SHANGHAI (Reuters) – Chinese smartphone maker Xiaomi Corp said on Tuesday it will buy back up to HK$12 billion ($1.53 billion) worth of stock in its biggest equity repurchase, sending its shares up nearly 7%.
The Beijing-based company, which listed its shares in July last year, has lost nearly a third of its market value so far this year. Its growth has slowed sharply as the global smartphone market has shrunk and local competition has increased.
Xiaomi’s market share in China declined by a fifth in the April-June quarter even as that of smartphone giant Huawei Technologies surged by 31%, according to research firm Canalys.
Xiaomi’s stock has also been hit by losses at the Hong Kong stock market, which has plunged since massive anti-government protests started in the city in June. Companies on the city’s exchange have collectively bled $152 billion in value since June.
The stock repurchase news comes less than a week after Xiaomi scrapped an already delayed plan to offer equity in mainland China to attract investors. The company said then it had adequate capital and would focus on business development.
“The board believes that a share repurchase in the present conditions will demonstrate the company’s confidence in its own business outlook and prospects,” Xiaomi said in a stock exchange filing.
Xiaomi’s current financial resources will enable it to implement the repurchase while maintaining a solid financial position, the company said.
Xiaomi shares jumped as much as 6.8% to HK$8.92 on Tuesday.
($1 = 7.8430 Hong Kong dollars)
Reporting by Josh Horwitz; Editing by Muralikumar AnantharamanOur Standards:The Thomson Reuters Trust Principles.