Xiaomi Stock Soars Over 290% in One Year Amid Strong Business Growth

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Rising market conditions and successful ventures boost Xiaomi's share price

Xiaomi's stock has experienced a remarkable surge recently, showcasing a significant increase of over 290% compared to a year ago. This growth can be attributed to favorable market conditions, particularly in the electric vehicle sector, and the company's thriving business operations.

On February 21, Xiaomi's stock price rose by 5.19%, reaching HKD 51.70 on the Hong Kong Stock Exchange. This marks a substantial increase from HKD 13.22 a year earlier, reflecting the company's strong market performance. Xiaomi, known for its smartphones and electric vehicles, is benefiting from several key factors driving this growth.

One of the major contributors to Xiaomi's success is the Chinese government's recent subsidy program for smartphones priced under 6,000 yuan, which offers consumers a 15% rebate on purchases up to 500 yuan. Xiaomi's flagship models, including the Xiaomi 15 and 15 Pro series, fall within this price range, positioning the company to capitalize on increased market demand and boost sales revenue.

In addition to its smartphone division, Xiaomi's AIoT (Artificial Intelligence of Things) and home appliance segments are experiencing significant growth. The company ranks fourth in air conditioning shipments in China, with combined sales of refrigerators, washing machines, and air conditioners reaching 8.7 million units in the third quarter of last year, representing a remarkable 42% increase compared to the same period in the previous year.

Xiaomi's electric vehicle venture is also on an upward trajectory. The company sold 130,000 electric vehicles last year, with expectations to reach 300,000 this year and 650,000 by next year. As a result, electric vehicles are projected to account for 9%, 18%, and 24% of the company's overall revenue during these years, showcasing the increasing importance of this sector. Notably, Xiaomi's SU7 electric vehicle model has surpassed Tesla's Model 3 in sales, with a total of 162,384 units sold from April last year to last month, compared to Tesla's 152,748 units during the same timeframe, according to the China Passenger Car Association (CPCA).

The positive sentiment surrounding Xiaomi's stock has also been influenced by recent comments from Chinese President Xi Jinping. During a meeting with key private entrepreneurs, including Alibaba founder Jack Ma, President Xi expressed support for private enterprises and the technological sector, further bolstering investor confidence in Xiaomi's future.

Financial analysts are optimistic about Xiaomi's prospects. Go I-Young, a researcher at iM Securities, noted that as the market value of Chinese tech companies rises, Xiaomi stands out for its impressive performance. He highlighted that the government's purchase subsidies create a favorable demand environment, allowing Xiaomi to expand its market share across smartphones, home appliances, and electric vehicles effectively.

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