Xiaomi's Buyback Signals Confidence, But the EV Delivery Gap Looms Large

Xiaomi repurchases shares near yearly lows, but July EV deliveries drop 10% MoM and HyperOS 4 draws iOS comparisons, clouding outlook.

The optics are hard to reconcile. Xiaomi's management spent roughly HK$49.8 million on Friday repurchasing 1.9 million Class B shares — a textbook vote of confidence in the stock's valuation. Yet the same week, the company's electric vehicle division delivered numbers that do little to quiet the skeptics.

The buyback lands at a moment when the shares are trading at €2.87, marginally beneath the 50-day moving average of €2.89 and a full 34 percent below where they started the year. The seven-session stretch heading into the repurchase saw the stock shed 5.6 percent, leaving it well adrift of the 200-day average of €3.64. For management to step in at these levels suggests they see value where the market currently does not.

The EV Math Is Getting Harder

July's delivery figures, released via the China Passenger Car Association, paint a mixed picture. Xiaomi EV handed over 31,267 vehicles during the month — a 2.68 percent improvement on the same period last year, but a 9.99 percent decline from June's tally. The breakdown within that total is where the concern sharpens: the SU7 sedan added 21,044 units, up 3.1 percent month-on-month, while the YU7 SUV slumped 28.6 percent to 10,223 deliveries.

Cumulative deliveries through the end of July stand at 216,322 vehicles. Against the widely reported annual target of 550,000 units, that's roughly 39 percent of the goal with five months of the year remaining. Reuters noted in early August that Xiaomi is trailing expectations on EV sales and is looking to larger SUV models to regain momentum. The arithmetic is unforgiving: the company would need to average well over 60,000 deliveries per month for the rest of the year to hit the original figure.

An additional headache emerged in the form of a reported incident involving a SU7 equipped with an active lane-centering system. According to the accounts, the vehicle's safety systems failed to detect an obstacle in time. With autonomous driving already a sensitive public topic in China, the episode adds an unwelcome layer of scrutiny to the company's driver-assistance credentials.

HyperOS 4: Software Momentum, Design Questions

On the software front, Xiaomi used Wednesday to unveil HyperOS 4, its latest operating system, with the beta rollout beginning the same day across devices including the Xiaomi 17 series and the Redmi K90 line. The centerpiece is an integrated AI assistant dubbed "Super XiaoAI 2.0," which the company says will fundamentally change how users interact with the system.

The launch wasn't without its detractors. Several outlets took issue with the interface's translucent "frosted glass" aesthetic, arguing it bears a strong resemblance to Apple's iOS. Xiaomi counters that optimized system performance is the real advancement over the previous version, though that claim hasn't been uniformly verified from independent sources. For investors, the more consequential question is whether the software translates into smartphone sales — and the security updates that rolled out in August for devices like the Xiaomi 15S Pro and several Pad models suggest the broader ecosystem continues to function without disruption.

What August 18 Will Actually Tell Us

The interim results are scheduled for release on August 18 at 7:30 PM Hong Kong time, following a board meeting that will also weigh the possibility of an interim dividend. Consensus estimates point to second-quarter revenue of 116.84 billion yuan and earnings per share of 0.225 yuan — both figures trailing the prior year's performance.

The technical setup heading into the print suggests consolidation rather than conviction: the relative strength index sits at 43.4, comfortably in neutral territory. The buyback program, which has seen Xiaomi acquire roughly 1.862 million shares at an average price of about HK$26.85 each, signals management's view on valuation but does little to alter the fundamental equation.

What investors will be listening for on the call is straightforward: whether management holds firm on the 550,000-unit delivery target, how it frames the margin pressure in both the EV and core businesses, and whether the repurchase activity signals a broader capital-return strategy or a one-off gesture. The stock's trajectory between now and then may well hinge on which of those questions gets a convincing answer.