On January 4, the first day of stock market trading in 2021, Xiaomi Group’s share price reached HK$35.9 per share and its market value exceeded HK$900 billion, according to “Brokerage China”. Today, the market capitalization is less than HK$600 billion, a drop of more than HK$300 billion during the year.
Since January, Xiaomi Group’s share price has been in a continuous decline, down 31.48% since the beginning of the year. Recently, Xiaomi Group announced to buy back shares in the open market from Time to time at a maximum total of HK$10 billion.
Since the beginning of this year’s bull market, technology stocks have seen a sharp pullback, and Xiaomi is no exception, and the negative impact of the U.S. “blackout” may be greater.
On Jan. 14, the Trump administration blacklisted nine Chinese companies, including Xiaomi Corporation, from the Communist Party’s blacklist of military enterprises. These companies will be subject to a new U.S. investment ban that will force U.S. investors to divest their shares in blacklisted entities by Nov. 11, 2021.
In addition, global index publisher FTSE Russell announced on March 5 that it will remove Chinese companies such as Xiaomi from its global and China indices to comply with the U.S. executive order.
Publicly available information shows that Xiaomi founder Lei Jun, a retired military man, is also an investor in Galaxy Aerospace Corp. The chairman of this company’s technical committee, Deng Zongquan, is the chief scientist of the CCP’s cutting-edge national defense program 973 project and is deeply involved in the development of equipment technology for the CCP’s military.
The CCP has been pursuing a strategy of integrated civil-military development that supports the modernization goals of the CCP military by ensuring that the CCP military has access to advanced technologies and expertise acquired and developed by Chinese companies, universities and research programs that appear to be civilian entities.
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