Xiaomi shares closed at HK$16.80, having touched a low of HK$16 in early trade, compared to the IPO price of HK$17 per share. Its stocks opened at 16.60 HK dollars (2.11 USA dollars) per share on Monday.
"At this critical moment in Sino-US trade relations, the global capital markets are in constant flux", he said. It also makes internet-connected home appliances and gadgets, including scooters, air purifiers, and rice cookers.
One of the reasons that has been floated for Xiaomi's slow start is that investors are generally unsure about the company because of its uniqueness. Shares lost about 4 percent in early trading but rebounded to 17 Hong Kong dollars ($2.17) at midday.
"Tech companies looking to list their shares will need to take a more conservative approach in pricing", said Anthea Lai, an analyst with Bloomberg Intelligence.
Xiaomi's disappointing offering touted as the biggest tech listing since 2014 and it's unclear how it will affect other high-flying technology firms Hong Kong hopes to line up.
Lei has described Xiaomi as a "new species" of company with what he describes as a "triathlon" business model combining hardware, internet and e-commerce services.
"We are an internet firm". It is also the first under the city's new exchange rules permitting dual-class shares, common in the US tech industry in an attempt to attract tech floats.
The company is the first in Hong Kong to sell shares with a dual-class structure since the city changed its rules to allow founders to keep out-sized voting rights. The company didn't specify when it will debut and how much it expects to raise. The main stock market in London opened higher.
"We would like to thank the Hong Kong Stock Exchange and the Hong Kong Securities Regulatory Commission", Lei Jun, founder and CEO of Xiaomi, said at the listing ceremony.
Xiaomi has also faced questions from analysts over its ability to increase profit margins in the future, given that much of its smartphone sales are at the lower end of the market.
Chinese e-commerce site Alibaba raised $25bn in NY in 2014. The company is also making waves in Europe, where after less than two years in the market, it has become the fourth biggest smartphone seller.