Xiaomi's Dual-Pronged Capital Strategy: Share Buybacks Meet Inbound Investment

Xiaomi executes a HKD 2.5B share buyback while attracting major Southbound investment, as it pivots strategy toward chips, AI, and its OS ahead of new product launches.

The Chinese technology giant Xiaomi is executing a significant two-part capital strategy. As company leadership aggressively repurchases its own equity, substantial external investment is simultaneously flowing into the stock. This dual approach saw a notable injection of HKD 437.9 million via Southbound Trading on February 24 alone, raising questions about the rationale behind these coordinated moves.

Aggressive Buyback Initiative in Focus

Xiaomi's share repurchase program, initiated in January with a total authorization of up to HKD 2.5 billion, is proceeding at pace. The company's latest transaction on Tuesday involved acquiring 2.8 million Class B shares for HKD 100 million. This followed a purchase of 4.3 million shares for HKD 152.2 million just four days prior.

Concurrently, CEO Lei Jun is steering the company toward a renewed strategic emphasis. Management plans to sharpen its internal focus over the next five years on developing semiconductor chips, artificial intelligence, and its proprietary operating system—a clear move toward greater technological self-reliance.

Share Price Reaction and Forthcoming Product Launches

Despite these substantial capital allocations, Xiaomi's stock price retreated on Tuesday. Shares in Hong Kong closed at HKD 35.74, marking a decline of 2.24 percent. This price level positions the equity approximately 25 percent below its 200-day moving average.

The market's attention now turns to upcoming product announcements. Xiaomi is scheduled for a global unveiling of its Watch 5 smartwatch in Barcelona on February 28. Coinciding with the Mobile World Congress, the company also plans to introduce its new Pad 8 tablet and the HyperOS 3.1 software version. Whether this product offensive will inject fresh momentum into the share price remains to be seen in the near term.