Photo/Hua Ang (NBD)

Jan. 21 (NBD) -- Chinese smartphone manufacture Xiaomi Corporation (01810.HK) announced that it has spent around 100 million Hong Kong dollars (12.8 million U.S. dollars) last Friday buying back a total of 9,849,600 share Class B Shares on the market, 0.041 percent of the issued shares.

The new move is on the heels of Xiaomi's repurchase of 6.14 million Class B Shares at an average price of 9.76 Hong Kong dollars (1.2 U.S. dollars) per share one day before, with the deal value reaching 60 million Hong Kong dollars (7.7 million U.S. dollars).

By injecting more capital, the Chinese company attempts to bolster up the falling stock price.

Since the six-month post-IPO lockup for part of Xiaomi's shares expired on January 9, the company saw a dive of 8.47 percent in stock price by Friday trading.

Closing at 10.16 Hong Kong dollars (1.3 U.S. dollars) on Friday, the stock nearly halved from its peak of 22.2 Hong Kong dollars (2.8 U.S. dollars).

Wen Tianna, chief executive of Partner Capital, mentioned Xiaomi's shareholders have the strong desire to cash out, especially those who reaped large profits at early time. Xiaomi's buyback could only drive up the stock price in a short term, and good performance is the price booster in the long run.

The negative growth of global smartphone sales last year undoubtedly has an impact on the company's share performance, Wen added.

In the domestic market, 414 million mobile phones were shipped in 2018, down 15.6 percent compared with the number for 2017, while the shipment of smartphones registered 390 million handsets, representing a year-on-year drop of 15.5 percent, a figure that is believed to further expand this year.

Seeing the sluggish smartphone sales, the Beijing-based company is seeking new growth drive.

On January 3, Xiaomi launched an independent brand Redmi, which signals the company's adjustment of strategy.

The new firm Redmi will focus on highly cost-effective products, which are to be sold via e-commerce channels.

According to Xiaomi's prospectus, the Redmi product line with prices ranging from 799 yuan to 1299 yuan (117.9 U.S. dollars to 191.7 U.S. dollars) is well received by the low- and medium-end market and contributed over three-fourths of the total shipment. However, the smartphone line brought limited profits to Xiaomi.

After spinning off Redmi segment, Xiaomi plans to make more deployment in medium- and high-end market, new retail and Internet of things ecosystem field.

Email: zhanglingxiao@nbd.com.cn