China tech IPO lemons sour investor appetite

Missfresh

29/06/2021 06:12

(The author is a Reuters Breakingviews columnist. The opinions
expressed are their own.)
    HONG KONG, June 29 (Reuters Breakingviews) - Once-hot
upstarts from the People’s Republic are getting the cold
shoulder from investors in New York. SoftBank-backed  9984.T 
Dingdong Maicai  DDL.N  slashed its planned initial public
offering by over 70%  urn:newsml:reuters.com:*:nL3N2OA42M, following a disastrous debut
 urn:newsml:reuters.com:*:nL2N2OA01Y from rival grocery app Missfresh  MF.O  last week.
Recently listed peers Full Truck Alliance  YMM.N , also
SoftBank-backed, and e-insurance specialist Waterdrop  WDH.N ,
are trading 6% and 47% below their offer prices respectively. 
    Of the 13 Chinese technology outfits that went public in New
York this year, 8 are underwater, data from Dealogic show.
Beijing’s crackdown on the sector is one factor. Another may be
the growth-over-profit mentality of many companies. Dingdong
Maicai, for example, grew sales by 460% year-on-year to $580
million in the first quarter this year, but its operating loss
also more than quadrupled.
    The big test will be ride-hailing app Didi Global’s debut
this week. The company is aiming for a less-than-expected
valuation of up to $67 billion. Other IPO hopefuls will be
watching closely. (By Yawen Chen)    
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 (Editing by Robyn Mak and Katrina Hamlin)
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