Xiaomi's October Delivery Record Faces a Profit Test as Two Banks Trim Their Targets

Xiaomi's stock has been carried higher by a broad recovery in Chinese technology shares, but the rally is running ahead of the company's earnings story. Two separate brokerages have cut their price targets in recent days, and neither move signals a collapse in confidence — both kept their buy recommendations intact. What they question is the pace at which operational progress converts into profit.

The shares rose 4.8% in one session and 3.7% in another, closing at EUR 3.34 in the latter. Media reports attribute the wider advance to improved global risk appetite following the US midterm elections, alongside state purchases of Chinese equities, lower oil prices and softer US yields. Xiaomi is thus benefiting from a tide that lifts the whole sector, not from anything specific to its own business.

Two Banks, One Message

Bank of America Securities reaffirmed its buy rating on Monday while lowering its target to HKD 34 from HKD 37. The house expects weaker third-quarter 2026 revenue but anticipates that the smartphone gross margin will stabilize. That combination is what matters: if margins hold firm despite softer sales, confidence in the earnings trajectory could strengthen. If they don't, a key plank of the bullish case goes missing.

Citi delivered a similar verdict, trimming its target to HKD 33.2 from HKD 34 on Monday and keeping its buy call. More telling than the target itself was the revision to earnings assumptions. Citi cut its adjusted earnings-per-share forecasts for the current year and the two following years by 7%, 9% and 7% respectively — a downgrade that spans more than a single reporting period.

The takeaway for investors is that optimism about the stock does not automatically translate into rising business expectations. A cheaper valuation for Chinese tech can support the share price; a durably stronger assessment requires progress on the ground.

Deliveries Are Not Earnings

The operational case has real substance. Xiaomi reported more than 50,000 electric vehicles delivered in October — its highest monthly figure of 2026, according to Reuters. For the January-to-October period, roughly 336,000 vehicles were handed over, against a full-year company target of 550,000 for 2026. The October record is a positive signal, but not yet proof that the annual goal will be met.

A rising delivery number answers a volume question. It does not, on its own, answer the question of profit contribution — and that gap is precisely where the trimmed estimates bite. Nor should every subsequent share-price move be pinned on the delivery news: Reuters linked that connection to Monday's advance, not to the following day's gain.

Technology milestones add a longer-term dimension. Xiaomi received awards at the World Internet Conference in Wuzhen on Tuesday, one of them for robotics technology, with reports citing tests in an automotive plant and a trial operation in a residential setting. Separately, Shanghai Securities News reported that a humanoid robot completed an uninterrupted eight-hour shift at a sorting station in Xiaomi's car factory — the first such deployment. Practical use and economic contribution, however, are different yardsticks, and awards are not revenues.

The November Date That Matters

The next hard data point arrives on 24 November 2026, when Xiaomi's board is scheduled to review and approve the unaudited consolidated results for the quarter and nine months ended 30 September 2026. Those figures should give investors the basis to weigh market optimism against operational resilience afresh.

Until then, the balance is between the potential for an operating stabilization and the risk that the recent rebound is mostly market-driven. Should risk appetite reverse while earnings disappoint, the latest upward move would look more vulnerable. Should delivery momentum continue and the smartphone margin hold, the recovery would stand on broader ground. The board meeting, not the rally, will settle the question.