Hedge Fund Manager's Volatile Comments on Xiaomi Spark Industry Debate Amid Performance Woes

A prominent hedge fund manager's conflicting statements about Xiaomi Corp. have stirred controversy in China's private fund industry. Wang Wen, chairman of billion-yuan asset management firm Ridou Investment, initially criticized Xiaomi Corp. on social media for its "overly diversified business布局" and questioned its long-term strategy, only to quickly backtrack and praise the company.

The controversy emerged as Ridou Investment's products showed significant performance declines this year. According to Private Equity Ranking Network data, Ridou Fengteng Value No.1 has fallen 16.93% year-to-date through March 31, while Ridou Qianniu Value No.1 dropped 15% during the same period. This contrasts sharply with the firm's over 30% returns in 2025.

Wang Wen originally posted: "Xiaomi Corp. has entered numerous industries but few have reached top-three positions. With automotive growth slowing, they're now emphasizing AI and robotics - fields already crowded with the brightest minds and capital. I doubt they have a coherent long-term plan, seemingly chasing whatever becomes trendy."

Facing backlash, Wang issued a clarification on April 4: "I often speak carelessly - please don't take it seriously. Xiaomi Corp. is an excellent company! However, concentration on core businesses remains important to me."

The comments came shortly after Xiaomi Corp. CEO Lei Jun announced on March 30 the company's plan to invest 16 billion yuan in AI development this year, alongside launching a major AI talent recruitment initiative.

Coinciding with these events, Xiaomi Corp.'s stock price has declined 21.42% year-to-date, closing at HK$30.88 on April 3 - nearly halving from its June 2025 peak of HK$61.45.

Meanwhile, a fabricated list ranking the "Top 20 Worst-Performing Billion-Yuan Hedge Funds" circulated widely in investment groups, falsely suggesting widespread underperformance among major private funds. Verification revealed the list contained numerous inaccuracies.

Industry data confirms challenging conditions for hedge funds during Q1 2025. Shanghai Composite Index fell 1.94% while ChiNext declined 0.57%, with March showing particular weakness as many stocks dropped over 20%.

Dongfang Harbor, managed by renowned investor Dan Bin, reported several products with double-digit declines, attributed to heavy exposure to US AI technology stocks that corrected sharply.

Commenting on market volatility, Wang Wen noted on April 2: "Investment drawdowns are inevitable - even Warren Buffett experienced three 50% declines. The key question is whether your holdings justify the risk."

Several major hedge funds shared their Q2 outlooks. Xuan Yuan Investment suggested market adjustments may be 70-80% complete, viewing potential further declines as buying opportunities. They expect Chinese stocks to decouple from global risks sooner than international markets.

StarRock Investment maintained that near-term A-share movements will correlate with global risk assets, with Middle East tensions being a key variable. They see current valuations as reasonable after recent corrections and anticipate corporate earnings recovery to drive future gains, particularly in China's manufacturing and AI sectors.