Buy Xiaomi Shares: Analysis, Forecast, Target Price
Published: August 28, 2020 by Valentina
If there is a brand that has grown impressively in a few years, then this is Xiaomi. In a decade, it has become one of the world’s leading mobile device manufacturers, oscillating between third and fourth place. Is this then a good reason to buy Xiaomi shares?
Probably yes, but to buy shares you don’t have to rely only on enthusiasm. To find out if it is really a good investment, you must carefully analyze the asset, the stock market trend, and the growth of the company.
First, you need to use a serious, reliable, and commission-free broker; in this way, you can save and investments become affordable for everyone.
Here are the best online brokers without commissions suitable for buying Xiaomi shares. With eToro, you can also make automatic investments.
Min. Deposit: 50€
Min. Deposit: 100€
Min. Deposit: 50€
Min. Deposit: 100€
Min. Deposit: 250€
Min. Deposit: 100€
Xiaomi: The origins
Xiaomi has managed to conquer the world of electronics and mobile devices. It was founded by eight partners in 2010 and is based in Beijing.
In 2014, they managed to raise nearly $ 1 billion in equity funding with the help of a Hong Kong-based investment group,
This gave them a valuation of nearly $ 45 billion, making them one of the most valuable companies in the world.
Xiaomi has over 16,000 employees and is rapidly expanding around the world.
How to buy Xiaomi shares
To buy Xiaomi shares in a simple and cheap way, commission-free online brokers are the ideal choice.
These intermediaries offer many advantages, including:
- The access to equity investments even with very limited capital (250 Euros)
- Trading without commissions allows you to get profits even from small operations (few Euros)
Online brokers offer contracts called CFDs (Contracts for Difference) that allow you to invest up or down on many stocks and assets and earn (if the prediction is correct) in each market scenario.
To invest securely, however, these brokers must be carefully selected and all those without a regular license must be excluded.
Buy Xiaomi shares with the best brokers
To buy Xiaomi shares, brokers must – at least – have these characteristics:
- Have a FCA, CySEC or equivalent license
- Offer the possibility to invest both upwards and downwards (short selling)
- Don’t charge commissions
- Request a minimum deposit not exceeding 250 euros.
eToro, ForexTB and Trade.com are the online brokers that offer the greatest advantages to buy Xiaomi shares in total safety.
eToro: Semplicity and automatic trading
eToro is the most well-known and used broker in the world. Its 7 million users are a further confirmation of its reliability.
eToro owns numerous operating licenses, also with the FCA.
The eToro trading platform, visible below, is among the most intuitive and simple on the market:
To buy Xiaomi shares just click on the “Invest” button, decide how much to invest in the operation and whether to buy or sell the stock.
The fact that the software is simple doesn’t mean that it lacks dedicated tools. In fact, even the most demanding traders can find on eToro the indicators necessary for a correct and complete technical analysis.
But the most requested service of eToro is its totally unique and free automatic investment system: Copy Trading.
With this tool, you can copy the market operations of the best traders in the world (on eToro) in a totally automatic and free way.
To use Copy Trading just follow these simple steps:
- Register on eToro
- In the section “people”, you can choose the traders to copy based on the performance.
- With a click, Copy Trading will copy exactly the same operations of the chosen traders in your account.
- At this point, you will get the same returns as these trading experts (of course, in proportion to your investment), without doing anything else.
Here are some of the best eToro Traders (that can be copied):
Both Copy Trading as well as traditional trading can also be tested on a free Demo account, without taking real risks.
For more details you can read our full eToro review.
ForexTB: Trading Course and Free Trading Signals
ForexTB is getting more and more famous among traders. Indeed, its free services really make a difference.
Broker’s security is guaranteed by the CySEC license, which allows this operator to offer its services throughout Europe.
ForexTB offers two trading platforms, both free, which respond to every type of investor:
- The web platform is easy to use and can be entered from any browser without downloading any software.
- Metatrader 4 is more technical and full of professional indicators and meets the needs of the more experienced traders.
Those with no trading experience are always looking for a course where to learn how to trade online. ForexTB made it available (in ebook format) for free for everyone.
For investors who need operational support, there are the Free Trading Signals that ForexTB sends to all investors on its platform. These are indications developed by Trading Central and have a 70% success rate. You can access it from the link below:
Trade.com: Free training and minimum deposit
Trade.com stands out for its traders´ assistance and for the free training it offers.
FCA has registered this broker also in the UK and this license guarantees safety and reliability.
At the platform level, Trade.com is very innovative: The software used is fast and with a really clear interface. Thanks to a search box, you can easily find any stock in which to invest.
We have mentioned the training offered by this broker, which starts from a very complete trading course, which can be downloaded for free from the link below:
This course only lays the foundations of trading, in order to deepen the topics, there is an entire didactic area divided into three levels based on the trader’s preparation: basic, intermediate, advanced.
Trade.com tries to facilitate access to trading with a minimum deposit of only 100 Euros, an amount that truly everyone can reach.
To practice, however, a free and unlimited Demo account is available, which offers all the features of the real account but without the risk of losing money.
Xiaomi shares: Real-time quotation
In 2019, Xiaomi’s mobile phone shipments reached 125 million units, reaching fourth place globally (after Samsung, Huawei, and Apple) and first in India.
The company has been listed on the Hong Kong Stock Exchange since 2018.
The reason behind Xiaomi’s enormous success is the total different approach in terms of marketing and strategy compared to giants like Samsung and Apple.
For example, Xiaomi sells almost exclusively online, saving the cost of physical stores and, therefore, is able to offer smartphones at (almost) cost prices.
Xiaomi Corporation recently revised its estimates for 2020 upwards and this has led to greater confidence in the title.
Xiaomi also recorded a profit in the first quarter that was much higher than what analysts expected. However, this is not a sufficient reason to say that it is a safe investment.
The company managed to boost sales despite the impact of the coronavirus, which shook supply chains and curbed overall smartphone demand.
Is buying Xiaomi shares worthwhile?
To answer this question, we must better analyze the results obtained recently by Xiaomi, its financial stability, and the trend of the asset on the stock exchange.
After the latest results, analysts analyzing Xiaomi are now forecasting revenues of CN ¥ (Chinese Yuan) 240.2 billion in 2020.
If Xiaomi achieves this, it would reflect a significant 13% improvement in sales over the past 12 months. Earnings per share are expected to rise by 6.4%.
Ultimately, buying Xiaomi shares is worthwhile, but you have to pay attention to the strategy to adopt in online trading and also to what Xiaomi’s competitors do.
The main Xiaomi competitors are other smartphone and consumer electronics manufacturers such as:
Xiaomi technical analysis
Outlining the right strategy to invest in shares is essential and deepening the evaluation of the Xiaomi stock is absolutely necessary. But we don’t want to go too far into the technicalities of the analysis: We want to provide understandable data.
The Xiaomi average target price has risen despite no significant changes in earning estimates. It could be that analysts reflect Xiaomi’s earnings predictability by awarding a price premium.
There are different perceptions on the Xiaomi asset, which sees the most confident analysts valuing it at HKD 16.26 (Hong Kong dollars) and the most negative ones at HKD 6.82 per share. This is a fairly wide range of estimates, suggesting a wide range of possible outcomes for the company. But which one is the most likely?
The graph shows the performance of the Xiaomi asset since its listing on the Hong Kong stock exchange. The trend was strongly increasing before the pandemic and has now resumed the same trend, setting new all-time highs. So the odds are in favor of growth.
Xiaomi shares forecasts
The estimates are interesting and quite positive for the future of the Xiaomi asset.
According to analysts, next year should bring revenues up to 13%, in line with its annual growth of 15% last year.
Xiaomi is therefore always growing even if no longer at a frenzied pace: The forecasts of the main analysts are still positive. However, given that we are in uncharted territory beyond the historical highs of the stock, there could be slow downs despite the trend remains positive and stable .
It should also be noted that there has been no substantial change in sentiment, with analysts confirming previous estimates.
Fortunately, there have been no real changes in sales forecasts, with the business still expected to grow in line with the entire industry. However, we note an update of the target price: Analysts probably believe that Xiaomi’s intrinsic value can improve over time.
- The short-term forecasts are therefore upward but some slow downs can happen, so you need to swing trade following the stock’s fluctuations.
- In the medium and long term, however, analysts agree on a constant growth in the price of Xiaomi shares, which are still underestimated compared to the real value of the company.
Xiaomi Shares: Target price
Analysts at the eToro Trading Desk have issued a purchase valuation for Xiaomi shares. The 12-month average target price is HKD 16.26.
To sum up, the company’s long-term earnings trajectory will be much more visible starting from next year. For those interested in long-term investing, buying Xiaomi shares would complement a well-diversified technology portfolio.
Short-term traders need to pay more attention to the volatility of the stock, which is still very strong.
The first step is to log into a Demo account (from the links below) and test your strategy directly on the trading platforms. In demo you do not risk losing money while doing your tests and after that you can move on to real investments.
Here are the official links to access the Demo accounts of the best online brokers:
- Practice the eToro Demo account for free by clicking here
- Register for free on ForexTB and access the Demo account from this link
- Access the Trade.com Demo account for free from this link
Yes, but you have to adopt the right trading strategies. In this guide we explain them in detail.
The forecasts for the Xiaomi asset are on the upside but not all analysts agree.
eToro is the most suitable online broker to buy Xiaomi shares without paying commissions. It also allows you to make automatic investments.
The Target price for the Xiaomi stock at 12 months is 16.25 HKD per share.