HONG KONG (Reuters) - Chinese smartphone maker Xiaomi Corp’s (1810.HK) shares fell as much as 6 percent on debut in Hong Kong due to valuation concerns, delivering a blow to investor sentiment in the tech sector where peers have lined up listings in the city.
Xiaomi priced its Hong Kong initial public offering (IPO) at HK$17 per share, the bottom of an indicative range, raising $4.72 billion in the world’s biggest technology float in four years.
Its shares touched a low of HK$16 in opening deals. By 0234 GMT, the stock was trading at HK$16.48, down 3 percent, while the main Hong Kong stock market index .HSI was 1.4 percent higher.
The IPO pricing valued the firm, which also makes internet-connected home appliances and gadgets, at about $54 billion, almost half its original $100 billion ambition earlier this year.
“Trading below the issue price suggested that investors still felt the valuation of the stock was relatively high as compared with Tencent and Apple,” said Linus Yip, chief strategist at First Shanghai Securities.
Xiaomi’s HK$17 price represents a multiple of 39.6 times 2018 earnings, while iPhone maker Apple (AAPL.O) is trading at 16 times and Chinese social media and gaming giant Tencent Holdings (0700.HK) at 36.
The listing comes at a delicate time for Hong Kong’s stock market, with the benchmark index hitting a nine-month low last week as investors fret over escalating trade tensions between the United States and China.
The Sino-U.S. trade dispute has roiled financial markets, including
