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Chinese smartphone maker actions
Xiaomi
Corp.
, which raised 4.7 billion US dollars in one of Hong Kong's largest IPOs in recent years, fell on Monday for the first time as the general market rose.
The beginning of the performance came after Xiaomi set its IPO at the low end of an expected range, giving the company a valuation of $ 54 billion. If stocks behave badly in the coming days and weeks, they could hurt the prospects of other tech companies that are preparing their own multi-billion dollar listings in the city.
Xiaomi opened at $ 16.60 HK, 2.4% lower than his $ 17 HK IPO. The shares fell to 16 Hong Kong dollars per share and recently amounted to 16.82 Hong Kong dollars. The broader Hang Seng index rose 1.6%
The stock made available to individual investors recorded orders representing 9.5 times the offered shares, the company said Friday. This is far from oversubscription rates for other IPOs in Hong Kong. Orders for a separate block for foreign investors only slightly exceeded the amount offered.
Xiaomi's debut comes at a difficult time for Chinese equities as investor sentiment has suffered from escalating trade conflict with the United States. The smartphone market is losing more than 10% of its January peak.
"Investors are skeptical about Xiaomi's growth momentum," said Jacky Zhang, an analyst at BOC International in Shanghai
Xiaomi is one of China's leading manufacturers of cheap and stylish smartphones and other consumer gadgets.Founder and CEO
Lei Jun
hopes that the IPO can fuel more international expansion after the company has already grown in India, Southeast Asia and Europe. Finally, he would like to sell phones in the United States
Yet, Xiaomi stumbled in the period before the flotation. He has tried to position himself as an Internet company rather than as a pure maker of gadgets, in the hope of obtaining a higher valuation.
Investors were skeptical and the eight-year-old company finally set its IPO at the bottom of the scale. end of expectations. The estimate of $ 54 billion was well below the initial projections of $ 100 billion, but lower than the forecasts of several analysts from $ 65 billion to $ 85 billion. "Hong Kong investors have never seen anything like this before"
Hans Tung,
Manager of GGV Capital and former investor of Xiaomi, during the stock exchange ceremony on Monday. "Hong Kong investors need time to get used to history, just as US investors have taken the time to get used to
Facebook
.
"
The company is the first to register in Hong Kong with surveillance actions under new rules implemented by
Hong Kong trade and clearing
Ltd.
-Stella Yifan Xie contributed to this article.
Write to Dan Strumpf at [email protected] and Joanne Chiu at [email protected]
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