Cloud Village, music streaming arm of NetEase, raised $422 million in its Hong Kong IPO. (PHOTO / IC)

Shares of the music streaming arm of Chinese mainland's gaming giant NetEase Inc dropped in their trading debut in the Hong Kong Special Administrative Region, following an initial public offering that priced shares at the mid-point of a marketed range.

Cloud Village runs NetEase’s music streaming platform on the mainland and generates most of its revenue through subscriptions, virtual gifting and advertising

Cloud Village Inc shares fell 2.5 percent to close at HK$199.90 ($25.66) on Thursday. They were sold at HK$205 each, within a range that went from HK$190 to HK$220. It raised $422 million in the IPO.

The company began trading in the Asian financial hub after having put the listing on hold in August, delaying it just days after it began gauging investor demand. Initially it was pursuing an IPO of about $1 billion, Bloomberg News had reported in May.

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Pedestrians wearing protective masks walk past signage at the NetEase Inc campus in Hangzhou, China, on June 10, 2020. (PHOTO / BLOOMBERG)

Cloud Village runs NetEase’s music streaming platform on the mainland and generates most of its revenue through subscriptions, virtual gifting and advertising. 

Started in 2013, the music wing has since expanded its products to offer everything from online karaoke to live-streaming and lyrics sharing. The company has yet to deliver profit because of costs stemming from its fierce rivalry with Tencent Music Entertainment Group. 

READ MORE: Mainland gaming giant NetEase soars in HK debut

China International Capital Corp, Credit Suisse Group AG and Bank of America Corp are the sponsors of the deal.