Xiaomi’s Lei Jun Is Now China’s Fifth Wealthiest Billionaire Amid Stock Surge

Lei Jun, the founder of Chinese tech giant Xiaomi, has climbed to the position of China’s fifth wealthiest billionaire following a remarkable 250% rally in the company’s shares over the past year. Investors have become increasingly optimistic about Lei’s expansion into the electric vehicle (EV) sector, driving Xiaomi’s market performance.

At 55, Lei now possesses a fortune of $35.3 billion, a significant increase from his net worth of $10.9 billion in April 2024. As chairman and CEO of the Hong Kong-listed company, he has seen Xiaomi’s stock surge 27.2% since the beginning of the year, surpassing the 9.1% rise of the city’s benchmark Hang Seng Index.

The surge in Xiaomi’s valuation has been partially attributed to its growing smartphone business, which has shifted toward more profitable, high-end devices. Now the third-largest smartphone maker globally by market share, the company has also benefited from renewed investor confidence in China’s technology sector following DeepSeek’s release of an affordable AI model in January. Analysts have suggested that this development has led investors to anticipate further technological advancements from Chinese firms.

In addition to strengthening its smartphone division, Xiaomi has been investing in artificial intelligence, aiming to enhance its digital assistant, Xiao Ai. However, the primary driver of its stock rally has been its EV business. Despite fierce competition and an ongoing price war in the industry, Xiaomi remains on track to meet Lei’s projected delivery target of 300,000 vehicles in 2025. In a January social media post, Lei set this goal, following a strong 2024 in which the company delivered over 135,000 cars. Analysts have suggested that Xiaomi may even exceed this target, with forecasts pointing to 387,000 units delivered next year.

The company took a significant step in the EV market in March with the introduction of the SU7 electric sedan, priced at 215,900 yuan ($30,000), making it slightly more affordable than Tesla’s Model 3. Xiaomi is expected to launch the YU7, an electric SUV, in the summer, positioning it as a direct competitor to Tesla’s Model Y, though potentially at a lower starting price.

Beyond competing with Tesla, Xiaomi has also been gaining market share from traditional luxury carmakers such as Audi, BMW, and Mercedes-Benz. Analysts have observed that foreign brands have struggled to appeal to China’s younger generation, while Xiaomi’s sleek vehicle designs and Lei’s personal brand have attracted significant consumer interest. Widely regarded as a charismatic figure, Lei frequently engages with customers on social media, providing updates and gathering feedback, a strategy that has further strengthened Xiaomi’s position.

Despite the stock’s rapid ascent, concerns have emerged over Xiaomi’s valuation. Currently trading at a price-to-earnings (PE) ratio of 53 times, the company’s multiple is significantly higher than that of other industry giants, such as Tencent (23 times) and BYD (26 times), the latter having surpassed Tesla as the world’s leading EV manufacturer in the final quarter of 2024.

Some investors, however, continue to view Xiaomi as a high-growth technology stock that justifies its elevated valuation. Market analysts have noted that while Xiaomi’s competitive standing in the smartphone sector has improved, its EV business remains the primary driver of investor enthusiasm.

As Xiaomi continues scaling its vehicle production, Lei stated in a February social media post that he was exploring ways to enhance manufacturing capacity. The company faced supply constraints last year, with some customers waiting up to eight months for delivery due to unexpectedly high demand. Analysts believe that Lei’s remarks reassured investors by signaling plans for a more robust supply chain.

Although Xiaomi’s EV division is currently unprofitable, industry experts expect it to turn a profit by 2026. In the third quarter of 2024, EV sales accounted for 10.5% of the company’s total revenue, with Xiaomi reporting a 30.5% year-over-year increase in sales to 92.5 billion yuan. During the same period, its net profit rose 4.4% to 6.3 billion yuan.

While Xiaomi’s stock is considered expensive, analysts have suggested that its growth trajectory is far from over. With a strengthened smartphone division and an increasingly promising EV business, the company remains positioned for further expansion in China’s competitive tech and automotive markets.

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