Chinese Smartphone Maker Xiaomi Falls in Hong Kong Trading Debut

Chinese Smartphone Maker Xiaomi Falls in Hong Kong Trading Debut

Chinese Smartphone Maker Xiaomi Falls in Hong Kong Trading Debut

Xiaomi Corp. fell as much as 2.9 per cent on its debut, as fears of an escalating trade war and uncertainty about its valuation combined to dampen Hong Kong's biggest coming-out party in two years.

Its shares were priced at 17 Hong Kong dollars (about $2, £1 or AU$3), but hit a low of 16 HK dollars before bouncing back up to 16.88 HK dollars ahead of the midday break, according to Reuters.

The HK$17 price valued the company at 39.6 times its forecast 2018 earnings, while iPhone maker Apple is trading at 16 times and Chinese social media and gaming giant Tencent Holdings at 36.

It's also a disappointment for Hong Kong, which this year revised regulations to allow tech companies with uneven voting structures like Xiaomi to float.

"Trading below the issue price suggested that investors still felt the valuation of the stock was relatively high as compared with Tencent and Apple", said Linus Yip, chief strategist at First Shanghai Securities.

'I kind of like Hitman a lot' - Rohit Sharma
That wicket and the consequent quiet, with Pandya promoted ahead of MS Dhoni and Suresh Raina, left India 44 to get in four overs. Buttler and Roy scored 73/0 in six overs with both in-form batters smacking 10 fours and four sixes in the process.

While Xiaomi does not sell its products in America at the moment, the company has said it plans to before the end of next year. These include a $4 billion deal from online food delivery-to-ticketing services platform Meituan Dianping and an up to $10 billion IPO from China Tower, the world's largest mobile tower operator. That is far short of the oversubscription rates for other tech IPOs in Hong Kong. Its closing share price for the first day of trading was HK$16.78. The market is always open.

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

Let us know in the comments if you think Xiaomi will do well in the medium and long term in terms of its stock price.

Xiaomi is the biggest smartphone seller in India and is making inroads in Europe.

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