Xiaomi's Q1 Profit Drops 43% as AGM Approves Buyback and Issuance Leeway, AirDrop Integration Kicks Off

Xiaomi's annual general meeting on June 2 cleared all resolutions — including a special amendment to the company's articles of association — just as the Chinese electronics giant reported a steep slide in first-quarter earnings. The governance moves grant the board fresh flexibility to support the stock through buybacks or raise capital via share issuance, a dual mandate that arrives at a time when the company's core business is under considerable strain.

The operating numbers for the three months ended March 2026 were stark. Group revenue fell to 99.1 billion renminbi from 111.3 billion a year earlier, while adjusted net profit tumbled 43.1 percent to 6.1 billion renminbi. Xiaomi's electric vehicle, AI and new initiatives segment contributed roughly 19.9 billion renminbi — about 20 percent of total revenue — with a gross margin of 20.1 percent. Its smartphone and AIoT core business generated 79.3 billion renminbi, underscoring that the nascent EV operations have yet to offset the decline in the company's traditional stronghold.

On the shareholder mandate front, the board received authorization to buy back up to 10 percent of the issued shares and to issue, allot or transfer Class-B shares equivalent to as much as 20 percent of the outstanding total — including transfers from treasury. A built-in expansion clause allows the issuance mandate to be topped up by the number of shares repurchased under the buyback program, capped at an additional 10 percent. The new on-market buyback program, announced on May 26 and effective June 2, permits repurchases of up to 20 billion Hong Kong dollars in Class-B shares over the next twelve months. Under the previous program, Xiaomi had already bought back about 399.6 million shares for roughly 14.6 billion Hong Kong dollars.

Should investors sell immediately? Or is it worth buying Xiaomi?

Adding to the mix, Xiaomi expanded its ecosystem reach on June 1 by integrating Apple's AirDrop protocol into its "Quick Share" feature, starting with the 17T Pro and rolling out to more models. The move, powered by Google's underlying technology, lets users transfer files directly between Xiaomi devices and Apple hardware — a tactic aimed at lowering the switching barrier for consumers who straddle Android and iOS in the premium segment. The company also began global sales of the Redmi Watch 6, a smartwatch featuring a 2.07-inch AMOLED display with 2,000 nits peak brightness, up to 24 days of battery life, more than 150 sports modes, GNSS positioning and SpO2 monitoring. Complementary accessories such as a modular flashlight with 2,500 lumens and the Bluetooth Remote 2 Pro with NFC screen mirroring further flesh out the product lineup.

The stock's weakness persists despite these efforts. Xiaomi shares changed hands at around 3.24 euros, just above the 52-week low of 3.08 euros reached in late May, and have lost nearly 28 percent since the start of the year and roughly 46 percent over the past twelve months. The relative strength index hovers near 77, signaling short-term overbought conditions even though the price remains well below its 200-day moving average. A broader recovery in Chinese tech names on Tuesday lifted the Hang Seng Index by 2.5 percent, with Tencent gaining on AI progress and Alibaba spiking as much as 6 percent, but Xiaomi failed to join the rally. The board now has the tools to either support the stock through buybacks or dilute it via share issuance — decisions that will hinge on how quickly the company's hardware expansion and ecosystem opening translate into tangible market share gains. Those answers will likely become clearer with the next quarterly report.

Ad

Xiaomi Stock: New Analysis - 3 June

Fresh Xiaomi information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.

Read our updated Xiaomi analysis...

en | KYG9830T1067 | XIAOMIS | boerse | 69474891 |