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4、rtification on page 10.Price Objective Basis/Risk on page 10.12862380 Xiaomi Corporation 2Q preview:solid IoT offsets smartphone;sustainable EV demand=upside potential Reiterate Rating:BUY|PO:69.00 HKD|Price:54.00 HKD 2Q preview:stronger IoT offsets softer smartphone We expect Xiaomis 2Q real operat

5、ing profit(after SG&A,R&D)to reach CNY9.6bn(-3%QoQ,+66%YoY)as we slightly cut revenue by 3%to CNY114bn(+3%QoQ,+29%YoY),on top of slower smartphone shipment.However,we expect GM to grow by 0.3ppt QoQ to 23.1%,thanks to higher IoT sales mix.We raise our 2Q adjusted earnings estimate to CNY10.5bn(-2%Qo

6、Q,+70%YoY)as we reflect non-cash items,such as share-based compensation.Higher overseas smartphone;robust home appliance According to Canalys,Xiaomis global smartphone shipments in 2Q reached 42.4mn units(+1%QoQ,flat YoY),and its China shipments were 10.4mn(-22%QoQ,+4%YoY).This indicates that mix fr