(Updates closing price)
By Kennix Chim and Donny Kwok
HONG KONG, June 3 (Reuters) - Shares in Chinese sportswear retailer Xtep International Holdings Ltd fell 6 percent in a disappointing market debut on Tuesday after the company raised $286 million in a Hong Kong initial public offering.
The lacklustre debut is expected to curb enthusiasm for other upcoming issues, with at least six companies looking to list in Hong Kong by the end of June to raise a combined $1.5 billion.
Shares in Xtep opened at HK$3.79 and closed at HK3.80, down from an IPO price of HK$4.05 per share, which was at the bottom of an indicated range.
Hong Kong's Hang Seng Index .HSI dropped 1.8 percent on Tuesday, but has climbed about 16 percent since it hit a seven-month low in March when it was pulled lower by a global credit crunch and tanking mainland China shares.
Xtep, which makes and distributes sports shoes and apparel in China, has its own brands "Xtep" and "Koling", while Disney Sport products have been licensed to the firm since Nov. 2006.
Xtep Chairman Ding Shui-po told Reuters in an interview on Tuesday the firm aimed to buy an international sportswear brand, although he gave no time frame.
"Our multi-brand strategy has allowed us to segment different markets, with different customer groups. We plan to buy a new brand, which should suit Chinese people's style and have synergy with the firm," said Ding.
The Xtep brand targets the mass market in China and was launched in 2002.
Koling, which targets the high end market and returned to a profit for the first five months of this year, is expected to account for 1 percent of the group's revenue this year, Ding said.
Xtep's closing price values the company at 16 times prospective 2008 earnings forecast by sponsor JP Morgan .
Sports goods makers Nike Inc and Adidas trade at 14 to 19 times forecast 2008 earnings, while China's top sportswear retailer Li Ning Co Ltd and China Dongxiang (Group) Co Ltd , which licences Kappa-branded sportswear in China, trade at 21 times and 30 times, respectively.
Xtep, in which U.S. private equity company Carlyle Group [CYL.UL] has 7.2 percent stake, sold 550 million shares, or 25 percent of its enlarged share capital, in a deal handled by JP Morgan and UBS .
The firm plans to use about $75 million, or a quarter of total proceeds, to acquire brands.
Ding said Carlyle Group would advise on the firm's acquisition opportunities, and was not just an investment holder of the firm. ($1=HK$7.8) (Editing by Anne Marie Roantree and Lincoln Feast)