehicle market and the competitive advantage of "millet" in this market.

In general, it is not difficult to explain why Wall Street is focused on Xiaomi cars. On the one hand, Xiaomi has shown strong competitiveness in the new energy vehicle market, and on the other hand, the broad prospects of the new energy vehicle market. In the face of such a future unlimited market, whether it is Wall Street, or consumers, are full of expectations.

It is believed that Xiaomi Automobile can play an important role in the new energy vehicle market, promote the technological progress and environmental protection and carbon reduction of the global automotive industry, and lead the development trend of new energy vehicles in the future.