Xiaomi Short Positions Hit Record High Before Earnings Report, Cost Pressures and Electric Vehicle Competition are Main Concerns

According to Bloomberg, before Xiaomi Group's first quarter earnings report, short bets on the company have risen to a record high. Data from S3 Partners shows that a week before the earnings report, short positions in Xiaomi accounted for about 9% of free-floating shares, less than 2% a year ago.

Xiaomi's stock price has fallen by half from its historical high in July 2025, making it one of the weaker components in the Hang Seng Technology Index during the same period. Bloomberg-compiled data shows that for the three months ending in March, Xiaomi's revenue is expected to fall 11% year-on-year. If this expectation is met, it will be the company's first quarterly revenue decline since mid-2023.

The cost side is the main pressure that investors are concerned about. Analysts estimate that Xiaomi's gross margin for the first quarter may improve to 21.4% from the previous quarter, partly due to increased product prices. Kevin Net, portfolio manager at Financiere de L Echiquier, said:

"For Xiaomi, the main problem is the rise in memory prices and its impact on profitability."

He also mentioned that the weak consumption environment in China, as well as the continued fierce competition in the electric vehicle field, is also suppressing the performance of Xiaomi's stock price.

Xiaomi will release its first quarter results later in the evening on May 26.