Smartphone maker Xiaomi debuts on Hong Kong stocks

Smartphone maker Xiaomi debuts on Hong Kong stocks

Xiaomi faces nearly 5% share fall in Hong Kong trading debut, indicating a disappointing pricing and a slow start in mainland China.

At the same time, one of WeDoctor's strongest rivals, Ping An Good Doctor, which is backed by Chinese insurance giant Ping An Insurance Group, has shed about 18 per cent in share prices since its debut on the Hong Kong bourse in May.

Xiaomi's shares were trading at 16.32 Hong Kong dollars (about $2.08) Monday morning, compared with their offering price of HK$17.

"Although the macroeconomic conditions are far from ideal, we believe a great company can still rise to the challenge and distinguish itself", he said in a speech at the listing ceremony.

The shares touched a low of HK$16.50 in opening deals on Monday.

By contrast, China Literature Ltd, the e-book arm of Tencent Holdings, late a year ago raised $1.1 billion in its Hong Kong IPO amid heavy demand, with the retail portion being 625 times oversubscribed. Analysts said the company had been weighed down by investor concerns about its hefty valuation on the back of an unfolding US-China trade war that poses a huge threat to China's technology companies, as they could find it harder to acquire core technologies from a more hawkish Trump administration.

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Shares of some other tech-related companies that floated recently have been weak in Hong Kong.

Asked if the low pricing of some technology firms including Xiaomi will weigh on upcoming IPOs, Hong Kong stock exchange Chief Executive Charles Li said: "We can not put a brake". It's open to everybody...

"No matter how you look at it, it's too expensive for me", said Francis Lun, chief executive officer at brokerage GEO Securities, drawing comparisons between the price-to-earnings ratio of Xiaomi and Apple. But in a surprise move last month, it postponed its mainland share offering.

Xiaomi argued that it should receive a higher valuation than other hardware makers because of the internet services - such as music and video streaming apps - it offers with its devices.

"We are an internet company and from Day 1 we have set up a weighted voting rights structure with dual-class shares", he added. "Without the innovation of Hong Kong's capital markets, we wouldn't get a chance to go public in Hong Kong", he said.

Chinese e-commerce site Alibaba raised $25bn in NY in 2014.

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