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HONG KONG (Reuters) – Xiaomi Corp. made a weak debut in Hong Kong on Monday, with the Chinese smartphone maker's shares in the market. the city.
A packed initial public offering (IPO) in the coming months will include a $ 4 billion deal from online food delivery-to-ticketing platform services Meituan Dianping and an up to $ 10 billion IPO from China Tower, the world's largest mobile tower operator.
"said Hong Hao, chief strategist at BOCOM International Brokerage, said:" We are looking forward to the challenge of IPOs, "said Hong Hao, chief strategist at brokerage BOCOM International.
Xiaomi shares closed at $ 16.80, having touched a low of HK $ 16 in early trade, compared to the price of HK $ 17 per share. The Hong Kong stock market index index ended 1.3 percent higher.
Xiaomi priced the IPO at $ 4.72 trillion – the world's biggest technology in almost four years.
The listing came, however, as escalating trade tensions between the United States and China have shaken markets over the past several weeks. The spat pushed Hong Kong's benchmark index to a nine-month low last week.
51 Credit Card, a Chinese online credit management company, raised HK $ 1bn ($ 127 million) from a Hong Kong IPO after pricing at the bottom of an indicative price range, Thomson Reuters publication IFR reported on Monday.
IPOs, Hong Kong stock exchange CEO Charles Li said, "The market is always open. It's open to everybody … If you do not like the price, you can stay away. "
VALUATION
Xiaomi's IPO valued the firm, which also makes internet-connected home appliances and gadgets, at $ 54 billion, almost half the $ 100 billion it was less than $ 70 billion.
had a market value of $ 53.3 billion.
Xiaomi's IPO had been expected to rise to $ 10 billion, split between Hong Kong and mainland offering, which was postponed last month in a surprise move.
The HK $ 17 price is about the company at 39.6 times its forecast 2018 earnings, while iPhone maker Apple is trading at 16 times and Chinese social media and giant gaming Tencent Holdings at 36.
Mo Jia, a Shanghai-based badyst with industry consultancy Cbadys, said the weak debut was to be expected.
"The market environment is getting conservative. Most recent floats in Hong Kong dropped below IPO prices. Xiaomi's self-positioning as an internet company also needs some convincing, "he added.
While the company makes more than 90 percent of its revenue from selling smartphones and other devices – it has been driven by the internet-based company. Such firms tend to carry far higher valuations than device makers.
"We are an internet firm," Xiaomi's founder and chief executive Lei Jun told the Hong Kong stock exchange.
"From day one, we've set up a dual-clbad share structure. Without the innovation of Hong Kong's capital markets, we would not have a chance to go public in Hong Kong, "he said.
Xiaomi's float was the first under the city's new rules and freedoms, as part of the effort to encourage more tech groups to choose Hong Kong over New York, its arch-rival.
Xiaomi sold 2.18 billion shares in its IPO, 1.4 billion of which were new shares. The deal was led by CLSA, Goldman Sachs and Morgan Stanley.
The company is now the largest smartphone vendor in India and is pushing into European markets including Spain and Russia, though it has lost share in China recently to lower-cost rivals.
Reporting by Julie Zhu; Additional reporting by Donny Kwok and Sijia Jiang; Writing by Sumeet Chatterjee; Editing by Muralikumar Anantharaman
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