In-Depth Analysis of the Hidden Risks to Xiaomi Group (1810.HK)'s Brand Value

Based on the above in-depth analysis, I now provide you with the complete investment research report.

Xiaomi Group’s share price has continued to decline from its 2025 periodic high of HK$61, closing at only HK$38.16 as of January 7, 2026, representing a staggering

drop over the period [0]. This downward trend shows clear bearish arrangement characteristics in short-term technical charts:

Time Period	Price Change	Technical Assessment
Past 1 Month	-10.80%	Significant Decline
Past 3 Months	-29.14%	Deep Correction
Past 6 Months	-33.40%	Deep Correction
YTD	-5.26%	Sustained Weakness

Notably, major U.S. stock indices all posted positive returns over the same period (S&P 500 +4.36%, NASDAQ +5.20), indicating that the weakness in Xiaomi’s share price is not simply affected by the overall market environment, but is driven by company-specific factors [0][1].

Xiaomi is currently advancing multiple fronts including

, each requiring sustained large-scale investment [1]. While this strategic layout demonstrates the company’s ambition, the capital market’s concerns about the continuous erosion of its free cash flow are growing. Financial data shows that although the company’s free cash flow remains positive (CN¥31.998 billion), the expectation of future cash flow pressure is obvious amid aggressive expansion [0].

The market has observed an ironic phenomenon:

[1]. In 2025, multiple institutions invested approximately HK$40 billion in a private placement at HK$53 per share, and this investment has now incurred a floating loss of over HK$8 billion [2]. This combination of “high-level financing + founder share reductions” has seriously impacted the consistency of the market’s judgment on the company’s intrinsic value, shaking the confidence of institutional investors.

China’s consumer electronics industry is shifting from “price wars” to “high-quality development”, and Xiaomi’s traditional

[1]. Securities firms generally forecast:

• 2026 smartphone shipments will decrease from 172 million units in 2025 to 169 million units [3]
• Smartphone gross profit margin is expected to drop from 11.3% in 2025 to 8.9% in 2026 [3]
• IoT business growth rate is expected to slow to 11% [3]

The failure of this “volume-for-price” strategy during the industry transition period directly weakens the moat value of Xiaomi’s core business.

Against the backdrop of the AI technology wave sweeping the technology industry, Xiaomi’s

[1]. Compared with competitors, Xiaomi’s layout in cutting-edge fields such as generative AI and large model applications is obviously lagging, which makes investors doubt its long-term technological competitiveness.

Xiaomi’s automobile business was supposed to be the company’s second growth curve, but in 2025 it became a

for brand reputation:

Event	Time	Impact
Recall of Intelligent Parking System	January 2025	Over 30,000 SU7 units require OTA recall [4]
Serious Accident in Anhui	March 2025	Collision and fire caused by assisted driving resulted in casualties [4]
Carbon Fiber Hood Controversy	May 2025	Approximately 300 car owners initiated collective rights protection [4]
Locked Horsepower Controversy	May 2025	Complaints from car owners over performance requiring “track unlocking” [5]
Recall of Over 110,000 Vehicles	2025	Set a record for recall scale among automakers [6]

Even more worrying is Xiaomi Auto’s

: precise publicity when sales are strong, but vague statements such as “over X ten thousand units” to avoid risks when data fluctuates [6]. This utilitarian consideration has further intensified doubts among consumers and investors about the brand’s integrity.

The

is particularly worthy of vigilance. In 2024, Lei Jun was still a “top influencer in the auto industry”, with over 10 million viewers whenever he went live; in 2025, he has repeatedly apologized – apologizing for the locked horsepower issue, speaking out about the carbon fiber hood controversy, and calling out cyberbullying against car owners [4]. While Lei Jun’s personal halo amplified the brand premium, it also amplifies every mistake, causing double the damage to brand trust.

Multiple international investment banks have lowered Xiaomi’s target price, reflecting market concerns over the revaluation of its brand value [3]:

Investment Bank	Original Target Price	New Target Price	Reduction
JPMorgan	HK$50	HK$45	-10%
Citigroup	HK$65	HK$50	-23%
UBS	HK$53.5	HK$46	-14%
Goldman Sachs	HK$56.5	HK$53.5	-5%

Investment banks’ main reasons for lowering valuations include:

1. Significant pressure on gross profit margin of the smartphone business
   (rising memory prices + weak demand) [3]
2. Negative public opinion about electric vehicles may affect brand image and purchase intent
   [3]
3. Uncertainty over tightened operating expenditures for core businesses
   [3]

From a technical analysis perspective, Xiaomi’s share price exhibits the following characteristics [0][7]:

• MACD Indicator
  : No crossover signal, bearish pattern
• KDJ Indicator
  : K value 31.1, D value 35.9, in oversold territory
• Beta Coefficient
  : 0.86, relatively low volatility
• Support Level
  : HK$37.54
• Resistance Level
  : HK$40.37

Financial analysis shows that the company adopts an

, with a low depreciation/capital expenditure ratio, which may mean limited upside for reported earnings [0]. Although the debt risk rating is “low risk”, the capital consumption brought by multi-front expansion remains a Damocles sword hanging over investors.

The sustained decline in Xiaomi’s share price is by no means a simple price fluctuation, but a reflection of the market’s

. From the “King of Cost-Effectiveness” to a “victim of price wars”, from Xiaomi Auto’s “traffic myth” to the full-blown trust crisis, Lei Jun and the company he founded are facing the most severe brand value challenge since its establishment.

:

1. Strategic level
   : Capital consumption from multi-front operations and uncertainty in growth model transformation
2. Execution level
   : Inadequate product quality control and public relations response in the automobile business
3. Governance level
   : Doubts about the consistency of capital operations and information disclosure

In the short term, Xiaomi needs to use specific business data to prove the rationality of its multi-front operations, respond to market concerns with clear capital planning, and rebuild trust through transparent communication mechanisms. In the long term, the key to reshaping Xiaomi’s brand value lies in how to achieve brand premiumization while retaining its cost-effective genes, and maintain quality reputation amid aggressive expansion [1].

Although the current share price has fallen sharply from its high, the intrinsic value of a company with a 12% global smartphone market share, an IoT ecosystem with over 600 compatible products, and an automobile business that has achieved “profitability upon mass production” is not unquantifiable [1]. The key lies in whether Xiaomi can maintain strategic focus amid the public opinion storm, and win back the trust of the market and investors through real evolution of its products and services.

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[0] Jinling AI Financial Database - Real-time quotes, company profile, technical analysis and financial analysis data of Xiaomi Group (1810.HK)

[1] Sina Finance - “Turbulent Times: Xiaomi Accelerates Its ‘Bottoming Out’” (https://finance.sina.com.cn/cj/2026-01-07/doc-inhfmtvu5229058.shtml)

[2] Tencent News - “The ‘Tycoons’ Who Bottom-Fished Xiaomi Have Failed in the ‘Traffic Myth’” (https://news.qq.com/rain/a/20251111A012UJ00)

[3] Hong Kong Economic Times - “Analysis of 1810 | Why Has Xiaomi Been Hit by Sharp Brokerage Target Price Cuts Despite Beating Quarterly Earnings Expectations?” (https://inews.hket.com/article/4040298/)

[4] Sohu Auto - “Lei Jun Has Become the Negative Reviews Himself: How Many Times Did Xiaomi Auto Go Off Track in 2025?” (https://www.sohu.com/a/963023371_146550)

[5] EET China - “Xiaomi Auto Issues Late-Night Apology in Response to SU7 Ultra Controversy” (https://www.eet-china.com/news/202505088530.html)

[6] News18a - “Why Is Xiaomi Being Opaque About Delivery Data?” (https://www.news18a.com/news/storys_214813.html)

[7] Jinling AI Financial Database - Technical analysis indicator data of Xiaomi Group