Xiaomi’s Record HK$20 Billion Buyback Fails to Stem 45% Slide: Analysts Cut Targets Ahead of August 26 Earnings

The Chinese smartphone and electric-vehicle maker Xiaomi is fighting a two-front battle, and despite the largest share buyback in its history, the stock continues to bleed. Listed in Hong Kong and trading on the Frankfurt exchange at €2.48, the shares have now slumped almost 45% since the start of the year and are sitting just above their 52-week low. The massive HK$20 billion (around €2.4 billion) repurchase program, approved in early June, has failed to absorb the selling pressure—short sellers have built positions equivalent to roughly 9% of the free float, betting on further declines.

Xiaomi’s core smartphone business is being squeezed by soaring memory chip costs. The price of smartphone memory has jumped fivefold in recent months, while TV chips have risen tenfold, savaging gross margins in a segment where 62% of devices sell for under $200. In the first quarter, group revenue fell to 99.1 billion yuan, nearly 11% lower year-on-year and below the 103.4 billion yuan analysts had expected. Adjusted net profit collapsed 43% to 6.1 billion yuan. Management warned that procurement costs will likely keep climbing over the next two years, and CEO Lei Jun has advised consumers not to delay smartphone purchases.

The EV division, billed as Xiaomi’s next growth engine, is burning cash at an alarming rate. The segment generated 19.9 billion yuan in sales during the first quarter but posted an operating loss of 3.1 billion yuan—equivalent to roughly $5,600 lost on each vehicle delivered. Sales of the high-end SU7 Ultra model have disappointed, and the newer YU7 SUV saw deliveries slump from nearly 38,000 units in January to fewer than 10,000 in April. The annual target of 550,000 deliveries already looks out of reach. By the end of May, Xiaomi had delivered just over 150,000 vehicles. To hit the goal, it would need to average 57,500 units per month from June through December—nearly 15% above its current record of 50,000. Jefferies has already slashed its full-year forecast to 495,000 and downgraded the stock to “Underperform.”

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

Goldman Sachs expects the pain to intensify in the second quarter, forecasting adjusted net profit of just 5.4 billion yuan—half the prior-year figure—with total revenue growth of only 1%. Excluding the EV and AI businesses, revenue would actually shrink 9%. The bank cut its annual profit estimate by 12% to 32.8 billion yuan but maintains a buy rating with a Hong Kong dollar target of HK$40. Other indicators reflect the strain: the relative strength index (RSI) has dropped to 20, deep in oversold territory, yet the selling pressure persists.

Xiaomi is pinning its hopes on a wave of product releases. The new HyperOS 4 operating system is slated for a China launch in July or August 2026, with a global rollout to follow weeks later. The flagship Xiaomi 18 Pro is expected in China by September 2026, though international availability may not come until the first quarter of 2027. The company is also plowing roughly 40 billion renminbi into research and development this year. But the near-term catalysts are clear: the monthly EV delivery figures for June, due soon, will show whether the production ramp is accelerating. The most critical test comes on August 26, when Xiaomi reports second-quarter results. With analysts already paring estimates and the buyback failing to prop up the stock, the bar for a positive surprise is extraordinarily low.

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