Xiaomi’s stock hovers barely above its 52-week floor of €2.82, yet the company just received preliminary approval from Beijing to push into a segment dominated by Li Auto and Huawei’s Aito. The timing underscores a widening gap between regulatory progress and the market’s growing concerns over profitability.
The Chinese Ministry of Industry and Information Technology (MIIT) published Xiaomi’s application for extended-range electric vehicles (EREVs), triggering a public comment period that ends on June 17. Final certification will follow. The first model, internally codenamed “Kunlun N3,” is a full-size SUV measuring over 5.3 meters in length and equipped with a 1.5‑liter range extender. It will be sold under the Skynomad sub‑brand at a targeted price of around 200,000 yuan — undercutting comparable offerings from Li Auto and Aito, which start at 250,000 yuan. A second premium brand, “Xuntian,” has also been registered, hinting at a tiered structure where Xiaomi covers 200,000–300,000 yuan and Xuntian stretches to 500,000 yuan.
That push into new territory comes as Goldman Sachs slashes its second‑quarter earnings forecast by half. The bank now expects adjusted net profit of just 5.4 billion yuan, a 50% plunge year over year, with overall revenue growth limited to 1%. Without the EV and AI segments, revenue would actually shrink 9%. Full‑year profit estimates were cut 12% to 32.8 billion yuan, though Goldman maintains its buy rating and HK$40 price target. The somber outlook follows a first quarter in which Xiaomi’s revenue slid nearly 11% to 99.1 billion yuan and adjusted net profit tumbled 43% to 6.1 billion yuan. CEO Lei Jun has warned that margin pressure from surging memory chip costs will persist for at least another two years.
Should investors sell immediately? Or is it worth buying Xiaomi?
The automotive division is the primary drag. In Q1, the EV segment posted an operating loss of 3.1 billion yuan on revenue of 19.9 billion yuan, translating to a loss of roughly $5,600 per vehicle delivered. Xiaomi has set an ambitious annual delivery target of 550,000 units, but in the first five months of 2026 it managed only 140,000 to 150,000 vehicles. Sales of its YU7 SUV — the only model currently in volume production — collapsed from 37,869 units in January to 9,876 in April. April’s total deliveries did reach 36,702, a 71% jump from March, and May stayed above 30,000 units, but the pace remains far short of what is needed to hit the year‑end goal.
Against this backdrop, Xiaomi’s record‑sized buyback program has failed to reassure investors. The company is authorized to repurchase up to HK$20 billion of Class B shares until the 2027 annual general meeting, a scheme that began on June 2. On June 11 alone it bought back 7.8 million shares — yet the stock closed at its 52‑week low of €2.82. The shares currently trade at €2.89, a 2.6% recovery from that trough, but have shed 35.5% year to date and roughly 50% over the past twelve months.
The next catalysts are the conclusion of the MIIT comment period on June 17 and Xiaomi’s second‑quarter earnings report, expected around August 26. If Goldman’s profit warning proves accurate, the €2.82 support level will face a severe test as investors weigh regulatory green lights against mounting red ink.
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