Fitch Ratings has affirmed Xiaomi's (HKG:1810) long-term issuer default rating and senior unsecured rating at BBB+ with a stable outlook.
It also assigned the same rating on notes issued by its wholly-owned subsidiary Xiaomi Best Time International, according to a commentary released Friday.
Fitch said Xiaomi's credit profile will remain resilient this year, even as rising memory costs weaken its core smartphone business by reducing shipments and profitability.
Stronger cash generation from Xiaomi's IoT and internet services segments-along with its diversified portfolio, global market position, large net cash position, and low EBITDA leverage-should buffer the smartphone downturn, Fitch added.
Fitch said Xiaomi is expected to maintain healthy free cash flow and a large net cash position, further supported by 39 billion yuan in equity proceeds raised in March, to fund EV and AI investments and share buybacks.