Xiaomi Doubles Down on Buybacks and EVs as Q1 Earnings Loom Over a Slumping Stock

Xiaomi aggressively buys back shares and launches a high-performance EV and flagship smartphone, but stock still down 25% YTD as Q1 earnings loom and margin concerns persist.

Xiaomi is fighting a war on two fronts — the stock market and the showroom — but investors remain unconvinced. The Chinese tech giant has been aggressively buying back its own shares while simultaneously rolling out new electric vehicles and smartphones, all against the backdrop of a stock that has shed roughly a quarter of its value since the start of the year.

The buyback programme has been running since last summer, with the company purchasing around 1.5% of its total share capital. On Wednesday alone, Xiaomi bought back 3.3 million of its own B?shares on the Hong Kong exchange for approximately 100 million Hongkong-Dollar. Such moves are designed to tighten supply and signal confidence, but the market’s reaction so far suggests the medicine has not yet taken full effect.

Shares in Germany have been trading at around €3.29, dangerously close to the 52?week low. The year-to-date decline stands at 25.04%, and over the past twelve months the drop has widened to 44.84%. Technical indicators paint a grim picture: the stock sits below its short-term moving average of €3.52 and far beneath the long-term line of €4.47. The pressure is palpable, and the company knows it.

To change the narrative, Xiaomi is turning up the heat on the product front. On Thursday it unveiled the YU7 GT, an electric high-performance SUV that churns out more than 1,000 horsepower. The model recently set a lap record on the Nürburgring Nordschleife, accelerates from zero to highway speed in under three seconds, and boasts a range of around 700 kilometres. CEO Lei Jun has positioned it as a vehicle for the “elite,” with an expected price tag of roughly 400,000 Yuan.

Alongside the SUV, Xiaomi is launching the 17 Max, a flagship smartphone packing an 8,000 mAh battery. The device is designed to tighten the ecosystem linking phones, smart-home gadgets, and cars — a strategy that goes well beyond routine product refreshes. Both products go on sale in China this week, giving the company a fresh wave of momentum as it heads into a critical earnings report.

All this spending comes at a cost. Xiaomi has earmarked more than 40 billion Renminbi for research this year, with heavy allocations going into artificial intelligence and next-generation drivetrain technology. The question is whether those investments will start to pay off in the profit-and-loss statement.

The answer may come on May 26, when the board is set to approve the unaudited consolidated results for the first quarter. Consensus estimates point to revenue of roughly 100.83 billion CNY and earnings per share of around 0.175 CNY. But the topline alone will not be enough to sway the sceptics. What really matters is margin quality.

Xiaomi is trying to juggle the high start-up costs of its EV division with intensifying competition in China’s smartphone market. That mix can squeeze profitability quickly. If the Q1 numbers show that the car business is eating into earnings faster than expected, the stock could test the recent low of €3.17. On the other hand, strong margins would give the buyback programme more credibility as something other than a stopgap measure.

For now, the market is watching and waiting. The product launches are impressive, and the buybacks show intent. But the real test of Xiaomi’s strategy will be written in black and white on May 26.