Xiaomi drops 2.9pc on debut
HONG KONG: 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.
The Chinese smartphone maker co-founded by billionaire Lei Jun traded as low as HK$16.50 (RM8.48) in early trade compared with its HK$17 initial public offering (IPO) price. That puts Xiaomi’s market value at about US$50 billion (RM201.5 billion), becoming the world’s third largest listed maker of mobile devices. It’s still a far cry from the US$100 billion touted last year.
Xiaomi’s lukewarm showing marks a blow for a smartphone maker with designs on expanding its global footprint and transforming from a low-margin hardware firm into an Internet services player in the mold of Apple Inc.
The Chinese firm suffered a number of setbacks during its IPO journey, from being forced to jettison a plan to sell Chinese depositary receipts in Shanghai to pricing its shares at the very bottom of a marketed range.