Worrying Mindset: Holding onto stocks persistently, observing calmly like a Buddhist, and paying attention to the fulfillment of “ecosystem premium.”
I. Market Overview: From 2025’s “Mania” to 2026’s “Consolidation”
2025 was a strong year for the Hong Kong stock market, with the Hang Seng Tech Index rising by 23.45% throughout the year – its best performance since inception. However, as we entered January 2026, the market transitioned into a clear pattern of “two upward trends and one pullback.”
Xiaomi stabilized above the HK$40 mark in November last year primarily due to better-than-expected Q3 earnings and strong buybacks by Lei Jun and the company. However, recent share prices have experienced a certain degree of retraction, currently fluctuating between 35-38 HKD, with the market digesting two key factors: the redesign period for the SU7 and sales overruns for the Ultra high-end vehicle model.
II. Xiaomi’s Recent Volatility: SU7 Ultra’s “High Price, Few Buyers” and YU7’s “Cornerstone”
- Product Line Disconnect:
- Recent data shows that Xiaomi SU7 Ultra’s sales plummeted to double digits (45 units) in December 2025. This demonstrates that ultra-luxury models (over $500k) are more a symbol of the brand than a sales foundation.
- SU7 Refinement Pressure: Currently, SU7 is in a refinement transition period, with the next generation expected to debut in April. This “new vs. old replacement” has resulted in approximately a 22% month-over-month decline in January deliveries and consequently put pressure on the stock price.
- YU7’s Ecosystem Premium:
- Fortunately, the SUV model YU7 (Xiaomi’s second car) performed exceptionally stably, consistently topping the mid-to-large SUV sales charts for several months. This confirms my previous notes regarding “ecosystem premium” – MIUI members’ conversion rate for family vehicles (SUVs) is significantly higher than that for pure performance sedans.
- The “Floor Price” Support from Repurchase:
- Xiaomi recently repurchased 4.2 million shares for a total investment of RMB 1.5 billion. This “rising stock price, immediate buyback” strategy has established a psychological “leftmost safety margin” for the stock price.
III. Horizontal Comparison: The “Collective Cooling” of the New Energy Vehicle Sector
Looking at the comparison, Xiaomi’s 39,000 deliveries in January performed reasonably well during a period of industry decline (January is typically a seasonal low):
- BYD: January new energy vehicle sales reached 210,000 units, with year-on-year and month-over-month declines of approximately 30%.
- XIAO & LI (Weilai): Similarly facing delivery fluctuations, particularly in the pure electric sedan market, due to excessive competition, companies were resorting to price cuts to maintain market share.
- Comparison Conclusion: Xiaomi’s volatility was primarily an “internal” product rhythm adjustment, rather than a fundamental collapse. Compared to other automakers relying solely on price wars, Xiaomi leveraged its “human-vehicle-home ecosystem” moat thanks to its smartphone+car+appliances business model, resulting in a shallower stock decline compared to pure automotive stocks.
IV. Vertical Comparison: HSTECH Index (HSTECH)
- Index Performance: The HSTECH index rose 3.67% in January, with the overall price center rising.
- Xiaomi vs. Index: Xiaomi has lagged slightly behind the broader market over the past two weeks. This is due to investment banks like Morgan Stanley lowering their target prices (to HKD 38) based on concerns that it will take time for mobile phone gross margins to recover.
- Strategic Reflection: As I wrote in November last year, liquidity in Hong Kong stocks remains crucial. During a broad market rally, Xiaomi, as a blue chip stock, is constrained by profit-taking; but during a market correction, its buybacks and cash flow serve as the best defensive position.
V. Summary and Future Operations: Wait for the “April Showers”
- Holding Logic: Given that the 2026 sales target is set at 550,000 units (as just announced by Lei), the current decline is more like a “dull knife cutting flesh” bearish correction, purging short-term speculators.
- Focus Points: The pricing and configuration of the revamped SU7 in April, as well as whether the YU7 can continue to take over.
- Action: Still no action, lying flat. Selling out at this position (35-38 range) is unnecessary; adding to positions hasn’t yet reached my “absolute safe haven” level.