Xiaomi (SEHK:1810) Is Down 9.7% After US Tariff Threats Roil China Tech Shares

• The Hang Seng China Enterprises Index recently saw a significant decline, led in part by Xiaomi Corp. and Alibaba Group, following news that former US President Donald Trump threatened additional 100% tariffs on Chinese goods in response to Beijing's new export controls on critical minerals.
• This escalation in US-China trade tensions has increased market anxiety, particularly among investors in major Chinese tech firms that have global exposure.
• We'll explore how heightened US tariff threats and trade uncertainty might affect Xiaomi's long-term global expansion and margin outlook.

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Xiaomi Investment Narrative Recap

Xiaomi shareholders tend to believe in the company’s ability to evolve from a price-focused smartphone brand into a global ecosystem provider, capturing growth through premium products, global expansion, and smart hardware innovation. While short-term concerns around US tariff threats have weighed on sentiment, these policies do not appear to materially change the company’s fundamental global expansion catalyst or the key risk of margin pressures caused by intense price competition.

Recently, Xiaomi announced continued share buybacks, signaling management’s confidence and a pro-shareholder approach as volatility rises. While unrelated to trade issues, this move may provide near-term support for the share price and aligns with Xiaomi’s ambitions to underpin long-term growth, despite ongoing industry headwinds.

But in contrast, investors should be mindful of how prolonged price wars and margin pressure in the smartphone industry may...

Read the full narrative on Xiaomi (it's free!)

Xiaomi's outlook forecasts CN¥765.2 billion in revenue and CN¥69.6 billion in earnings by 2028. This is based on a projected 21.3% annual revenue growth and an earnings increase of CN¥32.4 billion from the current CN¥37.2 billion.

Uncover how Xiaomi's forecasts yield a HK$66.01 fair value, a 36% upside to its current price.

Exploring Other Perspectives

Sixteen fair value estimates from the Simply Wall St Community range widely from HK$31.49 to HK$100 per share. With such variance, it is clear that opinions differ greatly especially when considering Xiaomi’s margin risks in a fiercely contested smartphone market.

Explore 16 other fair value estimates on Xiaomi - why the stock might be worth over 2x more than the current price!

Build Your Own Xiaomi Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Xiaomi research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Xiaomi research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Xiaomi's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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