Xiaomi announces HK$2.5 billion buyback as competition and cost pressures weigh on stock

• By Dylan Butts
• Tue, Jan 27
• 1514
• 121

Chinese tech giant Xiaomi announced a stock buyback program worth up to HK$2.5 billion ($321 million) on Friday, boosting its shares by over 2% as the company seeks to reassure investors amid rising costs, product safety concerns, and intense competition.

Despite the day's gain, Xiaomi's stock remains down more than 8% year-to-date, reflecting persistent challenges in its smartphone and electric vehicle businesses. The buyback, set to begin January 23, follows recent repurchases including 4 million shares bought on January 13.

Analysts attribute recent pressure to a looming memory chip shortage driven by AI industry demand, which is squeezing margins for smartphone makers. "2026 is going to be challenging not just for Xiaomi but for many Chinese OEMs," said Ivan Lam of Counterpoint Research.

Xiaomi's EV segment also faces headwinds, including a price war in China's crowded market and a modest 550,000-unit delivery target for 2026 that disappointed some investors. Changes to Beijing's EV subsidy policies are expected to further pressure margins.

Longer-term, Xiaomi is investing heavily in internal semiconductor development, committing 50 billion yuan over the next decade, and plans to expand its electric vehicle business globally following the launch of its premium SU7 Ultra.

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