Xiaomi Shares Face Pressure from Insider Sale Plan, Bolstered by Buybacks

Xiaomi KYG9830T1067

Xiaomi's stock is currently caught between two significant, opposing forces. While co-founder Lin Bin has announced plans to gradually divest a substantial stake, the company itself is actively supporting the share price through a robust repurchase program. The central question for investors is which of these effects will dominate the medium-term price action. Initial market reaction showed signs of nervousness, although fundamental business performance and analyst outlooks present a more favorable picture.

Despite the uncertainty introduced by the insider transaction news, equity researchers maintain a positive stance. Goldman Sachs has reaffirmed its "Buy" recommendation, attaching a price target of 53.50 HKD. Some consensus estimates are even more bullish, with targets hovering around the 57.00 HKD mark.

This optimism is rooted in strong operational metrics:
- Third-quarter 2025 revenue growth of 22%
- Significant contributions from the electric vehicle division
- The company's inclusion in major indices like the Hang Seng
- The successful launch of the new flagship smartphone, the Xiaomi 17 Ultra, in China on December 27

Market experts anticipate that the latest smartphone generation and continued expansion in the EV sector will provide further revenue momentum in the coming year.

A Multi-Year Divestment Plan Unveiled

The immediate source of downward pressure was Lin Bin's disclosure of his intention to sell Class B shares worth up to USD 2 billion. The proceeds are earmarked for a new investment fund. Lin currently holds approximately 8.3% of the company.

Key conditions of the sale, however, mitigate the near-term impact:
- The divestment will not commence until December 2026
- Sales are capped at USD 500 million per rolling 12-month period
- The plan outlines a gradual reduction over a minimum of four years

Nevertheless, the mere announcement has weighed on market sentiment, with participants concerned about a future overhang of shares and potential dilution for existing holders.

Company Counters with Share Repurchases

In a direct response to the market's reaction, Xiaomi stepped in as a buyer of its own stock. According to Hong Kong exchange data, the company repurchased 3.9 million of its own B-shares on December 29, 2025.

Details of the buyback:
- Volume: 3.9 million shares
- Price range: 38.56 to 38.64 HKD
- Total value: approximately 150.6 million HKD

This action provides technical support for the share price and signals management's view that the current valuation remains attractive despite the planned insider sales. Concurrently, 395,000 new shares were issued during the same period under employee incentive schemes.

Chart support around the 38.50 HKD level, reinforced by the buybacks, has held for now. The equity last traded near 38.86 HKD, marking a modest gain of about 0.7%. Xiaomi's market capitalization stands at roughly 1.01 trillion HKD.

Conclusion: Near-Term Caution vs. Long-Term Fundamentals

Lin Bin's proposed share sales undoubtedly create short-term uncertainty and act as a psychological headwind. Counterbalancing this is an actively supportive management team engaging in buybacks at a key technical level, coupled with a fundamentally growing business posting double-digit revenue increases. The future trajectory of the share price will likely be dictated by the actual execution pace of the multi-year sales plan, the intensity of the company's repurchase activity, and the next wave of growth driven by the EV division and the Xiaomi 17 Ultra.