SU7 is released, and the company's stock price soars. Can Xiaomi's car win its first battle? Let's w

Hi, everyone!

Today, I want to share with you a piece of news that has garnered much attention:

On March 28, Xiaomi will officially launch its first car, the Xiaomi SU7, and announce its price. Lei Jun has been preparing for this day for over 1000 days.

This news is truly exciting, and for technology and car enthusiasts, it is a long-awaited moment.

The upcoming release of the Xiaomi car has triggered a strong market reaction, with Xiaomi Group-W (01810) stock price roller-coasting. After the official announcement of the SU7 release date on March 12, Xiaomi Group’s Hong Kong stock price surged, at one point increasing by 12.39%. As of the closing on March 22, Xiaomi Group’s stock price stood at 14.80 HKD per share, with a total market capitalization of 369.2 billion HKD.

From the BiyaPay App, we can see the trend of Xiaomi’s stock price (as shown below), which indicates the market’s recognition of the potential value of Xiaomi’s car. Meanwhile, the concept stocks of Xiaomi’s car also experienced speculative gains, showing investors’ optimism about this emerging field.

What can I say? Xiaomi’s car has been talked about a lot and awaited for a long time.

However, this time, 55-year-old Lei Jun is staking his entire reputation for Xiaomi’s car!

Lei Jun achieved financial independence in 2004 and went public with Kingsoft in 2007. Meanwhile, the iPhone revolutionized the traditional phone market, and Lei believed he should do something more meaningful, quickly positioning his startup in the mobile phone sector, challenging Nokia, Samsung, and the widespread domestic counterfeit phones. Xiaomi Mobile was established in 2010, entering the market with an internet and capital mindset, focusing not on profit margins but on fan engagement and user base, attracting a large number of Mi fans and breaking through successfully. Xiaomi Mobile became the top in China’s mobile phone shipments within just three years and successfully listed on the HK market in 2018. Early Xiaomi investor Morningstar Capital made nearly a thousand times profit, turning 5 million USD into 5 billion USD, with additional funds of 150 million USD, reaching a market value of 10 billion USD.

In January 2021, the US-China trade war led to Xiaomi being blacklisted in the US, marking a “dark moment” for Xiaomi as its stock price plummeted by 80 billion HKD in one day. Therefore, Xiaomi decided to enter the new energy electric vehicle market to protect against unconventional attacks in the mobile phone industry. Lei once said, “A good company always follows the trend.” I don’t know if this logic is correct, but each entrepreneur is different, and Xiaomi has demonstrated its capability in seizing market opportunities.

By March 25, 2024, 59 Xiaomi car stores in China officially opened, with many experiencing extraordinary popularity, as everyone wanted to see what Xiaomi’s cars were like. Details about the interior and price of the Xiaomi SU7 are still confidential and will be unveiled at the press conference on March 28 at 19:00 China time.

What everyone is most concerned about is the price. After all, Lei Jun once joked that 199,000 RMB was a playful price, indicating that the actual price might be in the range of 300,000 to 400,000 RMB. However, this price is not the core demand price for Mi fans, whose acceptance limit is around 200,000 RMB.

Moreover, Lei Jun, like a seasoned negotiator, said, “The Xiaomi SU7 is the best looking, best driving, and smartest sedan under 500,000.” This sets high price expectations, and a direct price reduction at the launch event would not be surprising. Hence, Xiaomi’s stock price has been relatively stable these days, waiting for the launch event.

Currently, the entire capital market is waiting for this Xiaomi launch event. It’s like watching an adventure of the brave, rarely do people show so much attention and passion for a company’s new product, but Xiaomi and Lei Jun have expertly captured the public’s interest with their restrained approach.

In essence, investment is the story of one entrepreneur choosing another.

Returning to Xiaomi itself, if you are part of it, will the stock price soar after the car launch?

For Xiaomi’s first car, it is crucial to win in sales. Currently, the competition in China’s electric car market is intense, with competitive products like BYD Qin and others. What many people are waiting for is the price.

As a new entrant in the car-making field, Xiaomi’s first car, built by 3,400 engineers at a cost of 10 billion RMB, with Xiaomi’s current cash reserve of 136 billion RMB, is estimated to last for 5 years.

According to Xiaomi Group’s latest financial report released in March 2023, the net profit reached 19.3 billion RMB, an increase of 126.3% year-on-year. The mobile business is doing well, and it is worth watching the Xiaomi press conference to see if the car business can bring another 20 billion RMB in revenue and double the stock price.

Regarding investment advice, we suggest that investors analyze from a comprehensive news, fundamental, and technical perspective. We believe that Xiaomi Group has short-term upside potential and recommend that investors pay attention and buy on dips. You can monitor market trends regularly on the BiyaPay App and buy at the right time. If you want to buy on dips, just search for its code on BiyaPay for real-time online trading. You can also deposit digital currency (USDT) into BiyaPay and then withdraw fiat currency to invest in US stocks.

In the long term, Xiaomi Group’s layout in the new energy vehicle sector and its market share in smartphones and smart home areas provide strong support for the company’s sustained development, thus offering long-term investment value. However, investors should also pay attention to market dynamics and company operational risks when making investment decisions.

Without a doubt, the launch of Xiaomi’s car is one of the most anticipated events recently, with a highly anticipated market prospect, but also with certain uncertainties. Only time will reveal the answers, so let’s wait and see!