Xiaomi’s 43% Profit Collapse Sinks Stock to 52-Week Low, Dwarfing Buyback and Hybrid Approval

Xiaomi shares hit 2.76 euro low, down 38% YTD after Jefferies downgrade and dismal Q1 results; EV approval and buyback fail to offset smartphone slump.

Xiaomi shares hit a fresh 52-week low of 2.76 euros on Wednesday, extending their year-to-date slide to 38 percent as a brutal profit warning in the smartphone business overwhelmed a raft of positive news — from a HK$101 million stock buyback to regulatory clearance for a new hybrid electric vehicle. The stock closed at 2.78 euros, more than 58 percent below the June 2025 peak of 6.69 euros.

The catalyst for the latest leg down was Jefferies’ decision to downgrade the stock to “Underperform” after the company’s dismal first-quarter numbers. The brokerage slashed its price target to 25.49 Hong Kong dollars, equivalent to 2.82 euros, citing weakening EV sales, shrinking smartphone margins and rising component costs. Xiaomi’s EBIT cratered by 70 percent in the quarter.

Those fears were fully reflected in Xiaomi’s Q1 2026 results. Revenue fell 10.9 percent year on year to 99.1 billion yuan, while adjusted net profit plunged 43.1 percent to 6.1 billion yuan. The smartphone division — still the company’s backbone — saw revenue drop 12.5 percent as global shipments tumbled 19.2 percent to 33.8 million units, the steepest decline among the world’s top five handset makers.

Against this grim backdrop, a long-awaited milestone arrived for Xiaomi’s automotive arm. The Chinese Ministry of Industry and Information Technology (MIIT) has completed the public comment period for Xiaomi’s application to produce extended-range electric vehicles (EREVs), clearing the path for final approval. The first EREV model, codenamed “Kunlun N3,” will sit under a new sub-brand called Skynomad and measure over 5.3 meters in length. Priced at around 200,000 yuan, it undercuts rivals such as Li Auto and Aito, whose comparable SUVs start at 250,000 yuan. Its combined range is roughly 1,500 kilometers, with 400 to 500 kilometers of pure electric driving.

Xiaomi has ambitious plans for 2026: four new models in total, including a revamped SU7 with 902 kilometers of range, an SU7 Executive Edition, and two EREV SUVs in five- and seven-seat configurations. The company’s delivery target for the year is 550,000 vehicles — a 34 percent jump from 2025. Yet the pace so far is unconvincing: just 150,317 cars were delivered from January to May, an increase of only 13.5 percent year on year. Getting two hybrid models into series production during the second half will be a severe test of execution.

Management attempted to shore up confidence through a buyback. On June 17, Xiaomi repurchased 4 million of its own shares at prices between 25.28 and 25.42 Hong Kong dollars, for a total of roughly 101 million HKD. Since the program began, the company has bought back 30.1 million shares, representing about 0.12 percent of its outstanding equity — a gesture that signals belief the stock is undervalued but remains modest in scale.

Technically, the stock is deeply oversold. The relative strength index stands at 28.2, and the price is trading 34 percent below its 200-day moving average of 4.18 euros. The Federal Reserve’s decision to hold rates at 3.50–3.75 percent while signaling a tighter bias for the second half of 2026 added further pressure on Chinese growth stocks, Xiaomi included.

For the stock to find a sustainable floor, the next quarterly report will need to show a meaningful inflection in smartphone demand. Until revenue stops shrinking and profits stop collapsing — even by double-digit percentages — share buybacks and EREV approvals will remain sideshows to the core earnings story. The Kunlun N3 is still months away from volume production, and the 550,000-unit target is a long way from the current run rate. Xiaomi’s real test begins in the second half of 2026.