Xiaomi’s weak debut portends trouble for imminent Hong Kong tech listings

Chinese Smartphone Maker Xiaomi Falls in Hong Kong Trading Debut

"In the critical time of a China-U.S. trade war and uncertainties looming over the capital markets, the active participation of investors in our shares subscription shows their confidence on Xiaomi", Lei wrote, counting corporate leaders such as Alibaba Group Holding Ltd.'s Jack Ma, Hong Kong tycoon Li Ka-shing as well as Tencent Holdings Ltd.'s Pony Ma among the investors. The dispute has its roots in American concerns about China's tech ambitions and its huge trade surplus with the United States.

The smartphone maker said on Friday it raised just US$3.1 billion after pricing the IPO at the bottom end of a range, cutting its valuation to about US$54 billion - roughly half of the initial goal.

Xiaomi's IPO valued the firm, which also makes internet-connected home appliances and gadgets, at $54 billion, nearly half the $100 billion it had initially hoped for and below its more recent target of at least $70 billion.

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.

Xiaomi sold about 2.18 billion shares, making the IPO the largest in the technology sector since Alibaba Group Holding Ltd raised $25 billion in NY in 2014.




Stocks in Hong Kong and Shanghai have taken heavy hits. "If you don't like the price, you can stay away".

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 the first in Hong Kong to sell shares with a dual-class structure since the city changed its rules to allow founders to keep outsized voting rights, although that means the stock won't be included in MSCI's global benchmarks.

The giant Chinese smartphone maker, which completed its disappointing IPO in Hong Kong on Monday, made sure its workers knew precisely what to say if anyone asked.

It is now the biggest smartphone vendor in India and is pushing into European markets including Spain and Russian Federation, though it has lost share in China recently to lower-cost rivals.

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