Xiaomi’s Conflicting Signals: Higher Phone Targets and a Record Buyback Mask a Steep Profit Slide
Published on 07/21/2026 at 07:33 | Redaktion boerse-global.de
Xiaomi is broadcasting a mixed message to the market. The Chinese electronics group has just lifted its 2026 smartphone sales target to 110 million units from 90 million, while simultaneously ramping up a HK$20 billion share repurchase programme. Yet behind the bullish gestures, first-quarter earnings tell a bleaker story: revenue fell 10.9% to 99.1 billion yuan and adjusted net profit tumbled 43.1% to 6.1 billion yuan, with the electric-vehicle division bleeding 3.1 billion yuan in operating losses despite delivering 80,856 cars.
The smartphone target revision, reported by 36Kr, marks a sharp reversal after Xiaomi had slashed its original goal of 170 million devices twice — first to 135 million, then to roughly 95 million. The earlier cuts were driven by surging memory-chip costs. DRAM prices jumped 90–95% and NAND prices 55–60% in the first quarter of 2026, as Samsung, SK Hynix and Micron diverted capacity toward high-bandwidth memory and server DRAM, squeezing supply for consumer electronics. The global smartphone market is now forecast to shrink 13–14% this year.
Xiaomi’s renewed optimism hinges on an expected stabilisation of memory prices. SK Group Chairman Chey Tae-won has called current pricing “abnormally high” and anticipates a medium-term decline, though he warned of a historically severe shortage of AI memory chips in 2027. For Xiaomi, cheaper standard DRAM and NAND are critical to turning higher volumes into profit, and the company is channelling growth through entry-level devices such as the new Redmi 17 4G — a budget handset with a 7,500 mAh battery, 6.9-inch display and MediaTek Helio G91 Ultra chipset.
Should investors sell immediately? Or is it worth buying Xiaomi?
Investors have taken heart. On Monday the stock closed at €3.15, a 3.82% gain, and over the past 30 trading days it has rallied 18.87%. Still, with the 52-week high of €6.51 touched last September, the shares remain 51.6% below that peak — the recovery only partially reversing a year-long slide. The company is leaning hard on its buyback authority, authorised on June 2. Since then, Xiaomi has repurchased 79.8 million shares in 14 tranches, representing about 0.31% of its capital. On July 15 it bought 3.9 million Class B shares at an average price of HK$25.82, and on July 17 and 18 it acquired a further 3.8 million and 2.8 million shares respectively, for a combined HK$126 million. Counterbalancing these repurchases, Xiaomi issued 54.19 million new shares under its employee stock plan.
Analysts are increasingly cautious about the EV ramp. Astrada Advisors downgraded Xiaomi from Buy to Hold on July 14, citing doubt over whether the auto division can hit its full-year volume targets. The scepticism is understandable: in May, Xiaomi sold more than 30,000 vehicles, trailing market leader Leapmotor’s 81,000, while rivals XPeng and Li Auto also posted higher numbers. International expansion is being prepared — the company has hired a government-relations manager for Malaysia, eyeing a non-China launch in 2027 — but profitability remains distant.
On the robotics front, Xiaomi showed a humanoid robot at July’s WAIC conference in Shanghai. The machine achieved a 98% success rate on automated screw-driving — close to the 99% human benchmark — and 90% on newer tasks such as sorting covers and folding containers. The demonstration underscores Xiaomi’s ambition to diversify beyond phones and cars.
Looking ahead, two events dominate the calendar. Xiaomi is preparing to launch its flagship “Xiaomi 18 Series” with a dual-200-megapixel camera system, alongside the foldable “Mix Fold 5” running HyperOS 4, aimed at strengthening its premium position. More critically, the market will scrutinise second-quarter and first-half 2026 results due on August 26, which will reveal whether the profit slide has deepened or if the new products and buybacks are starting to stabilise the stock.
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