Xiaomi AGM: Buyback Mandate and Share Issuance Authorization Approved as Q1 Adjusted Profit Sinks 43%

Xiaomi shareholders authorize 10% buyback and 20% new equity issuance as Q1 revenue falls to 99.1B yuan, profit halves, and EV losses persist.

Xiaomi’s annual general meeting in Beijing on Tuesday delivered a dual capital mandate that gives the board both a weapon to support the stock and the power to dilute existing holders. Shareholders voted to authorise a 10% buyback of outstanding shares alongside a separate resolution allowing the issuance of up to 20% new Class-B equity — two tools that pull in opposite directions for the company’s capital structure.

The meeting also approved the nineteenth revision of Xiaomi’s memorandum and articles of association, aligning the corporate charter with Hong Kong Exchanges’ “Core Shareholder Protection Standards.” Among the changes is formal recognition of virtual general meetings conducted via video, online platforms, telephone or other telecommunications facilities, as long as shareholders’ speaking and voting rights are fully preserved. The updated rules take immediate effect.

None of these authorisations constitute an immediate action plan. The buyback and issuance mandates simply create the legal framework — the board can activate them at its discretion in the coming quarters. But the timing is telling: Xiaomi is grappling with its worst financial performance in recent memory.

Revenue for the first quarter of 2026 slipped to around 99.1 billion yuan — 99.14 billion yuan on a reported basis — down from 111.29 billion yuan a year earlier. Period net profit halved to 4.73 billion yuan, while on an adjusted basis net earnings tumbled 43% to 6.1 billion yuan, or roughly 772 million euros. The profit squeeze is largely attributable to surging memory-chip costs that have hammered margins in the company’s already thin budget smartphone segment.

The volume picture is equally stark. Smartphone shipments fell 19% year-on-year to 33.8 million units in the first quarter, the steepest decline among the world’s five largest handset vendors, according to Omdia. Industry observers expect the broader budget segment to contract up to 13.9% in 2026. Xiaomi’s core “Smartphone × AIoT” business contributed 79.28 billion yuan in quarterly revenue, while the “Smart EV, AI and New Initiatives” segment added 19.86 billion yuan.

That EV division remains a drag on profitability. It posted an operating loss of 3.1 billion yuan in Q1, even as momentum builds on the delivery front. Xiaomi said it shipped over 30,000 units of the SU7 electric sedan in China alone during May, suggesting the ramp is accelerating but that profitability remains distant.

To bolster investor confidence, the company has separately announced a share buyback programme of up to 20 billion Hong Kong dollars. The stock, meanwhile, continues to trade near crisis levels. At around 3.18 to 3.24 euros, the shares are just above the 52-week low of 3.08 euros set earlier this month, having lost roughly 30% since the start of the year and about 44% over the past twelve months.

On the product side, Xiaomi is trying to offset the hardware headwinds with software and ecosystem expansion. It began rolling out HyperOS 3.1, based on Android 16, to some 40 models including the flagship Xiaomi 15, 14 and 13 series. The update introduces “Super Ada” for live activities and deeper compatibility with Apple AirPods. Separately, the recently launched Xiaomi 17T Pro now supports Google Quick Share with AirDrop compatibility, enabling direct wireless file transfers between Xiaomi devices and iPhones without cloud services — a clear play to keep Apple users inside the Xiaomi orbit.

Whether the board ultimately leans toward retiring shares or issuing new ones will determine the trajectory of per-share metrics in the quarters ahead. For now, the AGM has handed management flexibility — and the market will watch closely which lever is pulled first.