Xiaomi is a multinational tech company originating from China. It first gained fame as a high-quality low-to-midrange phone manufacturer. Since then, it has branched out into multiple different avenues, including tech peripherals, smart home devices, and EVs. Xiaomi trades publicly on the Hong Kong Stock Exchange under the ticker symbol 1810.HK.
Xiaomi, headquartered in Beijing, China, has operated as a publicly traded company since June 2018. It trades on the Hong Kong exchange under the ticker XIACF.
This article will serve as a trader’s rundown of the company. It will include important historic information, Xiaomi stock price performance, and important recent developments.
Xiaomi – History and general info
Lei Jun and a group of co-founders founded Xiaomi in 2010.
The full list is:
- Lei Jun
- Lin Bin
- Zhou Guangping
- Liu De
- Li Wanqiang
- Wong Kong-Kat
- Hong Feng
- Wang Chuan
Lei, at the time, had already had multiple successful business undertakings, which include Kingsoft and Joyo.com (sold off to Amazon).
Xiaomi started as an online-only brand, operating without brick-and-mortar stores in its early days. It released its first phone in 2011.
By 2014, the company had decided to expand beyond China and opened an international office in Singapore.
At the time, around 94% of its revenue was coming from phone sales. However, this was also around when the company started diversifying, and moving a part of its production to consumer electronics.
Xiaomi’s business model hinges on maximising efficiency and reducing waste. This allows the brand to underprice competitors consistently while outperforming products in a similar price range. A part of how the company achieves this is by keeping its products on the market for longer than competitors.
This allows it to keep consumer costs at a level relatively close to manufacturing costs. Additionally, it aims to keep inventory low, utilising inventory optimisation and flash sales.
Por um lado, latest major Xiaomi venture involves EVs, with it announcing a $10 billion investment in 2021. In 2023, Xiaomi revealed its first vehicle, the SU7. The company eventually strives to become one of the five leading car manufacturers globally.
Xiaomi shares show 340% YOY growth
The first Xiaomi development is quite an impressive one, as its stock has leapt 340% within a year. This news comes from February this year and while it’s fascinating nonetheless, there is a bit of a numbers game afoot.
Namely, the 340% comes from comparing that specific day to a dip in the previous year. This, of course, takes nothing away from the company’s great showing, with it managing to add $130 billion in market value.
Analysts have called this a near-perfect execution for the company.
The stock push mainly stems from EV results and market confidence surrounding them. There still may be room for slight improvements in the smartphone sector, Xiaomi’s former bread-and-butter.
It has also far overperformed in 2024’s Q4, beating analyst predictions handily. It has shown revenue growth of nearly 50% (48.8%), recording a whopping $15.1 billion run. The adjusted net profit number leaves an even stronger impression, at 69.4%. This beats the already optimistic analyst prediction of 43%.
Before the Q4 report’s release, options traders eyed a 7.4% move in either direction. This marked the release as particularly important for Xiaomi, as market tensions more than doubled compared to the usual 3.3% move outlook.
Xiaomi increases EV production goals, plans to expand Mi Home store network
Tailing the fantastic Q4 performance, Xiaomi has decided to capitalise on the momentum and increase target EV sales from 300,000 to 350,000. Additionally, it plans to spread its MI Home store network both in China and globally. Internationally, 10,000 stores are planned.
EV expectations are fuelling optimism for Xiaomi, as a new, Tesla-like YU7 model is set for a summer release.
Additionally, the tech company intends to start shipping vehicles internationally as well. If current expectations hold up, international markets could welcome Xiaomi EVs in 2027.
Xiaomi raises $5.5 billion in share sale
On Monday, March 25th, Xiaomi had a stock sale, selling off 800,000 shares at a 6.6% discount from the previous day’s close. It had planned to sell 750,000 initially, but increased the number during the bookbuilding process.
This was likely done due to interest that exceeded expectations, as more than 200 investors tried to take positions but were oversubscribed during bookbuilding.
The final price during the sale hovered near the published HK$52.80 to HK$54.60 price range. The previous day closed at HK$57. The top 20 investors collected about 66% of the discounted shares sold.
Xiaomi’s March EV production breaks previous record
China’s EV market is seeing fierce competition, as multiple companies compete in a relatively unexplored area. BYD remains the definite leader, but without any room for complacency as Xiaomi, Xpeng and Leapmotor deliver nearly 30,000 vehicles.
In a post on prominent Chinese social media, Weibo, Xiaomi has announced that it has significantly exceeded its regular production quantities.
In March, it produced 29,000 EVs, compared to around 20,000 in the five months prior. Further increases in production will be necessary if the company is to reach its goal of 350,000 EVs in 2025.
SU7 vehicle involved in fatal highway crash
An SU7 electric vehicle was involved in a fatal accident on the Deshang Expressway in eastern China on March 29th. The car collided with a concrete pillar, resulting in the deaths of the three passengers.
The vehicle was set to Xiaomi’s NOA (Navigate on Autopilot) feature prior to the crash.
The system malfunctioned due to an error that happened when it encountered an obstacle when shifting lanes in a construction zone.
This prompted the system to issue a warning upon which the driver took control and began to decelerate, but this was not enough to prevent the crash at 116 kph.
The unfortunate event has sparked debate regarding the reliability of Xiaomi EV autopilot functions. While it has Forward Collision Warning (FCW) and Autonomous Emergency Braking (AEB) functions, they only detect other vehicles, not small obstacles.
Xiaomi has stated that its NOA system falls under L2 driving assistance. That means that the human driver is meant to maintain constant control and full attention.
After the crash, the Xiaomi stocks fell 5.49% before markets closed, translating to a HK$70 billion loss. Further losses followed the next day, totalling around HK$120 billion.
Trading Xiaomi Stock with T4Trade: Opportunities and Risks
Xiaomi has quickly become a tech powerhouse, with its bold ventures into the EV market and impressive growth in its core electronics business.
Forex traders looking to capitalize on Xiaomi’s rapid rise can find plenty of opportunities.
With the company’s remarkable 2024 performance, including nearly 50% revenue growth and a record-breaking stock surge, there’s a strong case for the stock’s potential, especially driven by their ambitions in the electric vehicle space.
Their increased EV production targets and international expansion of the MI Home store network are solid growth signals.
However, it’s not all smooth sailing. The tragic accident involving the SU7 electric vehicle has raised concerns about the reliability of Xiaomi’s autopilot systems, which led to a significant dip in the stock price.
For traders, this means understanding the balance of opportunity and risk. With T4Trade’s advanced tools, traders can stay on top of Xiaomi’s share performance, monitoring shifts in market sentiment and adapting to news events in real-time.
Whether you’re a fundamental trader or sentiment-driven, Xiaomi’s stock offers a dynamic landscape for those ready to navigate both the potential rewards and the risks.
INFORMAÇÃO LEGAL IMPORTANTE: Esta informação não deverá ser considerada como aconselhamento ou recomendação ao investimento, mas apenas como comunicação de marketing.
