The stock was at HK$16.88 after the midday break, while the main Hong Kong stock market index was 1.7 percent higher.
Xiaomi's debut comes at a challenging time for Chinese stocks as investor sentiment has been hurt by an escalating trade conflict with the U.S. Last month, Shanghai's key index entered bear-market territory-meaning a 20% drop from its recent high-and Hong Kong's benchmark is down more than 10% from a January peak.
Xiaomi's HK$17 price represents a multiple of 39.6 times 2018 earnings, while iPhone maker Apple is trading at 16 times and Chinese social media and gaming giant Tencent Holdings at 36.
Xiaomi's lukewarm showing marks a blow for a smartphone maker with designs on expanding its global footprint and transforming from a low-margin hardware company into an Internet services player in the mold of Apple Inc.
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While the company makes more than 90 percent of its revenues from selling smartphones and other devices - through which it offers online services - it has pushed to be viewed as an internet-based company. It is also the first under the city's new rules permitting dual-class shares, common among US tech firms, in an attempt to attract tech sector floats. There has been a bit of debate as to whether or not it is a hardware company or an internet company, perhaps when the dust settles and investors know what they're getting into we could see the price move in Xiaomi's favour.
Asked if the low pricing of Xiaomi and some other technology firms will weigh on upcoming IPOs, Hong Kong stock exchange CEO Charles Li said at the Xiaomi listing ceremony: "We can not put a brake".
Xiaomi had attracted a number of A-list investors to its IPO, as George Soros joined fellow billionaires Li Ka-shing, Jack Ma and Pony Ma in endorsing the IPO. From day one, we've set up a dual-class share structure.
Xiaomi is the biggest smartphone seller in India and is making inroads in Europe.