Profit Plunge of 43% Sinks Xiaomi Stock to Fresh Low, Prompting 20 Billion HKD Buyback

Xiaomi's first-quarter adjusted net profit fell 43% to 6.1B yuan, revenue dropped 11%, and EV unit posted 3.1B yuan loss despite new buyback plan.

Xiaomi’s market value has taken a fresh beating after first-quarter earnings revealed a dramatic collapse in profitability. Adjusted net profit for the three months through March stood at just 6.1 billion yuan, a 43.1% decline year-on-year. The figure translates to earnings per share of 0.18 yuan, a far cry from the growth story the company has been selling. Revenue also shrank, dropping 10.9% to 99.14 billion yuan, as the core smartphone business buckled under rising memory-chip costs.

Investors did not wait for the full report to react. The stock closed at 3.05 euros on Friday, down 2.4%, and stayed barely above its 52-week low of 2.97 euros hit the previous day. Since the start of the year, the shares have lost more than 32%. The selling pressure was amplified by a broader tech rout — the Nasdaq shed 4.2% on Friday as fresh US jobs data reignited interest-rate fears, punishing growth stocks across the board.

In a bid to steady the ship, management rolled out a new share buyback program worth as much as 20 billion Hong Kong dollars (roughly €2.4 billion) on June 2. The plan replaces a previous repurchase mandate of 14.6 billion HKD and authorizes the company to buy back Class B ordinary shares over the next twelve months. Xiaomi wasted no time: on June 5 it scooped up 3.5 million shares for 98 million HKD. Yet the market hardly cheered — the stock dipped further on the day of the announcement.

The earnings shortfall is rooted in two fronts. The electric-vehicle business, which Xiaomi is betting on as its next growth engine, posted an operating loss of 3.1 billion yuan in the first quarter. At the same time, the smartphone division is grappling with soaring prices for memory chips, squeezing margins across the industry. Jefferies has flagged the margin pressure, while Goldman Sachs set a price target of 40 HKD on the Hong Kong-listed shares late last month.

Despite the bleeding, Xiaomi is holding to its aggressive 2026 EV delivery target of 550,000 units — a 34% increase over last year and a volume that outstrips the combined China production of Mercedes-Benz and BMW. Monthly deliveries are already running above 30,000 vehicles, and the Chinese market’s EV penetration topped 59% in December 2025. But the scale-up comes at a steep cost, and the buyback program is seen as a reassurance that the company can fund its ambitions without neglecting shareholder returns.

On the hardware side, Xiaomi is preparing the 17T smartphone series, which launches in China on June 8 with tailor-made features for the domestic market. Further out, the 18-series devices — expected in the second half of 2026 — will be among the first to pack Qualcomm’s Snapdragon 8E6 chipset, built on a 2nm process with clock speeds up to 5 GHz. Xiaomi sees on-device artificial intelligence as the key differentiator in the next smartphone cycle.

Technically, the stock remains under pressure. Its relative strength index sits at 37.2, suggesting oversold conditions, but the 50-day moving average of 3.38 euros still looms overhead. A break below 2.97 euros would open the door to fresh downside, while a recovery above 3.38 euros would be the first credible sign of stabilization. The next quarterly results will test whether the buyback is a floor or merely a placeholder.