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Bad start for Xiaomi, the fifth-largest smartphone maker in the world, which made its Hong Kong debut yesterday. 2.18 billion shares were sold, including 1.4 billion new shares. For a collection that reached 4.7 billion US dollars and brought the company valuation to about 54 billion. Much less than the goal of Xiaomi who at the beginning of the year was talking about an IPO of 10 billion and worth close to 100 billion dollars. Financial market volatility and investor pessimism weighed on fears of the US-China trade war.
The possibility of a difficult start was in the air: Xiaomi had set the placement price last Friday in the lower fork, to 17 dollars in Hong Kong (2.17 dollars) per action.
At the first trading session, Xiaomi lost up to 6%. But then thanks to the surcharges of banks and institutional investors, it closed the day at 16.80 dollars (-1.2%), limiting the damage, but below the investment price. The negative closing of the stock market debut the first time since 2015 for all the billion dollar IPOs that took place in Hong Kong. It was, however, the largest listing for a Chinese high-tech company for four years, the Alibaba maxi in 2014 and the debut day of more than $ 20 billion.
Matt debut for Xiaomi, giant Chinese smartphone
The Chinese company was the first to sell smartphones in the huge Indian market where Samsung also exceeded. It pushes a lot on the expansion of European markets: Russia, Spain, Italy, France. But in recent times, it has lost market share in China due to the advance of low cost competitors. Some investors are skeptical about its business strategies: on the Xiaomi website, not only mobile phones are sold, but also machines for cooking rice, sports shoes, trolleybuses and even toothbrushes. The multifaceted co-founder of the company, Lei Jun, who was also the CEO of the Chinese compared to Steve Jobs for his charisma. He plans to launch with the Xiaomi brand, for the moment only with e-commerce, but in the near future in physical retail a chain of stores with high-tech products and low-cost design on the model of Japanese Muji.
Xiaomi's quote raises doubts about the upcoming Chinese unicorns Ipo already planned: from Didi Chuxing, the Chinese version of Uber, up to Ant Financial, the group's huge financial arm Alibaba and Meituan Dianping, a widespread online service of food at home. The three companies have benefited from the strong growth of the Internet and the mbadive spread of smartphones: China is the world's largest Internet market in terms of users. But the Chinese high-tech boom of recent years, often compared to that of Silicon Valley, should calm down in the heat of the trade war unleashed by Donald Trump. Even the Chinese economy – and Asia in general – shows worrying signs of slowing down. The emerging Asian equity index MSCI, up 41% in 2017, lost 6.2% over the first six months of the year. Worst result of 2013.
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