Xiaomi Earnings Preview: Smartphone Business Remains Under Pressure — How Long Will the Stock Slump
Xiaomi is set to release its second-quarter earnings report after the Hong Kong market closes on August 18. According to analyst estimates, Xiaomi’s Q2 2026 revenue is expected to reach RMB 108.325 billion, down 1.9% year over year, while adjusted EPS is expected to come in at RMB 0.235. $XIAOMI-W(01810)$ $XIAOMI-WR(81810)$ $Xiaomi Corp.(XIACY)$
Since the end of July, Xiaomi’s share price has generally been trending downward. With the Q2 earnings report approaching, the market will be closely watching the company’s profitability, whether its smartphone business remains under pressure, and whether smart EV shipments can meet expectations. The upcoming results could be a key test of whether Xiaomi can reverse its recent downward trend.
Xiaomi’s revenue mainly comes from six segments: Smartphones, IoT & Lifestyle Products, Internet Services, Internet Value-Added Services, Smart EV & Other New Initiatives, and Others. Among these, Smartphones, IoT & Lifestyle Products, and Smart EV & Other New Initiatives are currently the company’s major revenue contributors. According to analyst estimates, while revenue from IoT & Lifestyle Products and Smart EV & Other New Initiatives is expected to grow this quarter, the smartphone business has already experienced consecutive declines and is expected to remain under pressure in Q2.
JPMorgan maintains a Neutral rating on Xiaomi and has lowered its price target to HK$31, while forecasting that Xiaomi’s Q2 2026 earnings could decline by approximately 44% year over year. The bank believes that higher memory inventory costs continue to weigh on smartphone gross margins, while full-year smartphone shipments could decline by 24%. Meanwhile, growth in the EV business remains relatively weak. SkyNomad is not expected to begin deliveries until September, and Xiaomi has completed only around 30% of its 550,000-unit annual shipments target in the first half of the year, raising concerns about the sales performance of its existing EV models.
Although AI and robotics have strong long-term potential, JPMorgan believes they are unlikely to become a major factor for Xiaomi’s share price over the next 12 months. Xiaomi’s expansion into overseas EV markets, a potential turning point in smartphone profit margins, and other factors need continuous monitoring.
From a valuation perspective, Xiaomi currently trades at a price-to-sales (P/S) ratio of 1.28x, which is in the lower-middle range of the past five years.
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