Xiaomi has been just one of the unicorns rushing to be listed. A variety of internet start-ups have put in their IPO applications recently, including well-known companies such as Meituan and Pinduoduo. Listing may bring the companies more funding, though they face a drop in their valuations once they enter the market. Chen Tong takes a closer look.

Internet unicorns have been drawing a lot of attention with their IPO plans because their rapid rise has given them high valuations in the runup to listing. The problem is that some of them have seen those valuations drop dramatically once they are listed. Xiaomi is just one. The company's issue price today was 17 Hong Kong dollars per share, making its valuation 380 billion Hong Kong dollars, much lower than its previous market valuation. The same was true of U-Xin, the online car dealer which listed in New York at the end of June. The company's valuation dropped significantly at its debut. Experts believe that the sluggish fiscal performance of these companies is what's leading to the drop in their valuations.

YANG ZHONGNING, INVESTMENT CONSULTANT INDUSTRIAL SECURITIES "When more and more similar companies enter the market, their valuations will definitely drop because investors have more choices. We've also seen that some of the start-ups haven't made any gains after listing. The fiscal performances of companies like Zhong'an Insurance and Ping An Healthcare and Technology were not very good when they listed. So we still have to keep an eye on their long-term performance after the IPO excitement fades. But even at the moment the share prices of these companies are under pressure."

Still, everyone seems to believe that listing continues to make sense for internet start-ups. Young companies looking for financing have been encouraged by the government's support for unicorn companies and the new policy of the Hong Kong Stock Exchange which now welcomes start-ups even if they cannot show much of a profit record. Data provider Dealogic shows 26 domestic tech companies have issued shares worth 8.5 billion dollars so far this year.

SHAO YU, CHIEF ECONOMIST ORIENT SECURITIES "Some of the internet start-ups are still focusing on working out their business models, so they haven't made any profits. Getting enough public finance to support their future development is more or less helpful to them. So they are looking at things in the long term."

Experts expect more China companies to IPO in the second half of the year, with most likely to list in Hong Kong. Consulting firm Deloitte predicts that some 15 China unicorn companies will issue IPOs in Hong Kong in the second half of this year.