Xiaomi's Interim Report Lands at a Pivotal Moment for Its Two Engines

Xiaomi's interim results reveal EV delivery dip and smartphone margin pressure, with investors eyeing 2026 target and cost trends.

Xiaomi's interim results arrive Tuesday with the company's two growth engines pulling in opposite directions — and the market watching closely to see which force wins out.

The Chinese electronics and electric-vehicle group will publish its first-half figures on August 18, followed by an investor call and webcast presentation at 7:30 pm Beijing time. Management is expected to offer forward guidance alongside the numbers, giving shareholders their clearest read yet on whether the company can close the gap on its ambitious annual EV delivery target.

The EV division: momentum meets a mid-summer stumble

The spotlight falls squarely on the electric-vehicle business, where Xiaomi's growth trajectory has shown signs of cooling. According to data from the China Passenger Car Association, July deliveries came in at 31,267 vehicles — a 2.68 percent improvement year-on-year, but a 9.99 percent decline from June's figure.

That monthly dip matters because Xiaomi had been building a head of steam through the spring. CEO Lei Jun has set a 2026 target of 550,000 vehicle deliveries, and the first quarter saw 80,856 units handed over. April through June brought a clear acceleration, with each month surpassing 30,000 vehicles and pushing second-quarter deliveries past the 100,000 mark for the first time.

Reuters reported in early August that Xiaomi is running behind its internal targets for the year, prompting the launch of new large SUV models to reignite demand. The broader Chinese auto market has also cooled, a headwind affecting manufacturers across the board.

The profitability question looms just as large. In the first quarter, Xiaomi lost roughly 5,600 US dollars per vehicle. Investors will be looking for evidence that economies of scale are compressing that figure, and for signals on how the new SU7 generation and the YU7 SUV are resonating with buyers.

Smartphone margins under siege

While the EV arm chases growth, the core handset business faces a cost squeeze that shows no sign of easing. Goldman Sachs projects second-quarter gross margin of just 8.2 percent for the smartphone division, with sharply higher DRAM and NAND memory-chip prices eating into profitability.

Retail prices have held steady or ticked up slightly, but that has not been enough to offset the surge in component costs. The global smartphone market has fallen to its lowest level since 2013, according to Counterpoint, and Xiaomi's market share has slipped to roughly 12 percent.

CICC expects overall revenue of around 107.14 billion RMB for the quarter — a decline of about 7.6 percent year-on-year — with earnings per share also expected to fall markedly. The company's premiumization strategy is now being stress-tested by an unforgiving cost environment.

On the product front, Xiaomi has kept the pipeline moving. The Redmi K100 Pro and Redmi K100 Pro Max launched in China with prices starting at 3,699 yuan and 4,199 yuan respectively. The larger model packs a 200-megapixel sensor and Bose-tuned speakers, and has been on sale domestically since August 11. A security patch also rolled out in early August covering the Xiaomi 15S Pro and two tablets in the Pad 7 series.

Buybacks continue as shares hover near key technical level

Amid the operational crosscurrents, Xiaomi has maintained a steady cadence of share repurchases. On August 14, the company bought back 1.9 million Type-B shares for 49.8 million Hong Kong dollars, following a near-identical purchase the previous day for 49.9 million. An earlier tranche on August 11 saw 1.9 million shares acquired for 50 million Hong Kong dollars.

The repeated buybacks signal management's view that the current price range offers value, though they have yet to reverse the broader downward drift. The stock closed Friday at 2.87 euros, up 0.8 percent on the day but down 7.4 percent on the week. Year-to-date, the shares have lost 34 percent.

The technical picture is finely balanced. The price sits just below the 50-day moving average of 2.89 euros — a level that would need to be reclaimed to generate fresh upward momentum — while the 200-day average of 3.64 euros sits roughly 21 percent higher, underscoring the persistence of the medium-term downtrend. The relative strength index stands at 43.4, a neutral reading that leaves room for movement in either direction.

Tuesday's numbers will likely determine which way the stock breaks from that inflection point. The key question for investors is whether the new SUV lineup can reaccelerate EV deliveries and whether smartphone margins have bottomed out — or whether the gap to the annual targets continues to widen.