In the sweltering heat of Wuhan this June, a viral image of Xiaomi founder Lei Jun eating breakfast on a street stool dominated the Chinese internet. While the scene was designed to burnish his image as a relatable 'man of the people,' it was interrupted by a local student who poignantly asked why so many cameras were needed for a simple meal. This moment of unintended clarity mirrors the current crisis facing Xiaomi, where the founder's immense personal fame has failed to shield the company from a brutal market reality.
By the close of June 25, 2026, Xiaomi’s shares had tumbled below the 23 HKD mark, a staggering 60% decline from the historic highs seen just a year prior. This collapse represents the evaporation of over one trillion Hong Kong dollars in market value, wiping out the gains made during the peak of the company's electric vehicle euphoria. Despite Lei Jun’s status as a top-tier influencer, his personal 'traffic' has proven unable to reverse a deepening sell-off fueled by deteriorating fundamentals.
The catalyst for the exodus was a disastrous first-quarter earnings report that shattered any lingering illusions of high-speed growth. Revenue fell by nearly 11% year-on-year, ending a five-quarter streak of growth, while adjusted net profit plummeted by over 43%. More concerningly, the company’s core smartphone business—the traditional engine of its ecosystem—saw shipments drop by 19%, with profit margins squeezed to a two-year low by rising chip costs and a relentless domestic price war.
Perhaps most damaging to the company's long-term valuation is the cooling of its ambitious automotive venture. After the initial blockbuster success of the SU7 and YU7 models in 2025, delivery numbers for the flagship YU7 have hit a wall, falling from nearly 38,000 units a month in January to under 9,000 in May. With only 28% of its annual sales target met nearly halfway through the year, the company has reportedly begun offering internal discounts to clear stagnant inventory.
This downward spiral suggests that the 'scarcity value' of Xiaomi’s entry into the EV market is rapidly dissolving. While the market once rewarded Xiaomi with a premium valuation based on the successful 'Human-Car-Home' ecosystem story, investors are now recalibrating their expectations. Without the tailwind of explosive EV growth, the company is being viewed through the more critical lens of a mature hardware manufacturer struggling with cyclical headwinds.
Lei Jun remains a formidable figure in Chinese business, capable of commanding attention through marathon livestreams and viral speeches. However, the widening gap between his personal popularity and Xiaomi’s stock performance serves as a stark reminder that marketing cannot substitute for a technological moat. As the company faces its most significant challenge since the near-collapse of its smartphone business in 2016, it must again find a way to pivot from storytelling to sustainable structural growth.