Published: Mon, July 09, 2018
Technology | By Lionel Gonzales

Chinese Smartphone Maker Xiaomi Falls in Hong Kong Trading Debut

Chinese Smartphone Maker Xiaomi Falls in Hong Kong Trading Debut

Xiaomi priced its Hong Kong initial public offering (IPO) at HK$17 per share, the bottom of an indicative range, raising $4.72 billion in the world's biggest technology float in four years. The main Hong Kong stock market index ended 1.3 percent higher.

So why did Xiaomi's IPO flop?

One of the reasons that has been floated for Xiaomi's slow start is that investors are generally unsure about the company because of its uniqueness.

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Typically companies are valued on a multiple of profits or sales.

Chinese smartphone maker Xiaomi Corp's shares dropped 2.9 per cent on debut in Hong Kong on Monday, in a blow to investor sentiment for the tech sector as a raft of peers line up their own listings in the city.

While the company makes more than 90 percent of its revenues from selling smartphones and other devices - through which it offers online services - it has pushed to be viewed as an internet-based company.

The Xiaomi float adds to Hong Kong's $7 billion worth of new listings so far this year. "Without the innovation of Hong Kong's capital markets, we wouldn't get a chance to go public in Hong Kong", he said. Meanwhile, ride-hailing company Didi Chuxing and Alibaba-affiliated digital payments firm Ant Financial are also reportedly considering IPOs. In June, we said that Xiaomi was looking to raise about $5 billion (HK$39.22 billion) from shares, while it didn't meet its goal in the first day of trading, it is over half way there and maybe things will pick up for the unique firm.

The company had grown from a small startup to become the world's fourth-largest smartphone vendor at the end of a year ago. Latin America is also on the horizon.

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