Shares of Xiaomi jumped in Hong Kong as the market opened after the launch of Xiaomi SU7, the first vehicle model of the phonemaker, which sparked higher-than-expected pre-orders.

Hong Kong-listed Xiaomi [HKG: 1810] closed 9 percent higher at HKD16.28 (USD2.10) after surging as much as 16.1 percent earlier, surpassing its issuance price of HKD17 for the first time in two years.

Confirmed pre-orders for the premium electric sedan reached 40,000 units as of this morning, an insider said exclusively to Yicai.

The rules say that buyers can pay a deposit of CNY5,000 (USD691) but they can change their minds in seven days or confirm the order early to start production. During the first 24 hours after launch, the model that integrates Xiaomi handsets with car functions received almost 88,900 orders, per the firm. Showrooms were crowded in Beijing, Shanghai, and Guangzhou over the weekend as some buyers waited till the evening to go for a test drive, Yicai learned.

The Beijing-based company launched the EV on March 28 to join China's smart car race dominated by global marques such as BYD and Tesla, as well as domestic startups such as Xpeng and Nio. Prices for the three SU7 versions are CNY215,900, CNY245,900, and CNY299,900 (USD29,840 to USD41,450), so the mid-range Pro version costs the same as a Tesla Model 3.

Deliveries will begin tomorrow in 28 cities across the country, Lei Jun, chairman and chief executive, said on Weibo today. Due to the better-than-expected demand, the company extended the average waiting time for the top version to a range of 28 and 31 weeks instead of 26 to 29 weeks.

Xiaomi will hike its output to 10,000 units per month, an insider said to Yicai today. Originally, the plan was 5,000 units for this month. However, it will take some time to ramp up production, another source said.

Despite booming pre-orders, Xiaomi's auto unit is still likely to lose money. The chosen price points mean losses, Lei said. The most expensive Max version was supposed to cost around CNY350,000 but the intense competition in China's EV market made the handset maker go below CNY300,000.

Xiaomi's focus on high-end phones is generating better gains as last year, the firm earned CNY17.5 billion (USD2.4 billion) in net profit, up almost seven times from the year before while revenue shrank by 3 percent to CNY271 billion (USD37.4 billion), according to its annual report.