Chinese Smartphone Maker Xiaomi Falls in Hong Kong Trading Debut

Angelica Greene
July 11, 2018

Shares of Chinese smartphone maker, Xiaomi, stumbled on their debut in Hong Kong on Monday, opening for trade down more than 2 percent and slipping as much as 5.88 percent during the session.

Xiaomi's shares started trading slightly below the initial offering price.

Shares in Xiaomi, the Chinese mobile phone maker, slid nearly 6% at the start of trading in Hong Kong. A lot of companies that went public in 2017 and 2018 have seen their share prices plummeting and the situation was made worse thanks to the ongoing trade war between China and the U.S. While the company had hoped to raise enough funds to value it at $100 billion, Xiaomi only raised $4.7 billion from the IPO, giving the company a total valuation of $54 billion.

The company, which had hoped to be valued at $100bn (£75 billion) earlier this year, is now worth about $53bn, making it the third largest listed maker of mobile phones.

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 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.

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Stocks in Hong Kong and Shanghai have taken heavy hits.

"No matter how you look at it, it's too expensive for me", said Francis Lun, chief executive officer at brokerage GEO Securities, drawing comparisons between the price-to-earnings ratio of Xiaomi and Apple. Most recent floats in Hong Kong dropped below IPO prices.

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

"We are different from many of our peers", said Liao, shrugging off concerns a bearish sentiment towards technology stocks could weigh on WeDoctor's performance in Hong Kong.

Lei said without the innovation of the Hong Kong capital markets, it would be hard for Xiaomi to be listed in Hong Kong.

Xiaomi argued that it should receive a higher valuation than other hardware makers because of the internet services - such as music and video streaming apps - it offers with its devices. 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.

Other reports by GizPress

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