China’s Xiaomi makes underwhelming public debut in Hong Kong IPO

09 July, 2018, 15:42 | Author: Eric Barnett
  • Chinese Smartphone Maker Xiaomi Falls in Hong Kong Trading Debut

Xiaomi's debut comes at a challenging time for Chinese stocks as investor sentiment has been hurt by an escalating trade conflict with the U.S. Last month, Shanghai's key index entered bear-market territory-meaning a 20% drop from its recent high-and Hong Kong's benchmark is down more than 10% from a January peak.

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

Xiaomi Corp. shares slipped and then rebounded Monday in the Chinese smartphone maker's first trading day in Hong Kong following a multibillion-dollar initial public offering.

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

By contrast, China Literature Ltd, the e-book arm of Tencent Holdings, late past year raised US$1.1 billion in its Hong Kong IPO amid heavy demand, with the retail portion being 625 times oversubscribed.

"We are an internet firm".

Xiaomi's IPO comes days after the United States and China began a trade war that has seen each nation imposes billions in tariffs on the other.

Xiaomi struggled in its debut on the Hong Kong stock market Monday morning, with its shares falling by almost 6 percent.

Shares of some other tech-related companies that floated recently have been weak in Hong Kong. The market is always open.

But doubts about the sustainability of its business model were among the reasons for the lower valuation, analysts said.


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