Free Issue No. 18 of 03.09.2020
Our recommendation of 21 May (at EUR 1.48) has continued to soar in recent days. As recently as 23 July, we wrote: "A first engine has already ignited". And today, at +76%, we are probably already talking about the second ignition! Considering that certain rockets have a four-chamber engine, our current price target on the stock of the technology company XIAOMI may soon be "approached". Of course, with such performance, the cautious investor can always pull the parachute and "get out". However, we remain invested for the following reasons:
Demand for high-end smartphones has given the Chinese vendor a big boost in sales. Although XIAOMI sold fewer smartphones overall, it was able to increase the number of high-priced devices by almost +100%! In our view, a big plus is also the broad diversification within the group and thus a reduced dependence of smartphone products... "it is enough for the individual homo sapiens to depend on this technical accessory". So XIAOMI also produces many different electronic devices for everyday life; a look at the range of products on the homepage is worthwhile. Furthermore, XIAOMI benefits from the trade conflict between the US and China, of all things.How come? Quite simple: Due to the difficulties of the network equipment supplier Huawei as well as the threatening restrictions of the video platform Tiktok and the online retailer Alibaba, the device manufacturer XIAOMI profits in the home market. Business is also booming in Europe: in individual regions, sales rose by up to +116% in Q2; in terms of smartphone sales, XIAOMI ranks first in Spain, second in France and fourth in Germany.
All in all, Q2 profits rose by a whopping +130% to EUR 552 m. The growth story is in place, as is our price target (interim target?) of EUR 3!
