The company's shares sank nearly 6 percent to HK$16 at one point - from an IPO price of HK$17, which was already at the low end of its expected range - before clawing back to end the morning at HK$16.98.
Selling phones into overseas developed markets might be a more realistic goal, given Xiaomi's growing credibility with affordable but reliable devices, than building a full-fledged internet content and services wing. He told Yicai that it was not necessarily a bad thing for Xiaomi to start from a lower point.
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. However, its estimated value of US$54.3bn fell short of the previous valuation range of US$70bn-US$100bn.
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In a speech Monday, Lei Jun, the company's founder and chairman, said he expected others to follow.
Xiaomi, which helped to pioneer the trend for ultra-low-priced smartphones, says it plans to become an equipment-and-hardware brand alongside Apple Inc.
Xiaomi's listing comes as investors fret over escalating trade tensions between the United States and China that have shaken markets over the past several weeks. "If you don't like the price, you can stay away". "I believe that in the future, there will be more high-quality internet companies coming to Hong Kong".
And Jackson Wong, at Huarong International Securities, warned there could be repercussions for Hong Kong's IPO outlook, saying a tepid start for Xiaomi would suggest a weak appetite for new listings in the city.
"We are an internet company and from Day 1 we have set up a weighted voting rights structure with dual-class shares", he added.
The company is now the biggest smartphone vendor in India and is pushing into European markets including Spain and Russian Federation, though it has lost share in China recently to lower-cost rivals.