Xiaomi CEO Lei Jun speaks at a press conference in August 2023 in Beijing. The CEO enjoys star status on Chinese social media.
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Lei Jun, founder of Chinese tech giant Xiaomi, is now the fifth richest billionaire in China after company shares rallied 250% over the past 12 months. Xiaomi’s investors are increasingly bullish on Lei’s electric vehicle business.
Lei, 55, now has a fortune of $35.3 billion, according to Forbes estimates. The entrepreneur, who is chairman and CEO of Hong Kong-listed Xiaomi, had a net worth of $10.9 billion when Forbes measured his wealth for the World’s Billionaires List that was launched in April 2024. Since the beginning of this year, Xiaomi shares are up 27.2%, outpacing a 9.1% gain in the city’s benchmark Hang Seng Index.
Lei, 55, now has a fortune of $35 billion, according to Forbes estimates. The entrepreneur, who is chairman and CEO of Hong Kong-listed Xiaomi, is richer than ever after the company’s shares rallied 130% in 2024. This year, they are up another 27.2%, outpacing the 9.1% gain in the city’s benchmark Hang Seng Index.
The rally is partly driven by Xiaomi’s smartphone business, which is selling more high-end, profitable devices. Now the world’s third largest smartphone maker by market share, the company is also benefiting from investors’ growing interest in China’s technology companies after DeepSeek’s January release of a cost-effective AI model. That has led investors to bet on more breakthroughs coming out of China, Eric Wen, head of research at Hong Kong-based research firm Blue Lotus Capital Advisors, says by messages sent via WeChat.
Xiaomi is investing in its own AI model to help make the company’s Siri-like digital assistant Xiao Ai smarter. But the main factor behind its stock market rally is a rosy outlook for the company’s EV business. Despite cut-throat competition and a relentless price war, Xiaomi is expected to meet Lei’s target of delivering 300,000 vehicles in 2025, which the mogul announced in a January post on Chinese social media platform Weibo. Last year, the company delivered more than 135,000 cars. In March, Xiaomi introduced its SU7 electric sedan at a starting price of 215,900 yuan ($30,000), which was slightly cheaper than Tesla’s Model 3’s starting price of 235,500 yuan. Blue Lotus’s Wen expects Xiaomi to exceed Lei’s goal and deliver 387,000 cars in 2025.
The YU7, an electric SUV that is expected to be launched in the summer, is a direct competitor to Tesla’s Model Y but might be priced a tad cheaper than the latter’s starting price of 263,500 yuan, Yale Zhang, a Shanghai-based managing director at research firm Automotive Foresight, says by phone.
Aside from competing with Tesla, Xiaomi is grabbing market share from other foreign brands such as Audi, BMW and Mercedes-Benz in the world’s second-largest economy, according to Zhang. The foreign companies are struggling to sell to China’s younger generation, who like not just Xiaomi’s stylishly designed vehicles but Lei himself. The mogul enjoys star status on Chinese social media, where he frequently interacts with users to provide product updates and ask for product feedback.
“He is a super salesman,” Zhang says. “This is something other emerging automakers don’t have. Plus, the car itself is quite good. It is better than the products from many new and traditional automakers.”
But Xiaomi’s shares might now be considered expensive. The stock trades at a price-to-earnings ratio of 53 times in Hong Kong. Chinese web giant Tencent has a PE multiple of 23. Automaker BYD, which overtook Tesla to become the world’s largest EV maker by deliveries in the final quarter of 2024, trades at 26 times earnings in Hong Kong.
Investors might like Xiaomi for its potential, Ke Yan, Singapore-based head of research at DZT Research, says via WeChat. Some investors view Xiaomi as a technology-related stock offering rapid growth, which justifies its high valuation, says Ke.
Aside from keeping vehicle deliveries up, Lei said in a February social media post that he is studying how to boost production. Last year, some consumers had to wait up to eight months to get cars when demand far exceeded supply.
Lei’s messages likely cheered investors by suggesting an expanded and strengthened supply chain, analysts say. Blue Lotus’s Wen expects Xiaomi’s EV unit to start generating a profit in 2026.
Currently loss making, EV sales accounted for 10.5% of the company’s total revenue in the third quarter of 2024, the latest financial results available. Xiaomi saw sales grew 30.5% year-over-year to 92.5 billion yuan during that period, while its net profit was up 4.4% to 6.3 billion yuan.
“Xiaomi’s share price is very high but I don’t think it has peaked,” says Wen. “The company’s competitive position in the smartphone market has improved, but EVs are really the main reason.”
