HONG KONG: Chinese smartphone giant Xiaomi fell on its Hong Kong stock debut Monday, following a long-awaited initial public offering overshadowed by China-US trade tensions and falling global markets.
Even before public trading started confidence was low, with investors selling at a discount on the unofficial “grey market” last week, Bloomberg News reported.And on Monday it ended down 1.18 percent at HK$16.80, though that was much better than in mid-morning trade, when it was briefly down almost six percent.
Despite being one of the most anticipated Chinese technology IPOs this year, Xiaomi saw a disappointing valuation of US$54 billion, well below its ambitious US$100 billion target.
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 last year, according to International Data Corp.
Lei has described Xiaomi as a “new species” of company with what he describes as a “triathlon” business model combining hardware, internet and e-commerce services. Its products range from smart home gadgets like air purifiers to non-tech items such as pillows and ballpoint pens.
A delay in Xiaomi’s plan to launch new so-called Chinese Depository Receipts (CDRs) in Shanghai as well as doubts about the sustainability of its business model were also among reasons for the lower valuation, analysts said.