* Shares lose about a third of their value

* IPO is Hong Kong's second biggest this year

* Weak IPO debuts in Hong Kong "a new normal", analyst says

HONG KONG, May 25 (Reuters) - Shares in China's Horizon Construction Development Ltd lost about a third of their value in their Hong Kong debut on Thursday, suggesting the Asian financial hub needs time to rebound as China's economy reopens from the pandemic.

The initial public offering raised $210.2 million but shares of the construction services firm plunged as much as 29% in early trade to HK$3.21 each.

The stock opened at HK$3.26 after being priced at HK$4.52, which was already at the bottom of a range flagged to investors when the deal was launched.

"This is the new normal," said Dickie Wong, executive director of research at Kingston Securities.

"The situation will continue," he said, adding that investors were shying away from the Hong Kong market due to tension between the U.S. and China, China's slowing economy and growing unemployment among young people there.

Horizon Construction's poor showing comes almost a month after the similar lukewarm debut of Hong Kong's biggest IPO this year, the listing of Chinese liquor company ZJLD Group that raised $675.2 million.

Shares of ZJLD, which is backed by U.S. private equity firm KKR, dropped nearly 20% on their debut.

"The IPO market in Hong Kong hasn't performed too well recently," said Kenny Ng, securities strategist at China Everbright Securities in Hong Kong.

"I believe it's mainly related to the overall sluggish performance of the Hong Kong market."

Hong Kong has hosted $1.56 billion worth of IPOs this year, slightly higher than $1.53 billion at the same time last year, according to Dealogic data. The Hong Kong's stock market has dropped 3.3% this year, according to Refinitiv data.

WEAK DEMAND

Horizon is being spun off from financial services provider Far East Horizon Ltd which will retain a 71.7% stake.

Demand for Horizon Construction shares during the IPO's bookbuild was weak, with retail investors taking up just 12% of the stock on offer to them, according to company filings.

There were 36.47 million shares on offer for sale to Hong Kong's retail investors but they bought only 4.48 million of them, the filings showed.

The stock that was not bought was sold to institutional investors.

Hong Kong's army of retail investors are normally keen IPO participants but market volatility has seen many of them retreat from equities.

The institutional tranche was 1.47 times oversubscribed with 122 investors taking stock, which is also considered weak compared with previous deals where books were multiple times oversubscribed.

"Only when the market trend improves will investor attention be attracted again," Ng said. (Reporting by Scott Murdoch in Sydney and Yantoultra Ngui in Singapore; Editing by Anne Marie Roantree, Muralikumar Anantharaman and Edwina Gibbs)