Xiaomi Group's comprehensive rise, short sellers' siege line on the verge of collapse

The Hong Kong stock market recently staged a classic "bull-bear showdown"—Xiaomi Group (01810.HK), under the triple catalysts of a year-long share buyback offensive, southbound capital inflows, and hardware ecosystem expansion, is breaking through the bear siege with an unstoppable momentum, ushering in a new upward cycle. From the fundamental changes in capital structure to the restructuring of industrial logic, from the implementation of Xiaomi's "Human x Car x Home" strategy to the lifting of valuation ceilings, this Chinese tech giant has reached a historic turning point of "bear capitulation."

I. Bears' "Ammunition Depot" Depleted: Short-Selling Data Reveals a Bull-Bear Reversal

Short-selling is the core tool for bears to suppress stock prices, but the latest data shows that Xiaomi's short-selling pressure is rapidly waning:

Plunge in short-selling volume: On December 19, Xiaomi's short-selling volume was 29.3192 million shares, with a short-selling value of only HKD 1.183 billion, a 50% drop from December 12 (HKD 2.798 billion). The average short-selling price of HKD 40.33 was already lower than the December buyback average (HKD 41.08-42.72), indicating that bears are unable to increase their positions in the "low-price range."

Structural shift in the bull-bear battle: In early December, bears launched a fierce attack in the HKD 40-43 range. However, with Xiaomi's year-long buybacks exceeding HKD 10 billion (HKD 1.206 billion in December alone) and 16 consecutive days of net southbound capital inflows (totaling over HKD 1.4 billion), the bears' "selling pressure" has been fully absorbed by bulls. The current short-selling volume now accounts for less than 10% of total turnover, and the "liquidity advantage" of bears has been completely lost.

II. Bulls' "Three Arsenal": Full Support from Capital, Confidence, and Valuation

In stark contrast to the bears' weakness, bulls are building a "moat" with three core strengths:

1. Year-Long Buyback Offensive: A "Real-Money Anchor" at the Bottom

In 2025, Xiaomi adopted a "year-round, intensifying" buyback strategy to signal confidence to the market:

January: Three concentrated buybacks at the start of the year, totaling HKD 225 million, "bottom-fishing" at the year's low range of HKD 32.60-33.65 to counter early-year stock adjustments.

September: Two high-price buybacks, totaling HKD 27.9547 million, "stabilizing" at the year's peak of HKD 53.15-53.25, mitigating the impact of lowered shipment expectations for the Xiaomi 17 series.

October: Six buybacks coordinated with product sales, totaling HKD 1.084 billion, with a price range of HKD 45.90-52.35, forming a "stock-business synergy" with the strong debut sales of the Xiaomi 17 series.

November: Four large-scale buybacks, totaling HKD 1.213 billion, in the year's low range of HKD 37.38-40.34, coupled with founder Lei Jun's personal purchase of 2.6 million shares (over HKD 100 million), achieving a "company + founder" dual-line defense.

December (as of the 19th): 14 consecutive high-frequency buybacks, totaling 59.25 million shares and HKD 1.453 billion, directly capping the downside at HKD 40.12-42.72. The single-day record buyback of 7.2 million shares (December 9/15) marked a yearly high.

1. Southbound Capital: Domestic Investors' "Strategic Accumulation"

Southbound capital (Stock Connect) has become the "marginal price-setter" for Xiaomi's stock:

In 2025, holdings rose to 20%-25%, with 16 consecutive days of net purchases, including over HKD 1.4 billion in the last five days.

Domestic investors focus on "AI + global expansion": Xiaomi's "Human x Car x Home" AI ecosystem (with the MiMo-V2-Flash model) and growth in European shipments (phones/cars) are seen as core plays for "China's hard-tech globalization."

1. Hardware Ecosystem Expansion: From "Single-Point Breakthrough" to "Ecosystem Domination"

Xiaomi's "smartphone + EVs" dual-drive strategy is reshaping the industry with full coverage of the RMB 220,000-600,000 price range:

Upcoming smartphone launch: Likely equipped with in-house AI models, enabling "on-device AI" scenarios, with hardware-software synergy directly boosting the stock.

2026 EV lineup: Four new models (Xiaomi SU7 refresh, SU7L, YU7GT, Xiaomi YU9) covering RMB 220,000-600,000, forming a full-scenario layout of "performance sedans (SU7 series) + luxury GTs (YU7 series) + electric SUVs (YU9)." Just the incremental EV orders could drive 30%+ revenue growth in 2026.

III. Bears' "Fatal Flaw": Misalignment with Industry Trends

Bears' short thesis is fundamentally flawed:

Misjudging buyback resolve: Xiaomi's HKD 10B+ buybacks, including HKD 1.453B in December alone, reflect management's consensus that sub-HKD 40 is "undervalued."

Misjudging industry trends: Xiaomi's AI model (MiMo-V2-Flash) ranks global Top 2; on-device AI will redefine hardware valuations. The "smartphone + EV" dual-drive elevates Xiaomi from a hardware firm to an "AIoT platform."

Misjudging capital flows: 16 days of net southbound inflows, foreign inflows on Fed rate-cut bets—bears' "sell pressure" is fully absorbed.

IV. Conclusion: Bear Capitulation, Xiaomi's "Golden Era" Arrives

Capital-wise, buybacks + southbound flows built a "moat"; fundamentals-wise, AI + hardware expansion lifted "valuation ceilings"; macro-wise, Fed cuts + HK liquidity cleared "external hurdles."

Bears' "malicious shorts" will crumble before Xiaomi's "full rise." For investors, Xiaomi now isn't a "bottom-fishing" chance but a "growth-embracing" start—when a firm's industrial, capital, and valuation logics align, bear resistance is futile.