Xiaomi's weak stock market debut casts shadow on tech IPOs

Chinese Smartphone Maker Xiaomi Falls in Hong Kong Trading Debut

Phone maker Xiaomi falls then rises in Hong Kong debut

China's Xiaomi, the world's fifth biggest seller of smartphones, made an underwhelming public debut after it hit the Hong Kong Stock Exchange amid concerns around an ongoing trade war between the us and China.

Xiaomi priced its Hong Kong initial public offering (IPO) at HK$17 per share, the bottom of an indicative range, raising US$4.72 billion (S$6.4 billion) in the world's biggest technology float in four years. Shares traded at HK$16.58 apiece as of 3:35 p.m. HK/SIN before closing at $16.80, after slipping as low as HK$16 earlier.

Asked at the listing ceremony on Monday if the low pricing of Xiaomi and some other tech firms will weigh on upcoming IPOs, Hong Kong stock exchange CEO Charles Li said it was not up to the exchange to have a view: "The market is always open".

The IPO pricing valued the firm, which also makes internet-connected home appliances and gadgets, at about $54 billion, nearly half its original $100 billion ambition earlier this year.

The stock that was made available to retail investors drew orders represented 9.5 times the shares offered, the company said Friday.

Traders will be able to bet on further declines by shorting the stock on its first day of trading, according to the Hong Kong exchange operator. 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. "If you don't like the price, you can stay away".

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"From day one, we've set up a dual-class share structure".

Xiaomi had a bumpy start to its market debut in Hong Kong on Monday.

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.

Founder Lei Jun described Xiaomi as a new species of company, pursuing a "triathlon business model" combining hardware, internet and e-commerce services. He believed more high-quality internet companies would come to Hong Kong for listing in the future.

The company had also expected to split its listing with another offering on mainland China, but cancelled that. The company is also making waves in Europe, where after less than two years in the market, it has become the fourth biggest smartphone seller.

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