Chinese smartphone maker Xiaomi has spent $64.5 million on buying back its shares in the past two days, company filings show.
Why it matters: The buybacks come during a slump in Asian markets, with Hong Kong’s Hang Seng Index falling 1.9% on Wednesday and the Japanese market benchmark Nikkei 225 index down by 1.7%.
- Shares of Xiaomi have climbed 4.6% since Tuesday when the company announced the first buyback.
- The share repurchases are also part of measures taken by the company to boost investor confidence.
- The global smartphone market is expected to be severely hit by the coronavirus outbreak.
- Official data has shown a 36.4% dent in China’s handset sales in the first quarter.
Details: Xiaomi spent HKD 250 million (around $32.3 million) on a share buyback on Wednesday following a similar repurchase of HKD 249.6 million on Tuesday, according to company filings to the Hong Kong bourse.
- The buybacks are part of Xiaomi’s previous plan to repurchase up to HKD 12 billion worth of stock that they announced in September.
- The company said in a statement in September that the plan would “broadcast the company’s confidence in its own business outlook and prospects, and will benefit the company as well as its shareholders.”
Context: Shares of Xiaomi have dropped by nearly 20% since March, canceling out the company’s gain since its HKD 12 billion share repurchase announcement.
- The company said last month its revenue for the fourth quarter rose 27.1% year on year to RMB 56.5 billion (around $8 billion) while it booked net income of RMB 2.3 billion in the period, a year-on-year increase of 26.5%.
- Xiaomi’s cash reserve was RMB 66 billion (around $9.3 billion) as of the end of 2019, according to the company’s annual results released last month.