Xiaomi's Pengcheng Bet Faces Its First Real Test as HSBC Calls the Trough

Xiaomi Auto to report first full month of Pengcheng sales Wednesday, with parent stock down 37% this year and EV margins under pressure.

Xiaomi Auto will publish the first full month of sales data for its new Pengcheng line on Wednesday, a disclosure that lands while the parent company's stock is still nursing a 37% loss since the start of the year. The shares last changed hands at EUR 2.73, and the market's patience with the group's expensive pivot beyond smartphones is visibly thin.

Founder Lei Jun has already put a number on the launch: more than 10,000 Pengcheng vehicles delivered during the model line's debut month. That contribution helped push Xiaomi Auto past 40,000 total deliveries in September 2026. What Wednesday's breakdown should reveal is whether that ramp can hold up in China's brutally competitive electric-vehicle arena, or whether it was a launch-quarter spike.

Margins Tell a More Complicated Story

Volume growth has come at a price. In its half-year report for the period ending June 30, 2026, Xiaomi disclosed a lower gross margin in its Smart EV, AI and new initiatives segment. Management pinned the decline on reduced contributions from SU7 Ultra deliveries, alongside higher component costs and heavier spending on artificial intelligence.

The smartphone business, still the group's profit engine, is under separate strain. Rising memory chip prices have kept pressure on margins through the third quarter, according to media reports. HSBC acknowledged as much when it initiated coverage roughly a week ago with a buy rating and a target price of HKD 33.20, describing the current year as a transition period weighed down by the handset division. From the fourth quarter onward, the bank expects profitability to recover, helped by new flagship phones and the next generation of vehicles.

Software, Robots and a Chip IPO in the Pipeline

Xiaomi is not standing still on the product front. On September 22 it open-sourced the MiMo-V2.6 model family, including the Pro and Flash variants, giving outside developers access to its in-house AI models. A day later came HySparse2, an architecture built for the MiMo-V3 model that the company says will accelerate long-context agents — the compute-heavy workloads behind complex control and voice tasks on connected devices.

Hardware expansion continues in parallel. The S60 robot vacuum series went on sale worldwide on September 27, reinforcing a home-appliance lineup that has long sat alongside smartphones as a core revenue pillar. Further out, Xiaomi-backed chip developer Zhuhai Amicro Technology is preparing a Hong Kong listing that media reports suggest could raise more than USD 100 million.

Buybacks, a Weak Tape and the Next Earnings Date

Management has been active on the capital side. Through September, Xiaomi repurchased millions of its own B-shares across several tranches for cancellation, including two late-month transactions worth HKD 48.9285 million and HKD 62,397,637.8.

The buying has done little to lift sentiment. Asian technology names have come under repeated pressure, with climbing US Treasury yields adding to the gloom. Xiaomi fell 1.49% in Hong Kong on Monday while the broader market edged higher, and it slipped a further 0.6% in the following session.

Investors looking for hard numbers on the group's overall financial health will get them on November 24, 2026, when Xiaomi is expected to report its next quarterly results.