Lei Jun increases position by 100 million, is Xiaomi's 'golden pit' here?

$XIAOMI-W(01810.HK) $Xiaomi Corporation(XIACY.US) On the 24th, Lei Jun, through his wholly-owned company Team Guide Limited, spent over HKD 100 million to increase his holdings by 2.6 million Class B ordinary shares in the open market at an average price of HKD 38.58, raising his personal stake to 23.26%.

This move came as Xiaomi's stock price had retreated more than 30% from its yearly high, with its market cap evaporating nearly HKD 300 billion.

On the 18th, Xiaomi released its Q3 2025 financial report: total revenue reached RMB 113.1 billion, up 22.3% YoY; adjusted net profit was RMB 11.3 billion, surging 80.9% to a record high. Notably, EV deliveries exceeded 100,000 units, with revenue share breaking 10% for the first time; revenues from innovative sectors like AIoT and smart home also hit records, while smartphone business remained top-three globally. These figures should have been a "moat," yet failed to stop the stock's decline.

Why? A cluster of EV safety incidents triggered a PR crisis and loss of trust, directly breaching market tolerance for "Xiaomi speed"; soaring prices of core components like memory chips, coupled with heavy R&D spending, quickly passed cost pressures downstream, sparking fears that smartphone margins would erode if prices were raised; the broader tech bear market in Hong Kong, escalating U.S.-China tensions, and profit-taking after earlier 100x gains fueled "sell the news" sentiment.

As controlling shareholder, Lei's "skin in the game" with a slight stake increase signals confidence in Xiaomi's long-term value. This isn't new: in 2024, he repeatedly bought the dip, often followed by rebounds.

But is this truly a "bottom signal"? Not necessarily. Supply chain disruptions, intensifying competition, or policy shifts—like China halving NEV purchase tax exemptions from January—mean recovery pace post-correction remains uncertain.

Yet data-driven opportunities exist. Xiaomi is pivoting from "smartphone maker" to "tech ecosystem," with EV+AI dual engines mirroring Tesla's early path—volatile short-term, promising long-term compounding. For value investors, this dip may be a "golden pit": allocate 10%-15% with stops below HKD 35; growth investors can await Q4 delivery data.

Lei's buying is a booster shot, but watch Fed doves and Xiaomi's Q4 guidance. Dip a toe in, but bet on conviction, not hype.