Xiaomi’s stock spirals to the bottom of Hang Seng Tech Index amid 30% dip since September
The post Xiaomi’s stock spirals to the bottom of Hang Seng Tech Index amid 30% dip since September appeared com. Xiaomi is getting hammered. The company’s shares in Hong Kong have plunged almost 30% since September, wiping out months of gains and leaving it at the very bottom of the Hang Seng Tech Index. The selloff comes as investors brace for earnings out Tuesday, expected to reveal the weakest revenue growth Xiaomi’s seen since 2023, according to Bloomberg. The brutal drawdown follows rising doubts around Xiaomi’s two biggest bets: phones and electric vehicles. Analysts have been cutting their price targets, short sellers are back in force, and hedge funds are increasing bearish positions on growing concerns over factory delays, safety risks, and low EV demand, despite Xiaomi throwing out new promotions. Goldman Sachs says short interest in the company’s Hong Kong-listed shares is creeping back toward 0. 7% of free float, up from 0. 4% in July. Phone margins fall as chips get pricier and iPhone 17 dominates Smartphones are dragging Xiaomi down fast. Monthly contract prices for mobile DRAM chips surged 21% in October, the highest since July 2022, and that’s just the beginning. HSBC says another 10% jump is coming in the next quarter. Those chips are a big chunk of what makes phones run, and they’re now eating into profit margins. Gokul Hariharan, an analyst at JPMorgan, said, “We are still in the midst of pretty much a supercycle in memory. there will be pressure on margins because you can’t pass on all of these costs to consumers.” And that’s the thing. Chinese shoppers aren’t spending much, and Apple’s iPhone 17 is flying off the shelves. Xiaomi can’t just raise prices, which means it’s taking the hit. On top of that, mainland demand isn’t bouncing back. While Xiaomi used to ride China’s consumption wave, this year it’s getting crushed by it. And analysts aren’t optimistic. The average price target.
