Don’t let the typical quarterly panic and the shaky hands of would-be traders unsettle you. Anyone with a long-term perspective on the stock market sees the current price as a massive value bargain, since the mathematically fair value is actually between 5 and 6 euros.
The current slump is self-inflicted and temporary. Expensive memory chips are temporarily eating into smartphone margins due to the AI boom, but this will resolve itself in 2 to 4 years thanks to the cyclical nature of the market. At the same time, Xiaomi is being collectively punished due to the “China penalty” and geopolitical fears (Trump). Yet the real electric-car success story, with global expansion starting in 2027, is still ahead. The fact that management is buying back 20 billion HKD worth of its own shares at bargain prices right now shows just how undervalued the company is.
The market is staring in panic at the coming months. Anyone entering this with a 5- to 10-year time horizon is capitalizing on the ignorance of the masses and building real long-term wealth. Buy, sit back, and let the nervous ones sell.
P.S.: The panic over theoretical stock dilution is unfounded anyway. Getting blanket approval for this right at the annual general meeting is standard practice. Theoretically, any company worldwide can and may do this; the key point is that Xiaomi is actually massively canceling shares right now instead of diluting them.
