China tech IPO lemons sour investor appetite – Reuters

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A shop of MissFresh is seen at a street in Shanghai, China June 10, 2021. REUTERS/Aly Song

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% read more , following a disastrous debut 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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