Xiaomi’s Buyback Fails to Halt 39% Slide as Profit Plunge and EV Target Miss Raise Stakes

Despite HK$1.5bn buyback, Xiaomi stock nears 52-week low amid 43% profit drop, memory cost surge, and slowing EV deliveries; new Skynomad SUV targets shrinking market.

Xiaomi has thrown nearly HK$1.5 billion at its own shares since mid-June, yet the stock continues to languish near its 52-week low of €2.67, closing last week at €2.72. The wider buyback programme authorises up to HK$20 billion over 12 months, with the current tranche capped at HK$4 billion. So far, the company has repurchased 30.1 million Class B shares — roughly 0.12% of equity — and cancelled them all. A predecessor programme removed 399.6 million shares for HK$14.6 billion, but the price never stabilised sustainably.

The relentless selling pressure has deeper roots than any buyback can address. In the first quarter of 2026, Xiaomi’s adjusted net profit collapsed 43.1% year-on-year, driven largely by a fivefold surge in smartphone DRAM contract prices and a tenfold jump in TV memory costs. Goldman Sachs expects the second-quarter adjusted net profit to fall by a further 50%, to 5.4 billion yuan, with overall revenue growth grinding to just 1%. Excluding the electric vehicle and AI segments, revenue would actually shrink.

The EV business, once hailed as Xiaomi’s growth engine, is itself faltering. The company targets 550,000 vehicle deliveries in 2026, yet in the first five months it managed only around 140,000 to 150,000 units — and May deliveries were lower than April’s. To hit the annual target, Xiaomi now needs to deliver more than 50,000 vehicles every month through December, a pace it has hit only once so far. Between June and December, the requirement actually rises to around 57,500 units per month if the exact five-month tally is close to 150,000.

Undeterred, Xiaomi is pressing into a shrinking niche. The Chinese Ministry of Industry and Information Technology has approved production of vehicles with range extenders, a first for the company, which previously built only pure battery EVs. The new sub-brand is called Skynomad, and its debut model, the Kunlun N3, is a full-size SUV stretching over 5.3 metres with a claimed battery-only range of up to 500 kilometres. Xiaomi is pricing the vehicle aggressively at around 200,000 yuan, undercutting comparable models from Li Auto by roughly 50,000 yuan.

The timing of this push is awkward: China’s extended-range EV segment saw sales plunge nearly 25% in May, the steepest monthly decline in five years, and even market leader Li Auto is feeling the strain. Jefferies has downgraded Xiaomi to Underperform with a price target of HK$25.49, valuing the EV unit at just 1.5 times projected 2026 revenue. Goldman Sachs, by contrast, sticks with a Buy rating and a HK$40 target, arguing the market has yet to price in Xiaomi’s transformation into an integrated tech conglomerate with AI ambitions.

Beyond the showroom, Xiaomi is refreshing its software stack. HyperOS 4, built on Android 17, is slated for a summer reveal, with a global rollout likely in October. The development team has purged legacy code and switched core applications to the Rust programming language to boost memory security and unify the design language.

Research spending remains a priority. Q1 R&D outlays rose 33.4% to 9.0 billion yuan, and the company now employs more than 26,000 people in research and development. All eyes now turn to August 26, when Xiaomi reports second-quarter earnings. The critical metrics will be the loss per vehicle and the delivery trajectory — the two numbers that will determine whether the growth story still holds water.