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Chinese smartphone giant Xiaomi's shares open 2.9% down in Hong Kong debut

11 July 2018
Chinese smartphone giant Xiaomi's shares open 2.9% down in Hong Kong debut

After Xiaomi's IPO in Hong Kong, shares dived nearly 4 percent in morning trading on Monday, falling as much as 5.9 percent at one point.

The day began with a value of HK $16.60, plunging down by 6 percent before closing up 1.2 percent.

So why did Xiaomi's IPO flop?

These include a US$4 billion deal from online food delivery-to-ticketing services platform Meituan Dianping and an up to US$10 billion IPO from China Tower, the world's biggest mobile tower operator, Reuters reported.

Xiaomi's trading debut comes at a time when global stock markets have been roiled by the escalating trade clash between the United States and China.

Xiaomi has also faced questions from analysts over its ability to increase profit margins in the future, given that much of its smartphone sales are at the lower end of the market.

"However, given the targeted high valuations of many new-economy IPO hopefuls and the number of IPOs going forward, it will be challenging for the market to digest all of them", Hong added.

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.

The weak pricing values the firm, which also makes internet-connected home appliances and gadgets, at about $54 billion, nearly half its original US$100 billion ambition earlier this year.

Xiaomi's Founder, Chairman and CEO Lei Jun, center, hits the gong during the listing ceremony at the Hong Kong Stock Exchange in Hong Kong.

Xiaomi made 2.18 billion shares available for purchase and was expected to sell them for between HK$17 ($2.17) and HK$22 ($2.8).