Xiaomi Buys Back Stock as Pengcheng Discounts End and Memory Costs Bite

Xiaomi bought 2 million Class B shares for HK$47.59 million as EV deliveries topped 40,000 in September, but memory chip costs pressure phone margins.

Xiaomi has moved to steady its share price with company cash, purchasing 2,000,000 of its own Class B shares on the Hong Kong exchange on Monday. The transaction carried a total value of HK$47.5902 million. Buybacks of this kind are designed to shrink the supply of freely tradable stock and to telegraph management's confidence in the group's underlying fundamentals.

The support operation did little to lift the stock in Europe by midweek. Xiaomi shares changed hands at EUR 2.72 on Wednesday, a daily decline of 0.8%, bringing the year-to-date loss to 37%. Tuesday's close had stood at EUR 2.74.

A Split Picture in Operations

Away from the capital markets, the operating story is pulling in two directions at once. New business lines are gathering speed while the legacy core struggles with profitability headwinds.

The mobility unit delivered more than 40,000 vehicles in September, according to Xiaomi Auto. Media reports put more than 10,000 of those units with the new Pengcheng series, which has now reached the end of its special introductory terms for first-time buyers — a milestone that will test whether demand holds without the launch incentives. Across the first nine months of the year, the division's cumulative volume comes to over 286,000 units. For an electronics manufacturer, that rapid production ramp is a central plank of its long-term growth strategy, aimed at steadily reducing reliance on the lower-margin consumer hardware business.

Xiaomi is pushing on other fronts as well. On 30 September the company unveiled the REDMI Note 17 series in Nigeria, a product family spanning several devices and led by the flagship REDMI Note 17 Pro Max 5G, part of an effort to shore up its position on the African continent.

Memory Chip Costs Cloud the Smartphone Business

Why the stock remains under pressure despite the strong vehicle numbers comes down, industry analysts say, to margins in the handset division. HSBC began coverage of Xiaomi roughly a week ago with a Buy rating and a price target of HK$33.20, but the bank explicitly labelled the current year, 2026, a transition period. The decisive factor it cited was higher memory chip costs, which are weighing noticeably on the smartphone business. That cost squeeze in hardware carries real weight and tempers the optimism that vehicle deliveries and the latest buyback might otherwise generate. HSBC expects a durable recovery in profitability only from next year.

Whether the Pengcheng line's sales figures provide lasting tailwind now hinges mainly on how stable demand proves to be once the first-buyer discounts are gone.