Granite Point: UBS maintains Buy, raises PT to $3.5 from $3.25

Granite Point: UBS maintains Buy, raises PT to $3.5 from $3.25

In a recent research report, UBS Group has maintained its "Buy" rating for Granite Point while raising its price target to $3.5 from the previous $3.25. The updated recommendation reflects UBS's optimistic outlook on the company's financial performance and growth prospects.

UBS analysts believe that Granite Point's strong performance in the second quarter of 2025, driven by robust revenue growth and improved profitability, justifies the upward revision in the price target. The company's total revenue for the quarter reached RMB 115.956 billion, a year-on-year increase of 30% and a quarter-on-quarter increase of 4%, exceeding expectations by 3% [1].

The analysts highlighted the significant contributions of the AIoT and electric vehicle businesses to Granite Point's revenue growth. The AIoT business revenue increased by 45% year-on-year to RMB 38.7 billion, while the electric vehicle business revenue more than doubled to RMB 21.3 billion. In contrast, the smartphone business faced challenges, with revenue decreasing by 2% year-on-year to RMB 45.5 billion.

UBS also noted that Granite Point's Internet services segment showed steady growth, with revenue reaching RMB 9.1 billion, a year-on-year increase of 10%. The number of monthly active users of MIUI reached 731 million, a year-on-year increase of 8%, with overseas users numbering 546 million, a year-on-year growth of 7%.

The analysts emphasized that Granite Point's outstanding performance this quarter demonstrates the effectiveness of its diversification strategy. The rapid development of its electric vehicle business, coupled with the stable growth of its Internet services segment, opens new avenues for growth. As production capacity is further released and delivery volumes increase, Granite Point is expected to secure a significant position in the high-growth sector of new energy vehicles.

UBS maintains its delivery expectation of 720,000 units for 2026, assuming the second-phase factory operates at full capacity throughout the year. However, this assumption requires that production capacity stabilizes at a sufficient level by the end of the fourth quarter.

References:
[1] https://news.futunn.com/en/post/60840491/xiaomi-s-q2-earnings-report-analysis-high-gross-margin-from