Inside the HK$20 Billion Buyback Program

The single-day repurchase was part of a much larger capital deployment strategy. Following its annual general meeting, Xiaomi's board adopted a new on-market share repurchase program effective June 2, 2026, replacing the prior plan .

Key parameters of the new program include:

• Total authorization: Up to HK$20 billion (approximately $2.55 billion), making it the largest buyback in the company's history .
• Duration: The program is valid for 12 months from the adoption date .
• Pace of execution: The company accelerated repurchases in early June. It bought 3.6 million shares for ~HK$98 million on June 8, another 3.7 million shares for ~HK$97.4 million on June 10, and the 7.8 million share block on June 11 .

Since the program began, Xiaomi had cumulatively repurchased 22.1 million shares by June 11, representing 0.09% of its issued share capital . The company's substantial cash reserves of 220.6 billion yuan provide ample financial flexibility for continued buybacks, but so far, the program has utterly failed to restore investor confidence .

The Goldman Sachs Warning That Spooked Investors

Compounding the sell-off, Goldman Sachs published a research report on June 11 forecasting that Xiaomi will deliver "relatively weak" second-quarter 2026 results . The investment bank's grim projections include:

• Revenue growth: Just 1% year-over-year. Excluding new business segments such as electric vehicles and AI, core revenue is expected to decline by 9% .
• Adjusted net profit: Forecast to plunge 50% year-over-year to RMB 5.4 billion and decline 11% quarter-over-quarter .
• Full-year core profit: Projected to reach RMB 32.8 billion, representing a 12% year-over-year decline .

The warning landed heavily because it followed an already disastrous first quarter. Q1 2026 adjusted net profit had dropped 43.1% to RMB 6.07 billion, missing analyst consensus . On a reported (GAAP) basis, net income crashed 57% to RMB 4.72 billion .

Goldman Sachs did, however, note potential catalysts on the horizon, including a planned REEV SUV launch in about three months and the expected release of Xiaomi's AIOS in the third quarter, but maintained its Buy rating on the stock .

The Forces Crushing Xiaomi's Business

Smartphone Shipments Are in Freefall

Xiaomi's foundational smartphone business is under severe pressure. Q1 2026 smartphone shipments fell nearly 20% year-over-year to 33.8 million units, though the company maintained its #3 global ranking for the 23rd consecutive quarter .

The primary culprit is a sharp increase in memory-chip costs. Soaring DRAM and NAND flash prices have squeezed smartphone profit margins and forced price increases on consumers . Smartphone revenue for the quarter fell 12.5%, and the segment's EBIT plunged 70% year-over-year .

Overall Q1 revenue dropped 10.9% to RMB 99.1 billion, representing the company's first quarterly revenue contraction in nearly three years . The global smartphone market itself is forecast to decline 13.9% in 2026, according to IDC , creating a brutal operating environment.

The EV Gamble Still Isn't Paying Off

Xiaomi's electric vehicle segment, once a source of investor enthusiasm, has become a significant drag. In Q1 2026, the EV and AI innovation segment posted an operating loss of 3.1 billion yuan, reversing the annual profit achieved in 2025 . Slower-than-expected deliveries and intensifying competition in China's EV price war have weighed heavily on the business .

Rising competition and valuation pressure in the EV space continue to concern investors, who increasingly view the segment as a cash-burning venture that is years away from becoming a reliable profit center .

Jefferies Delivers a Damaging Downgrade

On May 27, 2026, Jefferies downgraded Xiaomi from Hold to Underperform and slashed its price target by 14% to HK$25.49 . The analysts cited a first-quarter earnings miss at the EBIT level, coupled with elevated market expectations and EV valuation pressure .

Jefferies highlighted three simultaneous headwinds: diminishing smartphone profit margins, declining EV sales, and surging memory-chip costs that show no sign of abating . The brokerage noted that Xiaomi's core smartphone business is caught in a vise between rising component costs and fierce competitive pricing pressure, while the EV ramp remains far from break-even .

In effect, Xiaomi is fighting a multi-front war. The company's massive buyback signals management's belief that the stock is undervalued, but for now, the market's verdict is clear: until the underlying business fundamentals stabilize, no amount of share repurchases will put a floor under the stock price.

Inside the HK$20 Billion Buyback Program

The single-day repurchase was part of a much larger capital deployment strategy. Following its annual general meeting, Xiaomi's board adopted a new on-market share repurchase program effective June 2, 2026, replacing the prior plan .

Key parameters of the new program include:

• Total authorization: Up to HK$20 billion (approximately $2.55 billion), making it the largest buyback in the company's history .
• Duration: The program is valid for 12 months from the adoption date .
• Pace of execution: The company accelerated repurchases in early June. It bought 3.6 million shares for ~HK$98 million on June 8, another 3.7 million shares for ~HK$97.4 million on June 10, and the 7.8 million share block on June 11 .

Since the program began, Xiaomi had cumulatively repurchased 22.1 million shares by June 11, representing 0.09% of its issued share capital . The company's substantial cash reserves of 220.6 billion yuan provide ample financial flexibility for continued buybacks, but so far, the program has utterly failed to restore investor confidence .

The Goldman Sachs Warning That Spooked Investors

Compounding the sell-off, Goldman Sachs published a research report on June 11 forecasting that Xiaomi will deliver "relatively weak" second-quarter 2026 results . The investment bank's grim projections include:

• Revenue growth: Just 1% year-over-year. Excluding new business segments such as electric vehicles and AI, core revenue is expected to decline by 9% .
• Adjusted net profit: Forecast to plunge 50% year-over-year to RMB 5.4 billion and decline 11% quarter-over-quarter .
• Full-year core profit: Projected to reach RMB 32.8 billion, representing a 12% year-over-year decline .

The warning landed heavily because it followed an already disastrous first quarter. Q1 2026 adjusted net profit had dropped 43.1% to RMB 6.07 billion, missing analyst consensus . On a reported (GAAP) basis, net income crashed 57% to RMB 4.72 billion .

Goldman Sachs did, however, note potential catalysts on the horizon, including a planned REEV SUV launch in about three months and the expected release of Xiaomi's AIOS in the third quarter, but maintained its Buy rating on the stock .

The Forces Crushing Xiaomi's Business

Smartphone Shipments Are in Freefall

Xiaomi's foundational smartphone business is under severe pressure. Q1 2026 smartphone shipments fell nearly 20% year-over-year to 33.8 million units, though the company maintained its #3 global ranking for the 23rd consecutive quarter .

The primary culprit is a sharp increase in memory-chip costs. Soaring DRAM and NAND flash prices have squeezed smartphone profit margins and forced price increases on consumers . Smartphone revenue for the quarter fell 12.5%, and the segment's EBIT plunged 70% year-over-year .

Overall Q1 revenue dropped 10.9% to RMB 99.1 billion, representing the company's first quarterly revenue contraction in nearly three years . The global smartphone market itself is forecast to decline 13.9% in 2026, according to IDC , creating a brutal operating environment.

The EV Gamble Still Isn't Paying Off

Xiaomi's electric vehicle segment, once a source of investor enthusiasm, has become a significant drag. In Q1 2026, the EV and AI innovation segment posted an operating loss of 3.1 billion yuan, reversing the annual profit achieved in 2025 . Slower-than-expected deliveries and intensifying competition in China's EV price war have weighed heavily on the business .

Rising competition and valuation pressure in the EV space continue to concern investors, who increasingly view the segment as a cash-burning venture that is years away from becoming a reliable profit center .

Jefferies Delivers a Damaging Downgrade

On May 27, 2026, Jefferies downgraded Xiaomi from Hold to Underperform and slashed its price target by 14% to HK$25.49 . The analysts cited a first-quarter earnings miss at the EBIT level, coupled with elevated market expectations and EV valuation pressure .

Jefferies highlighted three simultaneous headwinds: diminishing smartphone profit margins, declining EV sales, and surging memory-chip costs that show no sign of abating . The brokerage noted that Xiaomi's core smartphone business is caught in a vise between rising component costs and fierce competitive pricing pressure, while the EV ramp remains far from break-even .

In effect, Xiaomi is fighting a multi-front war. The company's massive buyback signals management's belief that the stock is undervalued, but for now, the market's verdict is clear: until the underlying business fundamentals stabilize, no amount of share repurchases will put a floor under the stock price.