Xiaomi Shares Defy Internal Turmoil with Strong Market Performance

Xiaomi KYG9830T1067

Despite facing a significant public relations crisis within its executive ranks, Xiaomi Corporation's stock opened the week on a positive note. Investors appeared to overlook the internal disciplinary actions, focusing instead on the company's record-breaking operational metrics, particularly within its burgeoning electric vehicle division. The shares advanced over 2% to HK$38.70 on Monday.

The company has implemented strict penalties against senior leaders following substantial criticism from its customer base. In response to a management failure, Xiaomi issued formal reprimands to Group Vice President Xu Fei and the head of public relations, Xu Jieyun. The financial consequences are direct: both executives have been stripped of their 2025 annual bonuses and have received downgraded performance evaluations. Employees directly involved in the incident have been dismissed.

This situation was triggered by the marketing department's engagement with a controversial influencer known as "Wanneng de Daxiong," who has a history of defaming customers. CEO Lei Jun had previously addressed the issue, categorizing the event as a clear violation of the company's core principles. The market's muted reaction to this news suggests a current investor prioritization of financial execution over corporate governance missteps.

Electric Vehicle Unit Powers Through Headlines

The negative press has been substantially offset by demonstrable strength in Xiaomi's automotive business. The company set a new monthly delivery record in December, exceeding 50,000 vehicles. The SU7 model has been a primary growth engine, with cumulative deliveries surpassing 360,000 units since its market launch.

Concurrently, Xiaomi is refining its strategy. For the newly announced SU7 generation, slated for an April 2026 release, the company is emphasizing enhanced safety features—a move interpreted as a direct response to accidents in the previous year. Even with a 6.5% price increase, the model maintains a competitive position against rivals like Tesla. Market analysts point to the firm's recent 22% revenue growth as evidence that its transition into an electric mobility provider is gaining solid traction.

Regulatory Challenges Emerge in Key Market

Beyond its self-inflicted troubles, Xiaomi faces potential regulatory headwinds in India. Reports indicate that the Indian government is considering measures that would compel smartphone manufacturers to disclose their source code. This proposal has met with strong industry resistance due to concerns over the exposure of trade secrets and potential breaches of data privacy protocols. Whether this requirement will be enforced remains an unresolved risk for Xiaomi's crucial overseas operations.

The investment community's focus is now squarely on the company's ability to execute its ambitious targets. The key determinants for the stock's future trajectory will be whether Xiaomi can achieve its current-year sales goal of 550,000 vehicles and the nature of the Q1 2025 financial results, which are expected to be announced shortly.