Valuation Concerns Overshadow Xiaomi IPO

Hailed as the biggest and most important Chinese technology debut in years, Xiaomi Corp. instead began life as a public company on the defensive, struggling to justify a lofty valuation and buffeted by a geopolitical storm beyond its control. Estimates for the smartphone maker valued it at nearly 40 times its earnings for this year, more than twice the level Apple Inc. currently trades at. “It’s a wake-up call for realistic valuations, but its also a case of bad luck for Xiaomi’s timing,” said Andrew Jackson, head of Japanese equities at Soochow CSSD Capital Markets, who’s been monitoring Xiaomi and thinks it too richly valued.