Xiaomi shares keep sliding while its smartphone ambitions soar
The shares are hovering near their lowest level in more than a year in Hong Kong, having dropped about 40% year-to-date to be among the worst performers on the Hang Seng Tech Index in 2021
Corp. stock remains one of the biggest losers among China’s technology giants, even after the company dodged Beijing’s regulatory crackdown and set its sights on becoming the world’s largest smartphone maker.
Despite overtaking Apple Inc. in the second quarter to become the No. 2 smartphone manufacturer behind Samsung Electronics Co., some analysts recently lowered their price targets and recommendations on the stock, citing slowing demand, strong competition and supply chain difficulties.
The shares are hovering near their lowest level in more than a year in Hong Kong, having dropped about 40% year-to-date to be among the worst performers on the Hang Seng Tech Index in 2021.
That puts its performance behind internet-focused names like Tencent Holdings Ltd. and Alibaba Group Holding Ltd., which suffered heavily from stricter rules. It also contrasts with the view of strategists at Goldman Sachs Group Inc. that Xiaomi
is among 50 stocks likely to benefit from President Xi Jinping’s “common prosperity” campaign as China seeks to upgrade manufacturing.
Macquarie Group Ltd. downgraded Xiaomi
to neutral on Wednesday while slashing its price target by 48%, following price-target cuts earlier this month by Daiwa Securities Group Inc. and Credit Suisse Group AG of 14% and 19%, respectively. That leaves the stock with 42 buys, six holds and two sells, according to Bloomberg data.
Xiaomi shares fell as much 1.5% in Hong Kong on Wednesday before trimming the fall to 1% at 2:45 p.m. local time.
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First Published: Wed, November 10 2021. 14:52 IST