On April 9th, technology stocks rallied collectively, with Xiaomi surging 7.71% to HK$41.90, amassing a trading volume of HK$27.428 billion.

As a leading technology stock in the Hang Seng Index, Xiaomi joins Alibaba, Tencent, Meituan, SMIC, and other Hong Kong stocks in forming a formidable 'Big Seven.' This rebound and the optimism from institutions signal a reshaping of the technological landscape and asset revaluation between China and the US.

Amidst the crucial Sino-US tariff game, both sides' decision-makers remain focused on their domestic technology industries. China emphasizes industrial upgrading, while the US strives for 'Greatness Again.' Essentially, both aim to dominate the technological race.

However, various indicators suggest that the marginal effect of US tariffs is waning. Chinese technology companies, exemplified by Xiaomi, are poised to withstand the impact and seize the advantage.

I. Xiaomi's 'Oversold' Status: Clarifying Rumors, Fundamentals Improving

With the implementation of US 'reciprocal tariffs,' U.S. stocks tumbled, while Chinese assets soared.

Most institutions acknowledge that Chinese technology stocks are 'oversold.' For instance, Xiaomi faced a series of shocks, including a car accident, high-level share placements diluting equity, and tariff pressure, leading to a steep decline. As the price-to-earnings ratio falls, high valuation risks are partially released, and recent trading volume has surged, indicating that panic selling may be nearing its end.

Firstly, the public opinion storm is gradually subsiding.

In response to online rumors that 'Xiaomi SU7 was rejected by insurance companies,' a Xiaomi spokesperson debunked the rumors on Weibo, stating that the information was seriously inaccurate. Moreover, after public backlash, investors have become more rational, allowing Xiaomi's SU7 intelligent driving accident to return to facts and common sense.

Secondly, fundamentals are stable and improving, significantly enhancing valuation attractiveness.

After the sharp decline, Xiaomi has three pillars of support: mobile phone business recovery, AIoT ecological advantages, and potential in the automotive business, providing ample justification for recovery. Fitch Ratings upgraded Xiaomi's outlook on its Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) from 'Stable' to 'Positive' and affirmed its IDRs at 'BBB.' Daiwa Capital Markets published a research report stating that Xiaomi's share price has been weak recently following the car accident and share placement, but due to its solid fundamentals, it believes that the share price decline presents an attractive buying opportunity.

Recently, the national team has intensified efforts to safeguard the market. As the Sino-US trade war intensifies, maintaining financial market stability has become a strategic priority. Xiaomi itself is also repurchasing shares with real money to support the share price, which is expected to form a V-shaped recovery.

Historical experience shows that great enterprises often reinvigorate themselves during crises, and Xiaomi, which is embracing unprecedented opportunities, is no exception.

II. 'The Rise of the East and the Fall of the West': Competitors Falter, Xiaomi Stocks Up Ammunition to Seize the Market

If one had to pick a member of the U.S. stock 'Big Seven' who most criticizes Trump's tariff policy, it would undoubtedly be Apple.

From China to Vietnam, almost all of Apple's production sites have been hit by high tariffs. Since none of the 220 million iPhones are made in the US, almost all iPhones are imported, and the price of the iPhone 16 series is projected to increase by 43% in the US market.

The tariff policy aims to force Apple to produce iPhones in the US. However, the reality is that Dan Ives, an analyst at Wedbush Securities, once stated that the cost of producing an iPhone in the US would be as high as $3,500.

Regardless of feasibility, as Apple's manufacturing business is affected by tariff costs, a historic opportunity has arisen for Chinese manufacturers like Xiaomi.

In the short term, tariffs have a negative impact on Xiaomi but enhance its self-research competitiveness in the long term.

The market is most concerned about tariffs affecting Xiaomi's procurement costs, such as rising costs for Qualcomm chips. However, Xiaomi is well-prepared. In March, tech bloggers revealed that the Xiaomi 15S Pro would be equipped with a self-developed Xuanjie SoC chip, with performance expected to surpass Huawei's Kirin 9020, adding a new dimension to domestic SoCs. Regardless of Xiaomi's self-developed chips' performance, it is undeniable that domestic chips are collectively making breakthroughs, and Xiaomi's 'domestic substitution' is a major trend in the future.

On the other hand, as the pressure on Apple's supply chain surges, it must pass on costs to global consumers, presenting Xiaomi with an opportune moment to overtake in the global market.

Xiaomi has been exploring new incremental markets and accelerating the 'model overseas expansion' of new retail: testing e-commerce in South Korea, opening direct stores in Japan, and promoting major household appliance retail in Southeast Asia. Additionally, Xiaomi has taken measures such as joint ventures and local production in India, Indonesia, Mexico, and other locations, which not only reduces costs but also significantly improves supply chain response speed and product market competitiveness.

By seizing market share through localized marketing and low-price strategies, Xiaomi aims to establish 10,000 Xiaomi stores overseas and form a global sales and service network from 2025 to 2029.

To this end, Xiaomi has been stockpiling ammunition for the 'great battle' recently. On March 25th, Xiaomi Group placed 800 million shares to raise HK$42.5 billion in funds; on April 9th, the company plans to issue RMB 20 billion in public bonds to fundraise. All these funds are aimed at breakthroughs in core businesses: business expansion, technology research and development, and market expansion, with funds primarily flowing to three areas: smart electric vehicles, high-end mobile phones, and the AIoT ecosystem.

In the future, Xiaomi's development is likely to see accelerated expansion and a decisive battle in non-US markets. Xiaomi's globalization strategy reduces its dependence on the US market, while its deep cultivation of emerging markets such as Europe, Southeast Asia, and Latin America has become its growth engine.

This aligns with the grand narrative of 'the rise of the East and the fall of the West' in the technology sector.

III. Conclusion

As Wall Street billionaires transition from intense lobbying and public criticism to forced acceptance of Trump's tariff policy, most industrial tycoons are also powerless. What will happen to American tech giants? One can only look to the 1930s for reference (the scale of 'Trump's tariffs' has already surpassed 1930).

Apple's global supply chain is in disarray, and the costs of repatriating funds and time to the domestic market are difficult to estimate. Samsung and LG have also been severely impacted by US global tariffs. Against this backdrop, as the world's third-largest smartphone vendor, Xiaomi emerges as the biggest beneficiary.

The company is increasing cash reserves while intensifying self-developed core technology innovation, clearly preparing for expansion. Daiwa's research report points out that Apple's smartphone market share in China has continued to decline over the past few years, and it is believed that Xiaomi's smartphones will gain more cross-selling opportunities from high-end users, thereby gaining more market share in the future; the IoT business still has considerable room for growth in the coming years, and the company will continue to focus on products with higher marginal profits and formulate overseas expansion plans; the group will continue to grow in the electric vehicle market and bring more synergies.

Caught in the Sino-US game, Xiaomi has 'unexpectedly benefited.' In the future, the company is expected to emerge as a winner in the era of globalization 2.0 amidst the trade war, leveraging its advantages of 'supply chain resilience + market diversification + ecological scenarios.'

From a capital market perspective, many hands make light work, and Xiaomi has also become one of the leading stocks driving both markets.

Source: Hong Kong Stock Research Society