Xiaomi Corp. fell as much as 2.9 per cent on its debut, as fears of an escalating trade war and uncertainty about its valuation combined to dampen Hong Kong’s biggest coming-out party in two years.

The Chinese smartphone maker co-founded by billionaire Lei Jun traded as low as HK$16.50 in early trade compared with its HK$17 initial public offering price. That puts Xiaomi’s market value at about US$50 billion, becoming the world’s third largest listed maker of mobile devices. It’s still a far cry from the US$100 billion touted last year.

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. The Chinese company suffered a number of setbacks during its IPO journey, from being forced to jettison a plan to sell Chinese depositary receipts in Shanghai to pricing its shares at the very bottom of a marketed range. It’s also a disappointment for Hong Kong, which this year revised regulations to allow tech companies with uneven voting structures like Xiaomi to float.

Longer-term, an expanding global footprint and business may help it grow into its valuation. Billionaire co-founder Lei Jun struck the gong on Monday in Hong Kong, ushering onto public markets a company twice as expensive as Apple that’s pitching itself as a high-growth Internet play on par with the likes of Facebook Inc. It hopes to become a standard-bearer for Chinese corporations seeking to become global players and leaders in technology.

“Almost no one had believed Xiaomi would be successful eight years ago,” Lei said in prepared remarks.

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. Institutional investors including Hillhouse Capital, Qualcomm Inc. and China Mobile Ltd. also chipped in. Goldman Sachs Group Inc., Morgan Stanley and CLSA Ltd. are leading Xiaomi’s IPO as joint sponsors.