BRIEF: Despite post-IPO plunge, Dmall gets included in the Hang Seng Composite
Dmall Inc. (2586.HK), a provider of software-as-a-service (SaaS) solutions to retailers, said on Monday it has been selected as a new constituent of Hong Kong’s benchmark Hang Seng Composite Index, effective March 10.
Despite its relatively large size and unique positioning as a provider of digital solutions to retailers, Dmall’s Achilles heel is its reliance on major shareholder Zhang Wenzhong, whose Wumei family of companies provides nearly 90% of its business.
The company sold shares for HK$30.21 each in its IPO last year, only to see them plunge 54% to HK$13.80 on their listing day. The stock continued to decline to a low of HK$4.78, dropping its market cap from HK$27 billion ($3.47 billion) to just HK$4.3 billion.
Shares of Dmall opened up by 1% at HK$7.05 on Monday and rose through the session. They were up 6% in afternoon trading at HK$7.39, though the stock is still down over 70% from its offering price.
By Lau Chi Hang
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