(April 24): Mobvoi Inc, a Chinese artificial intelligence (AI) developer backed by Alphabet Inc’s Google, finished its first day of trading lower in Hong Kong, marking the third stock debut to flop in the city this week.

The shares ended 3.2% lower even after they were sold near the low end of the indicated price range for the initial public offering (IPO). The company and its shareholders raised HK$321 million (US$41 million or RM195.81 million), much lower than the US$200 million to US$300 million it was said to be targeting last year. The slide also contrasted with gains in Hong Kong and Asian stocks markets on Wednesday.

Known for its Ticwatch smartwatches and Chumenwenwen voice-activated search services, Beijing-based Mobvoi was founded in 2012 by a group of former Google employees. It drew Alphabet’s backing just three years later, marking the US tech giant’s first direct investment in China since withdrawing its search engine from the country in 2010.

The disappointing debut adds pressure to Hong Kong’s ailing equity capital market, which saw IPO proceeds decline last year to the lowest level in over two decades, amid concerns over China’s economic growth. On Tuesday, bubble-tea maker Sichuan Baicha Baidao Industrial Co fell 27% in its first session, following the largest IPO in the city since November last year.

Mobvoi’s stock slumped as much as 22% early in the session, recovering most of the losses to end below the IPO price at HK$3.68. The shares were sold at HK$3.80 apiece, compared with the marketed range of HK$3.70 to HK$4.10. Bankers were trying to price the IPO above Mobvoi’s last private round valuation of about US$757 million, according to analyst Andrei Zakharov.

“Management expects to record a decrease in revenue, gross profit and the gross profit margin for the AI enterprise solutions business segment in 2024,” Zakharov wrote in a recent note on Smartkarma, setting a target price of HK$2.70 per share for Mobvoi.