Analysis of the Impact of Lin Bin's $2 Billion Share Reduction Plan on Xiaomi's Valuation

According to the latest announcement, Xiaomi co-founder and vice chairman Lin Bin disclosed a large-scale share reduction plan on December 28, 2025:

[1][2].

This is Lin Bin’s fourth large-scale share reduction. Previously, he had cashed out approximately HK$9 billion through three reductions [1]. Currently, Lin Bin still holds a market value of about HK$85 billion, and the reduction accounts for approximately one-sixth of his holdings [1].

After the reduction plan was announced, Xiaomi’s Hong Kong stock (01810.HK) fell by 3% at the opening on December 29, then recovered somewhat [1][2]. The market reaction shows that investors are sensitive to this news. Wu Lixian, a strategist at Everbright Securities International, pointed out that since the reduction starts in December 2026,

[1].

Shen Meng, executive director of Xiangsong Capital, believes that

[2][3]. Although Xiaomi explained that the funds from the reduction will be used to establish an investment fund and Lin Bin promised to serve the group for a long time, market trust is in doubt. Zhan Junhao, a well-known crisis public relations expert, pointed out that Lin Bin was involved in a controversy over illegal share reduction in 2024, and his credit foundation has been affected [2][3].

From the operational perspective, Xiaomi faces multiple challenges:

• Smartphone Business
  : Gross profit margin is under pressure due to rising prices of memory chips and camera chips [2]
• Automotive Business
  : Although it delivered a record number of units in Q3 2025 and contributed RMB 700 million in operating profit, management has warned of risks from subsidy reductions and intensified competition in 2026 [2]
• IoT Business
  : Growth is sluggish due to subsidy reductions [3]

The market is worried that as vice chairman and strategic vice president, Lin Bin is well aware of these pressures, and

[2].

Industry insiders analyze that the reduction amount is large ($2 billion) and lasts for four years (executed in 5 phases),

[1][2]. Xiangsong Capital pointed out that the secondary market stock price will be under pressure due to the reduction news. Regardless of the reason explained, the result is that more shares enter the circulation market, increasing supply and putting direct pressure on prices [2].

Market analyst Bai Wenxi suggested that in the face of sustained reduction pressure,

to “self-digest” the liquidity generated by the reduction [2][3]. The company needs to quickly convert high investments into profit realization from automobiles and high-end smartphones, using fundamentals to offset the emotional discount brought by “insider selling”.

Overall, Lin Bin’s $2 billion reduction plan has

[2]. Whether the impact can be truly diluted depends on:

• The company’s subsequent repurchase efforts [2]
• The speed of performance realization and the degree of improvement in profitability [2]
• The delivery volume and profit contribution of the automotive business [2]
• The improvement in market share of high-end smartphones [3]

Impact Dimension	Impact Degree	Duration
Short-term stock price fluctuation	Negative but limited	Recovery after immediate reaction
Market sentiment	Slightly negative	Persists before reduction starts
Valuation center	Under pressure	Depends on fundamental performance
Investor trust	Challenged	Needs performance proof

: The impact of Lin Bin’s reduction plan on Xiaomi’s valuation tends to be . Since the reduction time is set at the end of 2026, the actual short-term direct impact is relatively limited [1]. However, in the long run, if the company cannot effectively hedge through performance growth and repurchase plans, a valuation discount may form [2][3]. Xiaomi is currently in a critical period of automotive business expansion and brand reputation repair, and the executive reduction plan may intensify market doubts about strategic stability [2][3].

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[1] Yicai - “After Lei Jun increased his holdings by HK$100 million, Lin Bin announced a $2 billion Xiaomi share reduction plan” (https://www.yicai.com/news/102978970.html)

[2] 36Kr - “During Lei Jun’s low-profile period, brother Lin Bin cashed out RMB 14 billion from Xiaomi” (https://m.36kr.com/p/3617393948312832)

[3] Sina Finance - “During Lei Jun’s low-profile period, brother Lin Bin cashed out RMB14 billion from Xiaomi” (https://finance.sina.cn/stock/ssgs/2025-12-29/detail-inhenpkc7813393.d.html)