Xiaomi's stock price halved, it was maliciously shorted by hedge funds!

I. Core Reasons for Xiaomi's Stock Price Decline

1. Hong Kong Stock Market Characteristics: The Hong Kong stock market is an international capital market dominated by hedge funds. They consistently execute the strategy of "going long on upstream memory chips/semiconductors and shorting downstream consumer electronics and manufacturing." Xiaomi, as a representative of downstream consumer electronics, has become a typical short-selling target.
2. Institutional Shorting Logic: Institutions believe Xiaomi lacks short-term "catalysts." Reasons for shorting include: rising memory chip prices suppressing smartphone gross margins, slowing growth in the AloT business, and delays in Xiaomi's second-phase car factory affecting deliveries, among others.

II. Conditions for Judging "Oversold"

For the hedging strategy to fail, one of the following two conditions must be met:

• The upstream long sector (e.g., memory chips) rises to a bubble level (overbought);
• The downstream short sector (e.g., consumer electronics like Xiaomi) falls into extreme panic (oversold).

III. Basis for Xiaomi Not Being Considered Oversold Currently

1. Foreign Investment Bank Pricing: Foreign investment banks have continuously lowered their valuations for Xiaomi. Among them, the pricing from the Wall Street independent investment bank Jefferies is highly referential. The current stock price has not reached its defined oversold range.
2. Internal Shareholder Actions:

• Co-founder Lin Bin's $2 billion share reduction plan;

3. Xiaomi's Own Fundamentals:

• The upstream memory chip price increase cycle may last until 2027;
• The smartphone business shows "rising prices but decreasing volume," with insufficient competitiveness in the high-end market;
• The automotive business may return to losses, and the intense competition within the new energy vehicle industry has driven the valuation of this segment close to zero.

IV. Key Signals for a Stock Price Reversal

Await the occurrence of the following events:

• The arrival of a turning point in memory chip prices;
• Xiaomi's automotive business achieving sustained profitability, with order deliveries experiencing continuous explosive growth;
• Substantial commercial progress in internal and external businesses (e.g., AloT, internationalization).

$XIAOMI-W(01810.HK)