Xiaomi's August Board Meeting: A Dividend Call Wrapped in Margin Pressure and EV Ambition
Published on 08/10/2026 at 14:02 | Redaktion boerse-global.de
When Xiaomi's board convenes on August 18, the agenda carries more weight than the typical mid-year check-in. Directors will review the unaudited consolidated interim results for the first half of 2026 and, crucially, decide on a dividend payout — a decision that will signal how much confidence management truly has in its own balance sheet after a bruising start to the year.
The stakes are elevated by what came before. The first quarter painted a sobering picture: revenue fell to 99.142 billion yuan, down 10.9 percent year-on-year, with the smartphone division — still the company's core — contracting to 44.273 billion yuan from 50.612 billion yuan in the prior-year period. Group gross margin came in at 22.0 percent.
The earnings picture was even more layered. Adjusted net profit dropped 43.1 percent to 6.07 billion yuan, a figure that nonetheless beat market expectations. But under GAAP accounting, the picture darkened considerably: net income plunged 57 percent to just 4.72 billion yuan. That gap between adjusted and reported profitability has analysts questioning the quality of the underlying earnings.
Management has already recalibrated expectations for the full year, guiding toward an 8 percent gross margin in the smartphone business and projecting overall revenue to decline roughly 10 percent in 2026. The margin squeeze traces directly to the cost side: DRAM and NAND flash memory chip prices have doubled over recent quarters, driven by supply constraints and surging demand from AI data centers — a headwind that cuts straight through Xiaomi's electronics operations.
The EV division offers a counter-narrative
Not everything is pointing downward. The electric vehicle business generated approximately $2.8 billion in first-quarter revenue, up 5 percent year-on-year, and management is holding to a delivery target of around 550,000 EVs for the full year — a figure well above the 410,000 units previously circulated internally. Whether that ambition is realistic, however, remains an open question.
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The skepticism has been reflected in a steady drumbeat of analyst downgrades since February. Astrada Advisors cut its rating from "Buy" to "Hold" in July, citing uncertainty over the EV delivery target. J.P. Morgan lowered its price target from HK$45 to HK$38 in February, maintaining a "Neutral" stance and pointing to weaker smartphone margins and slower EV adoption. Jefferies followed in March, downgrading to "Hold" and slashing its target from HK$43.36 to HK$30.45, citing an expected 31 percent decline in global smartphone shipments for 2026. Bocom International moved to "Neutral" in April, flagging fading EV momentum and rising cost pressure.
The EV segment's financials add another layer of concern: the electric vehicle and AI innovation unit posted an operating loss of 3.1 billion yuan in the first quarter, reversing the full-year profit it recorded in 2025. One bright spot emerged from the AIoT platform, which reached 1.119 billion connected devices excluding smartphones, tablets, and laptops — an 18.5 percent increase year-on-year.
Buybacks as a statement of intent
Despite the operational headwinds, Xiaomi has doubled down on capital returns. A share repurchase program of up to HK$20 billion in Class-B shares, authorized on the same day the disappointing first-quarter results were released, runs for twelve months starting June 2. Under the previous program, the company had already bought back roughly 399.6 million Class-B shares for about HK$14.6 billion. An additional automated buyback of up to HK$4 billion launched in June and runs through year-end 2026 or until fully utilized.
The juxtaposition of weak operating results and aggressive capital return suggests management views the share price decline as overdone. The market, for now, remains cautious: the stock trades at €3.08, up 1.28 percent on the day, but still down 28.90 percent year-to-date and 52.96 percent below its 52-week high of €6.54 from last September. The shares also sit 17.43 percent below their 200-day moving average, pointing to an intact medium-term downtrend.
Europe becomes the next frontier
Beyond the balance sheet, Xiaomi is pressing forward with international expansion. The company has announced its European debut at IFA 2026 in Berlin, scheduled for September 4-8, where it plans to showcase its "Human × Car × Home" ecosystem to a European audience alongside multiple product premieres. The push is backed by planned investments of €7.4 billion in AI research and development between 2026 and 2028, with Europe positioned as an innovation hub. Globally, Xiaomi says it will invest over €24 billion by 2030 across artificial intelligence, electric vehicles, robotics, and operating systems.
Adding to the narrative, Handelsblatt has reported that Stellantis is in talks with both Xiaomi and rival Xpeng about a potential cooperation that could include stakes in European automotive brands — a development that would give Xiaomi a foothold in Western car markets.
The August 18 results will now serve as the test of whether the first quarter marked the trough in revenue and margins, or whether the downward trajectory has further to run. The dividend decision, in that context, becomes more than a routine board item — it is a measure of how much conviction management carries into the second half.
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