Xiaomi's Redmi K90 Ultra and 4 Billion Share Buyback Can't Escape Memory Cost Quintupling and 3.1 Billion Yuan EV Loss
28.06.2026 - 16:07:22 | boerse-global.de
Xiaomi has fired off two salvos aimed at shoring up investor confidence — a 4-billion-share buyback authorization and the June 30 launch of the Redmi K90 Ultra gaming smartphone. Yet neither move has been enough to drag the stock out of the cellar. The shares closed at €2.46, barely above the 52-week low of €2.34, after tumbling 45% since January and 63% over the past twelve months.
The buyback, announced over the weekend, calls on brokers to purchase up to 4 billion B-class shares under an existing 20 billion Hong Kong dollar repurchase framework. CEO Lei Jun is betting that the deeply depressed valuation makes the program an effective way to reduce the share count and cushion the slide. The relative strength index of 19.8 already signals an extreme oversold condition on a technical basis.
None of that masks the fundamental headwinds. The cost of smartphone memory chips has quintupled, Lei Jun revealed, and Xiaomi feels the pain more acutely than most. More than half of its phones retail for under $200, leaving razor-thin margins that evaporate when component prices spike. The smartphone division's gross margin slumped to just 10.1% in the first quarter, while unit shipments fell by nearly a fifth. Management expects the cost pressure to persist for at least two more years.
The new Redmi K90 Ultra, priced at roughly $440, packs a Snapdragon 8 Elite chip and an active air-cooling system aimed at mobile gamers. But it lands in a Chinese mid-range market that is itself under siege. IDC analysts forecast a historic contraction in global smartphone sales, driven largely by the chip shortage. Goldman Sachs has also warned that rising component costs will weigh on Xiaomi's delivery volumes. The company did show some spark with the 17T series, which moved 103,500 units in its debut week, but that is a bright spot in an otherwise dark landscape.
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Xiaomi's electric vehicle division is bleeding even faster. In the first quarter alone, the EV business recorded an operating loss of 3.1 billion yuan, equivalent to roughly $5,600 lost on every car sold. The unit delivered about 150,000 vehicles through May, a long way from the full-year target of 550,000. To bridge that gap, monthly output would need to hit record levels every month until December — a stretch given that May deliveries actually slipped 11% month-over-month.
Lei Jun attempted to reassure the market on the automotive front, noting that the EV testing team has grown to over 800 specialists and stressing quality controls. But the production ramp remains a major variable. The company's smartwatch business, where it holds the third global spot, offers a modest buffer but not enough to reverse the broader trend.
Beyond mobile and cars, Xiaomi continues to push into smart home categories. Over the weekend it unveiled a robot vacuum with 10,000 Pa of suction for roughly €215, alongside new refrigerators in 186-liter and 216-liter sizes. These product extensions help diversify revenue but do little to address the core margin squeeze.
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The buyback itself may provide a floor — as long as the €2.34 level holds. If that support gives way, the technical selling pressure could accelerate despite the share repurchase program. All eyes now turn to August 26, when second-quarter earnings will reveal whether the EV losses are narrowing and whether smartphone margins can hold their ground in a memory-cost storm that shows no sign of easing.
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