Xiaomi announces HK$2.5 billion buyback as competition and cost pressures weigh on stock

Core Viewpoint - Xiaomi announced a stock buyback program worth up to HK$2.5 billion ($321 million) to reassure investors amid competition and rising costs [1] Group 1: Stock Buyback Program - The buyback program is intended to address investor concerns due to intensifying competition, rising component costs, and recent product safety issues [1] - The latest buyback will commence on January 23 and will be conducted on the open market, subject to market conditions and regulatory approvals [3] Group 2: Share Performance - Despite the announcement of the buyback, Xiaomi's shares have declined over 8% year-to-date, indicating ongoing pressure on the company's valuation [2] - The company has a history of share repurchases, including a recent buyback of 4 million shares for HK$152 million on January 13 [2] Group 3: Criticism of Buybacks - Critics argue that stock buybacks can inflate share prices without enhancing the underlying business, suggesting that funds could be better allocated to employee compensation, factory expansion, job creation, and innovation [2]