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Xiaomi

$$1810 (+1.66%) extremely punished by the market - but why?

Turnover and profits are growing strongly, records are being broken one after the other. Particularly impressive: the EV division, which has managed to become profitable within a year.

In addition, the company has 13 billion euros in cash and only 2 billion euros in debt (10% of market capitalization). This strong balance sheet allows the company to continue to invest aggressively even when the share price is weak.

In addition, there are rumors that Xiaomi now also wants to get into humanoid robotics.

Significant share buybacks and otherwise largely positive news complete the picture.

This makes the current valuation all the more incomprehensible.

5 Comments

Faule S.@Faule_Socke

The fact that Xiaomi shares (A2JNY1) are currently under so much pressure - with a price drop of around 17% in January 2026 alone and a drop of around 40% in a half-year comparison - is due to an unfavorable mix of home-grown challenges and global market risks.

Although Xiaomi is delivering operationally in some areas (such as e-cars), investors are currently worried. Here are the main reasons for the current "punishment":

1. the "cost shock" in the core business
The smartphone business is still the most important profit driver. However, a storm is brewing here:

Margin pressure from memory chips: Prices for memory components (DRAM/NAND) have risen massively. Xiaomi has already warned that this will put pressure on gross margins in 2026.

Reluctance to buy: Consumption is weakening in China. At the same time, Xiaomi is losing market share in the lucrative premium segment to Apple (iPhone 17) and Huawei.

2. skepticism about the e-car miracle (EV)
Xiaomi delivered an impressive 410,000 vehicles in 2025 and exceeded its own targets, but the market sees risks:

Price war in China: to stand up to Tesla and BYD, Xiaomi has to offer aggressive discounts and low-interest financing (e.g. for the new YU7 model). This eats away at the division's hard-won profitability.

Quality concerns & accidents: Reports of accidents and technical problems with SU7 models have shaken investor confidence in the short term.

Export delay: While competitors such as BYD are already expanding worldwide, Xiaomi is not planning its big step into Europe until 2027. Until then, the company will remain dependent on the volatile Chinese market.

3 Geopolitics and forecast cuts
Goldman Sachs & Co: Well-known analysts lowered their earnings forecasts for the next two years at the end of January 2026. Such downgrades often lead to automated selling by institutional investors.

"Trump effect": US trade policy under Donald Trump (tariffs on components, more difficult market access) hangs over Chinese tech stocks like the sword of Damocles.

Conclusion: The market is punishing Xiaomi because the Group is growing strongly, but sees its profitability under massive threat from external factors in 2026. The share is currently testing important technical support levels (around EUR 3.80 / HKD 4.00).

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doyoueventradebro@doyoueventradebro

@Faule_Socke very well explained, thank you for that!

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Faule S.@Faule_Socke

@doyoueventradebro You're welcome. Xiaomi was one of my "youthful sins" 😀
Struggled with it for half a year before I realized that my money could work better elsewhere.

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Musikerie@Musikerie

CCP is the reason for the valuation. The figures are one thing, as far as they are correct. But in addition to numbers and graphs, there is always a dynamic reality in which the whole thing takes place.

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Daniel@Daniel1212

I think so too. That's why I joined last week :)

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