Chinese smartphone giant Xiaomi's listing falls flat

Chinese Smartphone Maker Xiaomi Falls in Hong Kong Trading Debut

The stock finally closed at HK $16.80 but dropped as low as HK $16 earlier in the day (a decrease of 5.88%).

Xiaomi's IPO valued the firm, which also makes internet-connected home appliances and gadgets, at $54 billion, nearly half the $100 billion it had initially hoped for and below its more recent target of at least $70 billion.

Chinese smartphone giant Xiaomi has listed in Hong Kong for $4.7bn (£3.5bn), around half the amount the company had said it hoped to raise in a lacklustre listing.

Beijing-based Xiaomi is the first firm in Hong Kong to trade with a controversial dual-class structure since listing rules were overhauled to allow weighted voting rights for different sets of shareholders.

"Trading below the issue price suggested that investors still felt the valuation of the stocks was relatively high compared with Tencent and Apple", Linus Yip, chief strategist at First Shanghai Securities, told Reuters.

While Xiaomi does not sell its products in America at the moment, the company has said it plans to before the end of next year.

More news: Van Avermaet in yellow as BMC win team time trial

Typically companies are valued on a multiple of profits or sales.

The Xiaomi float adds to Hong Kong's $7 billion worth of new listings so far this year.

"We are an internet firm".

Despite being one of the most anticipated Chinese technology IPOs this year, Xiaomi saw a disappointing valuation of $54 billion (€46 billion), well below its ambitious $100 billion target. It is also the first under the city's new rules permitting dual-class shares, common among USA tech firms, in an attempt to attract tech sector floats.

Xiaomi's float was the first under the city's new rules allowing firms to weight voting rights in favor of company founders, as part of efforts to encourage more tech groups to choose Hong Kong over NY, its arch-rival.

Xiaomi is the biggest smartphone seller in India and is making inroads in Europe.

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