Xiaomi Gets Green Light for Buybacks and New Shares, Sets Sights on September Chip-Driven Smartphone Launch as Q1 Profits Dwindle

Xiaomi has equipped itself with a dual capital-market toolkit that gives management both cushion and powder. Shareholders at the annual general meeting on June 2, 2026 authorised the board to repurchase up to 10 percent of outstanding shares and to issue as many as 20 percent new Class-B shares. On the same day, the company kicked off a fresh buyback programme worth as much as 20 billion Hong Kong dollars, set to run for twelve months. The moves offer flexibility either to prop up a stock trading near its 52-week low or to raise cash if needed, but they also raise the spectre of dilution — a balancing act that leaves the market guessing.

The shares, at 3.13 euros, have lost 30.3 percent since the turn of the year and sit just 3.05 percent above their 52-week trough of 3.04 euros. They are a full 27.6 percent below the 200-day moving average of 4.32 euros, underscoring the depth of the current slump.

That weakness is rooted in disappointing first-quarter numbers. Total revenue slipped to 99.1 billion yuan from 111.3 billion yuan a year earlier. Adjusted net profit tumbled 43.1 percent to 6.1 billion yuan, while on an unadjusted basis, net income plunged 57 percent to 4.7 billion yuan. Both figures came in well below analyst expectations. Higher memory-chip costs squeezed margins, and smartphone shipments dropped 19 percent to 33.8 million units. Though Xiaomi still ranks among the top three global handset makers with an 11.3 percent market share, volume is shrinking.

The bright spot — and the biggest drain — is the electric-vehicle business. The smart EV, AI and new initiatives unit generated 19.9 billion yuan in first-quarter revenue, but it remains deeply unprofitable. Operating losses in the segment reached 3.1 billion yuan, reflecting the heavy upfront spending required to scale up. Research and development expenses surged 33.4 percent to 8.95 billion yuan, with much of that cash flowing into the EV programme and chip development.

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On the product front, the company is doubling down on its smartphone core. A China launch of the Xiaomi 18 series is widely expected in September, timed to coincide with Qualcomm’s unveiling of the Snapdragon 8 Elite Gen 6. Xiaomi aims to be the first manufacturer worldwide to ship a phone with that processor. The standard model is said to feature a flat 6.4-inch display with 2K resolution. Before the hardware arrives, the company will roll out HyperOS 4, likely between July and August.

The top-of-the-range Xiaomi 18 Ultra, however, has hit a speed bump. Development has been paused temporarily because of rising component costs, according to insider Kartikey Singh. That means the September event will initially showcase just the standard and Pro variants, with the Ultra to follow later — possibly priced above 10,000 yuan for the first time.

Beyond off-the-shelf chips, Xiaomi is pushing its own silicon. Production of the in-house “Xuanjie O3” processor began in June at TSMC using a 3-nanometer process. That makes Xiaomi the fourth company in the world — and the first on mainland China — to field a smartphone chip at that node. The company claims a 15 percent improvement in instructions per clock and a peak-performance boost of more than 30 percent over the predecessor. The first device to carry the O3 will be the foldable MIX Fold 5. But the technological edge is temporary: Apple and Qualcomm are both migrating to TSMC’s 2-nanometer process later this year.

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Xiaomi is also preparing an upgraded version of its XRING chip, confirmed by president William Lu, with a redesigned architecture using prime, titanium and little cores instead of traditional large-core clusters.

All these initiatives demand capital, and the two-pronged mandate from the AGM gives management room to manoeuvre. Yet the buyback is a stopgap, not a solution. The real test will come when the September product wave hits the market and second-half earnings must show whether Xiaomi can stop the smartphone slide, narrow EV losses and convince investors that its ambitious chip and software strategy is more than a high-cost gamble.

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