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The Ping An Good Doctor's share falls below the initial public offering level due to concerns over valuations
China's largest health care website had a lukewarm stock exchange launch on Friday, with stocks trading at HK$54.80, the same as the HK$54.80 share in IPOs. Also known as Ping An Good Doctor, the firm collected $1.12 billion in an initial public offering that fetched the highest prize in its class.
"This is in line with expectations; the share performed well and lagged behind the frustrating performances of earlier New Economics companies," said Kingston Lin, Ox Financial Securities chief executive officer. The stocks of some other technology-related businesses recently listed on the stock exchange were poor in Hong Kong. The ZhongAn Online P & C Insurance Co. recently fell below the initial public offering level.
Ping An Good Doctor's stock exchange perfomance, backed by China's largest insurance company, Ping An Insurance Group Co of China Ltd, poses the question of investors' propensity to go public with other Ping An shares. This includes Lufax, China's largest on-line asset gathering solution, and Ping An Healthcare Mangement, a company that collects and analyzes healthcare information.
But Ping An Good Doctor's début comes at a period when Hong Kong is putting new regulations in place to bring more technology and biotechnology ISPOs into the cities, away from other big centres like New York and China's continent. Xiaomi [IPO-XMGP.HK], the China-based manufacturer of smartphones and interconnected devices, submitted an initial public offering (IPO) proposal last weekend in Hong Kong, in which it was able to collect around 10 billion dollars for the world's biggest list in almost four years.
Ox Financial's Lin said the prudent attitude of the markets is even towards Xiaomi's flotation. "Compared to last year, the overall situation has changed and the markets are no longer optimistic for technology companies," he said.
What Ping An Good Doctor ordered as stock does not drop below the initial public offering value.
Hong Kong's most sought-after IPO in about a decade, Ping An Healthcare and Technology, has an investor base seeking coverage. Stocks in the entity divested by the Ping An Insurance Group, also known as Ping An Good Doctor, fell by up to 11 percent to HK$ 48.90 on Monday, its second dealing date.
The share is thus well below its offering of HK$ 54.80. Ping An Good Doctor's share was 654 x over-subscribed, and on its Friday début the share even climbed 7.1 per cent before finally giving up all its profits.
The poor performance of Ping An Good Doctor underlines investors' concerns about the company's capacity to regain profits in the midst of a worldwide sell-off of tech stocks, said Chen Hao, strategy engineer at KGI Securities in Shanghai. At HK$52.75, Ping An Good Doctor recently closed 3.7 percent lower, corresponding to a total capitalization of HK$56.3 billion (US$7.2 billion).
According to Bloomberg figures, it is now the fifth biggest tech firm on the Hong Kong Stock Exchange in relation to value. Proceeding from the IPO, the $1.1 billion dollar fund still struggles to make a living. Subdued stock appreciation is due to a worldwide sell-off of tech firms in the Hong Kong markets, with some Belwether firms lagging behind expectations.
Not one of the Hong Kong's leading tech firms performed well this year. The Tencent Holdings, the highest fair value, has declined 7.2 percent since April, while Apple's Sunny Optical Technologies Group and AAC Technologies Holdings declined 7.1 percent and 20 percent, respectively.
In contrast to the continent, where typical debut growth in the number of initial public offerings was strong, the Hong Kong markets have already become used to breaching bid price levels. For example, the ZhongAn Online P&C Insurance stock has fallen by 15 percent since its quotation in September.