The Beijing-based smartphone maker priced the sale of 2.18 billion shares at HK$17 each, the person said, asking not to be identified because the details are private. Xiaomi had offered the shares at HK$17 to HK$22 apiece. The pricing values Xiaomi at about $54 billion, roughly half the company’s initial goal.

Billionaire George Soros and Chinese investment firm Hillhouse Capital were among investors that placed orders for Xiaomi IPO shares, people with knowledge of the matter said earlier.

“Xiaomi’s exceedingly thin margins from hardware significantly drags down its valuation for potential investors,” said James Yan, an analyst with Counterpoint Research in Beijing. “I expect it to invest more in the smartphone unit, especially on international expansion. It also needs cash to beef up its ecosystem in markets like India. All those fronts are extremely capital-intensive.”

The offering is Hong Kong’s biggest first-time share sale since September 2016, when Postal Savings Bank of China Co. priced a $7.6 billion IPO, according to data compiled by Bloomberg. Xiaomi, led by serial entrepreneur Lei Jun, is the first major tech listing in Hong Kong since the city changed its rules to allow founders to keep outsized voting rights.

A Soros-backed fund placed an early order for a small amount of Xiaomi stock, according to one of the people with knowledge of the matter. Hillhouse placed an order of around $600 million, while U.S. asset manager Capital Group Cos. placed an order for more than $500 million of stock, the people said.

Reduced Ambitions

A price at the low end of Xiaomi’s IPO range translates into 22.7 times its forecast 2019 earnings, assuming a so-called over-allotment option is fully exercised, Bloomberg News reported earlier.

Representatives for Xiaomi, Hillhouse and Capital Group declined to comment. A representative for Soros Fund Management didn’t immediately respond to a request for comment. IFR reported the final pricing earlier Friday in Hong Kong, citing unidentified people.

Xiaomi had already scaled back its ambitions for the offering. Top executives were initially pushing for an IPO valuation of as much as $100 billion when listing preparations began last year, Bloomberg News reported at the time.

The company was also planning to raise funds from mainland Chinese investors nearly simultaneously with the Hong Kong IPO. It has since delayed the plan to float so-called Chinese depositary receipts in Shanghai, which reduced its overall fundraising target.

Goldman Sachs Group Inc., Morgan Stanley and CLSA Ltd. led Xiaomi’s IPO as joint sponsors.