BRIEF: Dmall shares plunge in Hong Kong trading debut
Shares of Dmall Inc. (2586.HK) lost more than half their value on their first trading day, as the provider of software services for retailers raised HK$624 million ($80 million) in its Hong Kong IPO. Dmall said it sold about 25.8 million shares for HK$30.21 each in the listing. The stock opened down 27% and moved steadily downward during the Friday trading session before closing down 54% at HK$13.80. Its market value stood at HK$12.2 billion at the end of the day.
Dmall sold 10% of the shares to local Hong Kong investors, while the rest went to international investors. The Hong Kong portion of the offering was 1.94 times subscribed, while the international portion was 1.36 times subscribed.
Dmall is a subsidiary of Chinese retailing giant Wumei Group that provides software as a service (SaaS) digital solutions to retailers. Its revenue rose 22.9% to 940 million yuan ($129 million) in the first half of this year. But it continues to lose money, including a 230 million yuan loss in the first half of this year. The company is heavily reliant on companies affiliated with Wumei for much of its business.
By Doug Young
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