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    Xiaomi (SEHK:1810) Stock Looks To Trade At A Discount Following A 119% Run

    Simply Wall St·09/18/2026 12:27:10
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    Xiaomi has seen its share price move sharply over recent years, and the question now is whether the current Hong Kong dollar price is justified by the cash flows the business can generate over time. With the stock recently closing at HK$26.40, investors are asking how much of the company’s cash flow story is already reflected in that number.

    • Over the past 3 years, Xiaomi has delivered a 118.9% share price gain, which puts its current valuation under close scrutiny given the cash it is expected to produce.
    • The planned launch of Xiaomi Auto’s battery electric vehicles in Europe from 2027, after signing sales agreements with dealer groups in Germany, can influence expectations for future cash generation and the timing of required investment.
    • Prefer to judge Xiaomi on earnings? See why Xiaomi's 17.6x P/E tells a different valuation story.

    The issue now is whether Xiaomi’s current share price lines up with its intrinsic value when you focus purely on the cash flows captured by a Discounted Cash Flow (DCF) model.

    If you are weighing Xiaomi’s cash flow story against similar opportunities, it can help to line it up alongside 169 high quality undervalued stocks.

    Is Xiaomi Still Cheap on Cash Flow?

    The Discounted Cash Flow (DCF) model here uses a 2 Stage Free Cash Flow to Equity approach. Xiaomi’s latest twelve month free cash flow was a loss of about CN¥2.2b, yet the projections used in the model assume the group moves into sizeable positive free cash flow in coming years, then settles into more tempered CN¥40b to CN¥50b annual levels. That shift from cash outflow to large inflows is a key reason the DCF outcome is meaningfully above the HK$26.40 share price.

    Because Xiaomi Auto plans to roll out battery electric vehicles in Europe from 2027, with dealer agreements already in place in Germany, the market may be focusing on execution risk and upfront investment rather than the cash generation profile used in the DCF. The projections suggest the equity market is applying a more cautious lens than the cash flow path implied by the model, even after accounting for the recent share price move. Find out what Xiaomi could be worth using our Discounted Cash Flow (DCF) estimate.

    The Xiaomi Narrative: What Would Justify Today's Price?

    Narratives for Xiaomi pick up where this DCF conflict leaves off by spelling out which combinations of growth, margins and earnings would need to play out for the stock to be worth materially more or less than today’s price. These narratives are available on Simply Wall St’s Community page. Rather than a single valuation output, each case lays out the assumptions behind its fair value so you can compare those expectations with Xiaomi’s actual results over time.

    Community views on Xiaomi are split between a bullish group that sees more runway in the ecosystem and EV build out and a cautious camp focused on saturation and costs.

    Bull case: 28% undervalued

    "Accelerated R&D investments in core areas like AI, chips, smart EVs, and connected hardware enable differentiated offerings and ecosystem lock-in…"

    Discover why this Narrative puts Xiaomi at 28% undervalued.

    Bear case: 16% overvalued

    "Smartphone market saturation and lengthening replacement cycles worldwide are expected to severely constrain unit sales growth, intensifying price competition…"

    Explore why this Narrative puts Xiaomi at 16% overvalued.

    Before acting on Xiaomi’s valuation, check who is steering the ship

    Before you put too much weight on the numbers, you also need to understand who drives Xiaomi’s decisions, how their incentives are structured, and whether those rewards align with your own goals. See who runs Xiaomi and how they are paid.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.