Tencent-backed Online Ticketing Company Shares Drop on IPO

Published By : 04 Feb 2019 | Published By : QYRESEARCH

Maoyan Entertainment, which is backed by Tencent, is the biggest movie-ticketing platform of China with respect to sales. However, this did not ensure a stellar debut for the company on the stock market. The share price of the company dropped by 1.1% on its IPO in Hong Kong on Monday.

As such, Chinese tech firms have been seeing weak debuts of late.

Coming to Maoyan Entertainment, its share price opened slightly higher than the IPO price at US$1.89 (HK$14.82). The IPO price was KK$14.8.

After that, it achieved a new low of HK$14. This debacle could be sending a strong discouraging messaging to other Chinese tech firms planning to go public.

Reasons Why Maoyan Entertainment Underperformed

However, market pundits think it is the low trading volumes owing to the Lunar New Year that is responsible for the poor performance.

Another reason they think may have contributed for the lacklustre opening is the limited scope of an upside in the domain of online movie ticketing.

In its IPO, Maoyan, which has been making losses, raised almost US$250 million. This was less than expected.

In fact, investors are currently preparing for further downtrends in the tech sector stocks in China. This is because of the tepid stock markets all over the world weighing down on Chinese tech stocks too, along with the economic slowdown in the nation.

Several firms from online food delivery to ticketing services and even smartphone maker Xiaomi Corp. are at present trading below their IPO prices in Hong Kong.

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