Cai Wensheng (left), founder and president of Meitu Inc, and actress Angelababy (center) celebrate with company top executives at the trading debut on the Hong Kong Stock Exchange on Thursday. [Photo/China Daily]

The mainland's selfie app developer Meitu Inc made its debut on the Hong Kong Stock Exchange on Thursday, marking the biggest technology initial public offering in HK in nearly a decade.

Its opening price was HK$8.78 ($1.13), higher than the HK$8.50 initial offering price. It closed flat, at HK$8.5, with the intraday trading low at HK$8.33.

The listing raised $629 million, and Meitu now has a valuation of $4.6 billion.

Meitu's apps have gathered 456 million monthly active users by enabling them to slim faces, change the color of complexions and widen eyes via its photo and selfie editing tools.

Wu Xinhong, founder and CEO of Meitu, said: "Meitu is stepping forward to build up its social media platform to capture a large number of users and also has a plan in artificial intelligence and augmented reality."

Meitu's business model is to focus on attracting a large user base with innovative products and services free of charge initially, followed by the implementation of various monetization strategies when reaching a significant scale, said the company.

Statistics showed although its revenue has increased from 86 million yuan ($12.40 million) to 750 million yuan from 2013 to 2015, its net loss was 2.2 billion yuan in the six months ended June 30, up 69.2 percent compared with 1.3 billion yuan in the same period last year.

Its long-term profitability has come under doubt. The company has about 97 percent of its revenue coming from smart hardware.

The Xiamen-based company aims to generate more money from online advertising, e-commerce and games in the future, said Cai Wensheng, founder and president of Meitu.

Experts said Meitu is still struggling to find a profitable business model.

Shen Meng, director of Chanson & Co, a boutique investment bank in China, said: "The current business model doesn't allow Meitu to get rid of its deficit dilemma. The technological threshold of Meitu's selfie app and hardware products such as smartphones is low, and the competition is very fierce."

Lu Zhenwang, an internet analyst in Shanghai, said new fields such as e-commerce and games have no direct relationship with Meitu's current business, adding that the company faces enormous challenges ahead.