The Xiaomi YU7 was an instant hit upon its launch! Will the stock price soar again?

In 3 minutes, the pre-orders exceeded 0.2 million; in 1 hour, they approached 0.29 million!

Amid much anticipation, $XIAOMI-W (01810.HK)$ the YU7 finally revealed itself.

Xiaomi released the brand new YU7 Cars yesterday. After the launch, Xiaomi quickly submitted a crazy "battle report" — in 3 minutes, pre-orders broke through 0.2 million units, and within 1 hour, pre-orders reached 0.289 million units, setting the record for the fastest order in the history of New energy Cars. In other words,This will become an unexceeded milestone in the history of Cars development in China in the short term.

Xiaomi Cars' official account recently stated that after 18 hours of sales,The order volume for Xiaomi YU7 has surpassed 0.24 million units.

In terms of stock price, Xiaomi's stock price today once exceeded its historical high, but subsequently fluctuated slightly and weakened, ultimately closing up over 3%. However, looking back at the year following the release of the SU7, Xiaomi's stock price skyrocketed by 240%, which sparked the market's imagination.

How explosive is the performance of the YU7?

To get straight to the point, Xiaomi's YU7 is divided into three versions, with the standard version priced at 0.2535 million yuan; the Pro version priced at 0.2799 million yuan; and the top-level Max version priced at 0.3299 million yuan.

Looking at the situation of firm orders:This time, the YU7 exceeded 200,000 units in firm orders within 3 minutes, and broke through 289,000 units in one hour.This is quite remarkable and significantly exceeds market expectations.

Looking back at March last year, when Xiaomi Cars launched its first product, the SU7, it had already ignited the entire scene.At that time, after 4 minutes of SU7's sale, it broke through 10,000 units in firm orders.After 7 minutes of sale, it broke through 20,000 units in firm orders, and after 27 minutes, it exceeded 50,000 units in firm orders, reaching 88,000 units within 24 hours.

And the YU7 surpassed 0.289 million units in 1 hour, already exceeding the total delivery volume of all SU7s since last year's launch.

However, it is worth noting that Xiaomi's understanding of a "large deposit" differs from the industry's common understanding. The Xiaomi SU7's 5,000 yuan large deposit can be refunded within 7 days, and if this period is exceeded, the order will be automatically locked, making the deposit non-refundable after locking. In the industry, the common understanding is that a "small deposit" can be refunded at any time, while a "large deposit" is for non-refundable orders.

More intuitively, Citi previously predicted that the probability of orders for the Xiaomi YU7 within the first 24 hours would only be 6% to reach 0.25 million units, but the number exceeded 0.289 million units within the first hour, far surpassing Citi's expectations.

From the price perspective, the starting price of 0.2535 million yuan is exactly 0.01 million yuan cheaper than $Tesla (TSLA.US)$ the Model Y. Before the YU7's release, Lei Jun mentioned the goal to challenge the sales of the Model Y in the domestic market.In 2024, the Model Y is expected to achieve sales exceeding 0.48 million units in the Chinese market, making it the global best-selling model regardless of price and energy type.

What do Institutions think?

CICC released a Research Report stating that considering that the Xiaomi YU7 pre-orders exceeded expectations, the adjusted net profit for 2025/2026 was raised 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, taking into account the adjustment of profit forecasts and the upward shift in industry valuation central.The target price is raised by 9.9% to 76.9 HKD.(Based on the SOTP valuation method), corresponding to a PE of 37.8/27.5 times for the adjusted net profit in 2025/2026, representing an upside potential of 35.1%.

The institution believes that the Xiaomi YU7 pre-orders exceeding expectations reflect consumers' recognition of Xiaomi's high cost-performance ratio, combined with strong brand positioning demonstrating robust product capability and a breakthrough effect, achieving the effect of supply creating new demand.

In addition, CICC also indicated that the unexpected number of Xiaomi YU7 pre-orders and the launch of the first AI glasses are expected to continuously boost brand momentum. Looking ahead, the institution is Bullish on Xiaomi's adherence to four core strategies: "scale ecological integration + technical robustness + premium brand positioning + global market expansion." In the future, with the continuous integration and optimization of the "people, cars, and family ecosystem" at the user level and underlying systems, the significant entry position in multiple hardware domains such as smartphones, Cars, IoT, AI glasses, and Robotics may further highlight.

Citi stated that the orders have exceeded most buyers' expectations.It is likely to surpass the related expectations of southbound funds, which would be bullish for the stock price. Analyst Kyna Wong and others stated in the report that the orders for the YU7 are favorable for achieving Citi's target of 0.4 million electric vehicles shipments for Xiaomi this year, and further expansion plans for electric vehicle production capacity may boost investor confidence.The next catalyst will be the earnings performance or guidance for the second or third quarter of 2025.

Citi also believes that the YU7 will not only have a positive impact on Xiaomi but will also be bullish for related suppliers such as Hesai Technology, Contemporary Amperex Technology, and NVIDIA. However, it may have a negative impact on Tesla and Xiaopeng, and a slight negative impact on Li Auto. In addition, the bank pointed out that Tesla, as a major competitor, is expected to further reduce prices, FSD features may be offered for free, zero-interest loan terms may be extended to 7 years, and more gifts and financing offers may be provided.

Moreover, as the YU7 attracts more attention, the pricing of the Xiaopeng G7 may be lowered to 0.21 million yuan to maintain competitiveness and attract more attention. At the same time, it is expected that the YU7 will not affect the Li i8 but will impact the i6, which may need to be priced around 0.25 million yuan, or lead to a price reduction for the L6 to avoid internal competition.

Goldman Sachs released a report stating that Xiaomi officially launched the highly anticipated YU7, with orders reaching 0.2 million within the first 3 minutes after sales began (of which more than 0.122 million orders have been confirmed), and reaching 0.289 million within the first hour.Although the deposit for the order of 5,000 yuan (the same below) can be refunded within 7 days (consistent with the release of the SU7), and a small part of the orders come from unfinished orders of the SU7, it is still believed that consumer demand for the Xiaomi YU7 far exceeds the expectations of the bank and the market, which should consolidate Xiaomi's leading position in the high-end car market in China.The target price has been raised from 65 yuan to 69 yuan, maintaining a 'Buy' rating.

Citi stated that Xiaomi held a "Human × Car × Home Ecological" launch event last night, officially introducing three highly anticipated products: the Xiaomi YU7, the foldable phone MIX Flip 2, and the Xiaomi AI glasses, with a very positive market response. For the YU7 SUV, the institution believes that the starting price of 253,500 yuan is basically in line with expectations, and the pre-order volume of 289,000 units within the first hour far exceeded the pre-order volume of 89,000 units of the SU7 on its first day in 24 hours in March 2024. The institution believes that its forecast of 360,000 units of EV shipments in 2025 has further upward potential. Regarding 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 Xiao Ai AI assistant, and the starting price of 1,999 yuan is expected to receive positive market feedback.

Overall,The institution believes that the YU7 marks Xiaomi's ambition to expand its automotive business.The MIX Flip 2 and AI glasses demonstrate Xiaomi's excellent execution in the high-end consumer technology field. Reiterating the "Buy" rating due to its high-end strategy, new retail channels, IoT overseas expansion, and strong development momentum in smart electric vehicles.Future stock price catalysts include the ramp-up of YU7 sales, AIoT monetization, and expansion of overseas channels.

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