Huatai Securities, China's largest stock brokerage by trading volume, rose to 26.10 Hong Kong dollars (US$3.37) in early trade, a gain of five percent. Nanjing-based Huatai sold 1.4 billion shares at 24.80 Hong Kong dollars per piece, raising $4.5 billion.
"I was expecting [gains of] 13-20 percent," Jackson Wong, associate director at United Sumsen Securities, told CNBC. "A lot of investors were expecting it to open at about 28-29 Hong Kong dollars."
Analysts attributed the subpar performance partly to retail investors, who own 70 percent of the shares, looking to cash in on the first-day pop. Huatai's offering was also priced at the top end of the range, which explains the poor debut when compared with its Shenzhen-based rival GF securities' Hong Kong listing, he added. GF shares have surged 35 percent since its 3.6 billion Hong Kong dollar listing in April.
Huatai is the latest Hong Kong offering hoping to cash in on the rally in the Chinese stock markets this year. The Hang Seng index is up 16 percent year to date, while the Shanghai Composite, despite a dramatic selloff last week, is up nearly 50 percent.
Huatai's shares in Shanghai have risen 7.8 percent since its Hong Kong offer was launched on May 18.
Analysts believe there's further momentum to go on the stock, which is the world's second largest IPO this year after the $4.8 billion listing of Spanish airport operator Aena in Madrid in February.
"Huatai is already the largest brokerage firm by market share in terms of daily trading and the outlook for them is very strong. They have probably one of the strongest online platforms and that's the reason why they have gained market share very significantly," Christie Ju, head of research of Hong Kong/China at Jefferies, told CNBC.
United Sumsen's Wong recommends investors hold for now.
"Retail investors are in for a quick buck, and I think they were disappointed today. I would recommend all my clients to sell at 15-20 percent [gains], so probably not today," he said.