The Xiaomi YU7 has become a bestseller since its launch! Will the stock price soar again?

Amid widespread anticipation, $XIAOMI-W(01810.HK)$ the YU7 has finally been unveiled.

Yesterday, Xiaomi launched the all-new YU7 Cars. After the launch, Xiaomi quickly reported a crazy "battle report"—in 3 minutes, pre-orders surpassed 0.2 million units, and in 1 hour, 0.289 million units were ordered, setting the record for the fastest orders in the history of New energy Funds. This means it will become a milestone in the history of China's automotive development that will be difficult to surpass in the short term.

According to the latest announcement from Xiaomi's official Weibo account, in just 18 hours since sales began, the locked order volume for the Xiaomi YU7 has surpassed 0.24 million units.

In terms of stock price, Xiaomi's stock briefly hit a historic high today but then fluctuated slightly and closed up over 3%. However, looking back to a year after the launch of the SU7, Xiaomi's stock price soared by 240%, sparking market speculation.

How explosive is the YU7's performance?

To get straight to the point, the Xiaomi YU7 is available in three versions: the standard version priced at 0.2535 million yuan; the Pro version priced at 0.2799 million yuan; and the top-tier Max version priced at 0.3299 million yuan.

Looking at the current large order situation: the YU7 reached 200,000 units in just 3 minutes, and surpassed 289,000 units in the first hour, which is quite remarkable and greatly exceeds market expectations.

Reviewing last March, when Xiaomi Cars launched their first product, the SU7, it caused a sensation. At that time, after 4 minutes of sales, the large orders surpassed 10,000 units, exceeded 20,000 units in 7 minutes, surpassed 50,000 units in 27 minutes, and 88,000 units within 24 hours.

The YU7 surpassed 289,000 units in the first hour, which is already more than the total delivery volume of the SU7 since its launch last year.

However, it is worth noting that Xiaomi Cars' understanding of 'large orders' differs from the industry norm. The Xiaomi SU7 requires a deposit of 5,000 yuan, which can be refunded within 7 days; if not refunded in time, the order is locked, and the deposit becomes non-refundable. In the industry, a 'small order' is refundable at any time, while a 'large order' refers to a non-refundable order.

More intuitively, Citigroup had previously predicted that there was only a 6% chance that Xiaomi's YU7 would reach 250,000 orders within the first 24 hours, while the official announcement showed that it already surpassed 289,000 units in the first hour, greatly exceeding Citigroup's expectations.

In terms of price, the starting price of 253,500 yuan is exactly 10,000 yuan cheaper than$Tesla (TSLA.US)$ the Model Y. Before the YU7's release, Lei Jun stated that they wanted to 'challenge the Model Y's sales in the domestic market' — in 2024, the Model Y's sales in the Chinese market exceeded 480,000 units, making it the best-selling model globally, regardless of price or energy form.

What do the institutions think?

CICC released a research report stating that considering the strong demand for the Xiaomi YU7 surpassing expectations, it has raised the adjusted net profit forecast for 2025/2026 by 2%/17% to 49.048 billion yuan/66.384 billion yuan, with the current stock price corresponding to a PE of 28.0/20.4 times for 2025/2026. The rating of outperforming the industry is maintained, and considering the adjustments in profit forecasts and the upward shift in industry valuation centers, the target price has been raised by 9.9% to 76.9 HKD (based on SOTP valuation), corresponding to a PE of 37.8/27.5 times for 2025/2026, indicating an 35.1% upside potential.

The firm believes that the strong demand for the Xiaomi YU7 reflects consumer recognition of Xiaomi's high cost-performance products, combined with brand potential showcasing strong product capabilities and breaking through market barriers, thereby creating new demand through supply.

Additionally, CICC also stated that the number of orders for the Xiaomi YU7 exceeded expectations, and the launch of the first AI glasses and other new products is expected to continually strengthen brand momentum. Looking ahead, the firm is bullish on Xiaomi's commitment to the four core strategies of 'scale ecologicalization + technology hardening + brand premiumization + market globalization', which, along with the continuous optimization and integration of the 'human-car-home ecosystem' at the user level and underlying systems, may further enhance its important entry positions in various hardware fields such as Mobile Phones, Cars, IoT, AI Glasses, and Robotics.

Citibank stated that orders have exceeded most buyers' expectations and may surpass the related expectations of southbound funds, which would positively impact stock prices. Analyst Kyna Wong and others mentioned in the report that orders for the YU7 will help Citibank achieve its goal of 0.4 million electric vehicles shipped for Xiaomi this year, and further plans for electric vehicle production expansion could boost investor confidence. The next catalyst is the performance report or guidance for the second or third quarter of 2025.

Citibank also believes that the YU7 not only has a positive impact on Xiaomi but also benefits related suppliers like Hesai Technology, Contemporary Amperex Technology, and NVIDIA, while negatively affecting Tesla and Xiaopeng, and having a slight negative impact on Li Auto. Furthermore, Tesla, as a major competitor, is expected to potentially reduce prices further; FSD features may be offered for free, the zero-interest loan period may be extended to 7 years, and more gifts and financing benefits could be provided.

Additionally, due to the YU7 attracting more attention, the pricing of Xiaopeng's G7 may be lowered to 0.21 million yuan to maintain competitiveness and attract more attention. It is also anticipated that the YU7 will not impact the Li Auto i8, but it will affect the i6, which may need to set its pricing at around 0.25 million yuan, possibly leading to reductions in L6 pricing to avoid internal competition.

Goldman Sachs published a report stating that Xiaomi officially released the highly anticipated YU7, with order volume reaching 0.2 million within the first 3 minutes of sales (of which over 0.122 million orders have been confirmed) and reaching 0.289 million within the first hour. Although the 5,000 yuan deposit for orders can be refunded within 7 days (consistent with the release of SU7), and a small portion of the orders came from unfulfilled orders from SU7, it is still believed that consumer demand for the Xiaomi YU7 far exceeds the firm's and market expectations, which should solidify Xiaomi's leading position in the Chinese high-end car market. The target price has been raised from 65 yuan to 69 yuan, maintaining a 'Buy' rating.

CMB International stated that Xiaomi held a launch event for "Human × Car × Home Ecosystem" last night, officially introducing three highly anticipated products, including the Xiaomi YU7, folding phone MIX Flip 2, and Xiaomi AI glasses, with a very positive market reaction. Regarding the YU7 SUV, this Institution believes the starting price of 0.2535 million yuan essentially meets expectations, and the YU7's reservation volume of 0.289 million units within the first hour far exceeded the SU7's first-day 24-hour reservation volume of 0.089 million units in March 2024. The Institution believes there is further upside potential in its forecast of 0.36 million EV shipments in 2025. In regards to Xiaomi's first AI glasses, the Institution holds an optimistic view, as the product is equipped with a 12 million pixel camera, long-lasting battery, and built-in super Xiaomi AI assistant. The Institution expects the starting price of 1,999 yuan will receive a positive market response.

Overall, the Institution believes the YU7 marks Xiaomi's ambition for expansion in the car business, while the MIX Flip 2 and AI glasses showcase Xiaomi's outstanding execution in the high-end consumer technology sector. Reaffirming the 'Buy' rating due to its premium strategy, new retail channels, IoT overseas expansion, and strong development momentum in smart electric vehicles. Future stock price catalysts include YU7 sales ramp-up, AIoT monetization, and expansion of overseas channels.