Xiaomi fails to impress on its Hong Kong debut

Chinese Smartphone Maker Xiaomi Falls in Hong Kong Trading Debut

Chinese Smartphone Maker Xiaomi Falls in Hong Kong Trading Debut

Chinese smartphone maker Xiaomi Corp's shares fell as much as 6 percent on debut in Hong Kong due to valuation concerns, delivering a blow to investor sentiment in the tech sector where peers have lined up listings in the city.

At opening, each Xiaomi share was valued at 16.60 Hong Kong dollars ($2.12), below the initial offering price of HK$17 ($2.17).

Xiaomi's shares dipped in early trading, hitting HK$16 in mid-morning trade, down almost 6% from the HK$17 they had been sold at.

The drop came after an affordable smartphones and other gadgets maker, Xiaomi priced its IPO at a valuation of about $54 billion, far lower than its target range.

Founded in 2010 by entrepreneur Lei Jun, Xiaomi has grown from a start-up in Zhongguancun - China's "Silicon Valley" - to become the world's fourth-biggest smartphone vendor at the end of previous year, according to International Data Corp. It later expanded into computers, TVs and home appliances.

The Sino-US trade dispute has roiled financial markets including stocks and currencies, and the global trading of commodities from soybeans to coal over the past several weeks. This has resulted in the Hong Kong stock market, Hang Seng, falling to a nine-month low. While Xiaomi does not sell its products in America at the moment, the company has said it plans to before the end of next year.

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"We are an internet company and from Day 1 we have set up a weighted voting rights structure with dual-class shares", he added.

Let us know in the comments if you think Xiaomi will do well in the medium and long term in terms of its stock price.

At the same time, one of WeDoctor's strongest rivals, Ping An Good Doctor, which is backed by Chinese insurance giant Ping An Insurance Group, has shed about 18 per cent in share prices since its debut on the Hong Kong bourse in May. "I believe that in the future, there will be more high-quality internet companies coming to Hong Kong".

However, Mo Jia (賈沫) of research firm Canalys said the IPO was a "must-go for them even though the current situation is not positive", as Xiaomi would need the cash for an ongoing global expansion as it looks to broaden its scope outside the saturated Chinese smartphone market.

Xiaomi is the biggest smartphone seller in India and is making inroads in Europe.

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