Xiaomi shares will officially begin trading in Hong Kong on Monday (9 July), although weak demand and low pricing cast a cloud on the smartphone maker’s long-awaited listing.
The company said in a filing its Hong Kong IPO was priced at around HKD17 ($2.16) per share, coming in at the bottom of a range of between HKD17 and HKD22 for approximately 2.18 billion shares available.
Bloomberg reported it raised around $3.1 billion in total, half of the $6.1 billion the company had reportedly been seeking.
Pricing the IPO at the bottom end also cut its valuation to around $54 billion, almost half of the $100 billion it had first hoped for.
Xiaomi did, however, reportedly trim this valuation to between $55 billion and $70 billion last month, after delaying a share offering in mainland China.
The issue arose after a valuation dispute with regulators over the smartphone makers’ plans to offer China Depositary Receipts (CDR), which would have enabled investors in its home market to participate in the listing.
Analysts speaking to CNBC said a number of factors could be behind Xiaomi’s meek pricing, including the CDR issue, along with recent stock market downturns in China and Hong Kong due to fears over a trade war between the US and China.
Dickie Wong, executive director for research at Kingston Financial in Hong Kong suggested Xiaomi’s IPO had been overhyped: “Xiaomi is not an internet company,” he said. “It’s just a hardware company, that’s the problem.”
Bloomberg reported some institutional investors saw bids 11 per cent lower than the issue price, at around HKD15.20.