Ping An Good Doctor's shares slide below IPO price on valuation worries

China Literature

07/05/2018 08:08

HONG KONG, May 7 (Reuters) - Ping An Healthcare and
Technology Co Ltd's  1833.HK  shares tumbled as much as 11
percent on their second day of trading on Monday as investors
worried about the high valuations for the loss-making firm that
saw Hong Kong's largest new listing in 2018.
    The operator of China's biggest online healthcare platform
had a tepid stock market debut on Friday, with its shares
closing unchanged from their IPO price of HK$54.80. On Monday,
they fell to a low of HK$48.90 before partially erasing the
losses in the afternoon to trade at HK$50.90, down 7.0 percent.
    The company, also known as Ping An Good Doctor, raised $1.12
billion in an IPO that priced at the top of its range. It had
secured seven cornerstone investors including Singapore
sovereign wealth fund GIC  GIC.UL , Canada Pension Plan
Investment Board and U.S. asset manager BlackRock  BLK.N .
 urn:newsml:reuters.com:*:nL3N1SB183  urn:newsml:reuters.com:*:nL3N1S12WW
    "This is within expectation; the stock's pricing was high
and it trailed the disappointing performance of previous new
economy companies," said Kingston Lin, CEO of Ox Financial
Securities.
    Shares of some other technology-related companies that
floated recently have been weak in Hong Kong. ZhongAn Online P &
C Insurance Co  6060.HK  recently dropped below its IPO price.
China Literature  0772.HK , which soared on its debut last year,
has been declining and is now close to its IPO price.
    The stock market performance of Ping An Good Doctor, which
is backed by China's biggest insurer by market value, Ping An
Insurance Group Co of China Ltd  2318.HK   601318.SS , raises
questions about investor appetite for potential flotations of
other Ping An units.
    These include Lufax, China's biggest online wealth
management platform, and Ping An Healthcare Management, a
medical data collection and analysis business. 
    Ping An Good Doctor's debut comes at a time when Hong Kong
is implementing new rules to attract more tech and biotech IPOs
to the city, away from other major centres like New York and the
Chinese mainland.
    Chinese smartphone and connected device maker Xiaomi
 IPO-XMGP.HK  filed an IPO application in Hong Kong last week in
which it could raise about $10 billion in the largest listing
globally in almost four years.  urn:newsml:reuters.com:*:nL3N1SA13X
    Lin of Ox Financial said the market is holding a cautious
view towards even the IPO of Xiaomi.
    "The market has shifted focus from last year and it is not
upbeat on tech companies anymore," he said.

 (Reporting by Clare Jim; Editing by Muralikumar Anantharaman)
 ((clare.jim@thomsonreuters.com; +852 2912 6653; Reuters
Messaging: clare.jim.thomsonreuters.com@reuters.net))