Xiaomi wanted to be China’s first $100bn smartphone maker. The company’s downbeat reception in Hong Kong markets has put paid to that. Shares priced at the low end of the range on Monday and fell in early trading — giving it a market capitalisation of HK$375bn ($48bn). Weaknesses in the business model mean that its real value could be closer to $39bn.

Xiaomi sees itself as more than just a smartphone manufacturer. It gathers information about users’ consumption and behaviour patterns. Such profiles can be used to deliver “internet services” such as adverts. Yet service revenues last year constituted just 9 per cent of the total — less than at Apple.

As a share of gross profit, services look more impressive at 39 per cent. At Apple, the business accounts for 23 per cent. But this may be a consequence of Xiaomi selling its hardware products cheaply. The Beijing-based company has pledged a net profit margin of at most 5 per cent for hardware.