ArrowArtboardCreated with Sketch.Title ChevronCrossEye IconFacebook IconIcon FacebookGoogle Plus IconLayer 1InstagramCreated with Sketch.Linkedin IconIcon LinkedinShapeCreated with Sketch.Icon Mail ContactPath LayerIcon MailMenu BurgerIcon Opinion QuotePositive ArrowIcon PrintRSS IconIcon SearchSite TitleTitle ChevronTwitter IconIcon TwitterYoutube Icon
Companies

Xiaomi shares make debut at 2.9% below offer price

Founder Lei Jun blames US-China trade tension for disappointing opening

Xiaomi Chairman and CEO Lei Jun kicked off trading in his company's shares at a ceremony at the Stock Exchange of Hong Kong (Photo by Takeshi Kihara).

HONG KONG -- Xiaomi shares opened at 16.50 Hong Kong dollars, 2.9% below their offer price in their market debut on Monday, as the Chinese smartphone maker struggled to convince investors that the issue is as valuable as those of internet companies such as Tencent Holdings

Xiaomi, founded in 2010, is the first company listed in Hong Kong with a dual-share class structure, which gives greater voting rights to certain shareholders. 

"Although the overall market is subdued, I beleive good companies will stand out” said founder Lei Jun at a listing ceremony on Monday, citing factors such as trade tensions between China and the U.S. 

Lei said many people believed eight years ago that Xiaomi's effort to produce smartphones based on an internet model was a “crazy idea.” But, he said, all innovations are questioned and misunderstood at first. 

Market analysts have indeed questioned Xiaomi's target market valuation since it announced plans to float its shares. Xiaomi had hoped for a valuation of $100 billion. But the final offer price of 17 Hong Kong dollars per share put the company's market capitalization at the lower end of its target range, at around $54 billion. 

Xiaomi's poor debut could also worry other “new economy” companies, which look to take advantage of Hong Kong’s listing reforms. But this did not seem to concern Charles Li, chief executive of the Hong Kong Stock Exchange.

“ I really don’t put too much focus on the first day of trading. In this environment, it’s already a pretty specular success to get it done,” Li said, when asked if he was disappointed by Xiaomi's opening day.

You have {{numberReadArticles}} FREE ARTICLE{{numberReadArticles-plural}} left this month

Subscribe to get unlimited access to all articles.

Get unlimited access
NAR site on phone, device, tablet

You have {{numberReadArticles}} FREE ARTICLE{{numberReadArticles-plural}} left this month

Subscribe to get unlimited access to all articles.

3 months for $9

Get unlimited access
NAR site on phone, device, tablet

Your trial period has expired

You need a subscription to...

See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

See all offers
NAR on print phone, device, and tablet media