Pedestrians walk past a Xiaomi store in Shenyang, Northeast China’s Liaoning Province. Photo: VCG

 
Citigroup has maintained the “buy” rating for Chinese tech company Xiaomi Group, indicating a positive outlook for Xiaomi’s growth in the smartphone market in 2024, backed up by Xiaomi’s rising international market share and an enhanced product portfolio. 

The latest announcement by US investment banks such as JPMorgan and Citigroup showed that they could increase or advise their clients to ramp up their stock holdings of Xiaomi and other leading Chinese tech companies, analysts said. 

The Chinese government is making greater efforts to attract and utilize foreign investment. On Tuesday, an action plan released by the State Council, the cabinet, highlighted the importance of foreign investment in China's modernization and economic development and pledged to attract and utilize foreign investment more effectively, by directing more foreign investment into advanced manufacturing and tech innovation.

According to a recent research report released by Citigroup, Citi maintained a “buy” rating on Xiaomi setting a target price of HK $19.6, anticipating many potential growth drivers for the company in 2024. Investors are gauging Xiaomi's growth potential and market competitiveness, including AI opportunities and electric vehicle sales.  

Citi’s optimism was based on Xiaomi's solid financial performance in the fourth quarter of 2023 and the new product launch at the Mobile World Congress (MWC) in Barcelona, Spain. Citi's report may point to the resilience of Xiaomi's share price in the near term, analysts said. 

Xiaomi’s latest financial results report revealed a 10.9-percent rise in revenue and net profit of 4.9 billion yuan ($680.61 million) in the fourth quarter, increasing 236.1 percent year-on-year, beating broad market projections.

The upbeat financial results are a welcome boost for Xiaomi as the company is making a multibillion-dollar effort to break into the very competitive Chinese electric vehicle (EV) market, dominated by BYD, Tesla, and a flurry of other Chinese brands.

Xiaomi founder Lei Jun presided over the opening of Xiaomi's super vehicle factory on Tuesday. He said that the Xiaomi SU7 vehicle is set for a March 28 launch after three years of development.

Apart from Xiaomi, Citigroup remained bullish on another Chinese electric car maker BYD. Last week, the research arm of Citigroup issued a research report indicating an upside 90-day catalyst watch for BYD, with a target price for the company's shares at HK$463 and a “Buy” rating.

More foreign financial institutions are upbeat on Chinese tech companies. The world's leading asset managers Brookfield and KKR recently moved to expand their investment portfolios in China, boosted by their growing confidence in Chinese assets.

Global Times