Xiaomi shares up 4% after founder buys securities. Is it worth taking an example?

Shares of Chinese smartphone and smart electronics maker Xiaomi jumped more than 4% in trading on Nov. 25, showing the strongest one-day growth in two months, Bloomberg reports. The reason for investors' enthusiasm was the news that the company's founder Lei Jun bought the company's securities for about 100 million Hong Kong dollars ($12.9 million). As a result of the purchase, Lei's stake rose to 23.26%.

This deal may support the mood in the market after the securities fell more than 30% from the high reached in July, writes Bloomberg. Relative to the beginning of 2025, Xiaomi shares, traded in Hong Kong, are still in the plus by 17%.

Such deals by the founder, rather than the company itself, are rare and show a desire to stabilize the stock's momentum and limit further declines, Bloomberg noted, citing analysts.

"It's hard to say whether this will be a definitive bottom, but the signal that downside space is now limited is pretty confident," commented Jiang Liangqing, fund manager of Zhuhai Greenbamboo Private Fund Management.

Xiaomi has conducted several share buybacks since 2022, which contributed to the growth of quotations. Thus, the announcement of the new program in June pushed the shares to rally in the following weeks, Bloomberg writes.

Analysts at Goldman Sachs lowered their target price on Xiaomi shares by more than 10%, citing possible profitability problems for the company due to rising prices of components - memory chips, the agency reported.

However, in general, the market believes in Xiaomi's continued growth and stability, and the risks, according to experts, are limited. According to the Wall Street Journal, 36 analysts recommend "buying" the stock (Buy and Overweight ratings), three - "hold" (Hold), two - "sell" (Sell).

This article was AI-translated and verified by a human editor