When Xiaomi filed for its Hong Kong IPO in May, speculation was rife that the Chinese smartphone maker could be valued at as much as $100 billion. Now that the offer’s been priced, it’s taken a bit of a haircut.

The company’s IPO was priced at HK$17 ($2.17) per share (paywall), marking the bottom end of the range of HK$17-22 it was targeting. That puts the company’s valuation at roughly $54 billion. With 2.18 billion shares available, it raised $4.7 billion, far lower than the $6 billion it was hoping for. It’s set to list on the Hong Kong stock exchange on Monday, July 9.

The South China Morning Post notes the retail shares were 8.5 times overbought—marking a cooler reception than other recent but smaller Hong Kong listings like Ping An Good Doctor and China Literature, both of which were oversubscribed by more than 600 times. Xiaomi’s list of cornerstone investors also includes only one foreign company—Qualcomm, which happens to be a major supplier to Xiaomi.

Investor hesitation toward Xiaomi’s IPO likely stems in part from skepticism over what founder Lei Jun has described as a “new species” of business model. At present, the majority of its revenue comes from selling inexpensive Android smartphones at razor thin margins. Yet it hopes to eventually get most of its profit from selling “internet services”—namely ads, media, and virtual goods—across its range of apps. Meanwhile, the company has invested in dozens of companies that make internet-connected fitness trackers, air filters, and other gadgets which it sells online and in brick-and-mortar stores.

“You shouldn’t think of Xiaomi as a hardware company, or an internet company, or an e-commerce company. We are the rare company that can do hardware, and do internet, and do e-commerce. This sort of company basically has not existed before,” said Xiaomi CFO Chew Shou Zi said at a press event.

But clearly investors persist in thinking of Xiaomi as more of a hardware company.

No company has ever built a successful software business on the back of commodity hardware. The company’s handsets have sold well in India and might be well received in Europe, but getting overseas smartphone owners to spend time on Xiaomi’s apps could be difficult. Meanwhile, as political tensions between the US and China mount, the company could have a hard time getting its phones in the hands of American consumers.