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INVESTMENT: Chinese Equities Take a Beating
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Chinese Equities Take a Beating
By Anthony

BT 201712 Investment 07      在过去的10月份,有三家中国企业登录美股:趣店、寺库和瑞思学科英语。然而不容乐观的是,三家公司上市后股价都有所下滑。下滑最严重的是教育公司瑞思学科英语,高达14.4%,趣店和寺库则都下滑7.2%。趣店公司(趣店集团)Qudian Inc.(NYSE:QD) 于10月18日 IPO登陆纽交所,计划发行价为19.00-22.00美元,实际发行价24美元,发行3750万股,募资9亿美金。趣店创立于2014年3月,总部位于中国北京,是一家面向5亿非信用卡人群的金融科技公司。瑞思学科英语IPO于10月登陆纳斯达克,每股12-14美元,发行1100万股,募资1.771亿美金,瑞思2007年10月开始从事初级英语培训服务,在北京开设自己的第一家(直营)学习中心。此后近十年时间,瑞思学科英语将学习中心网络铺向全国,陆续进入上海、广州、无锡、深圳,并在其他75个城市设立了特许加盟形式的学习中心。中国品牌中国奢侈品电商平台寺库(8.34, 0.14, 1.71%)(SECO US)周五登陆纳斯达克(6867.3611, 4.88, 0.07%),收盘时股价较发行价重挫23%,成为了本周在美上市中概股中唯一首日收跌的新股。寺库总部位于中国北京,是一家中国大陆的O2O综合性购物平台,主要通过旗下子公司运营购物平台,公司主要提供奢侈品牌产品及服务,也透过网站、APP、线下体验中心提供生活服务。上述三家公司在最近的交易日中都下跌严重。

      另外,中国最大的互联网平台之一新浪公司已宣布,确定合计本金额为7亿美元的2018年到期可转换高级债券的定价。这些债券将提供给符合1933年版美国证券法及其修正案144A款条件的有资格机构买方。新浪已授予早期认购者有效期30天的期权,让他们能选择超额认购本金额为1亿美元的可转换高级债券。这在第三季度已出现初步盈利。但新浪股价在过去一个半月里已经下跌了15%左右,基于新浪在中国市场上的重要地位这一下跌幅度令人费解。而微软和阿里巴巴的股价涨幅可能超过预期。

      这些股价下跌的情形可能会在接下来的几周内影响股票市场,并可能影响来自其他金融科技公司即将上市的IPO。可以说最近一波中国公司上市的利好情况似乎呈现出了退潮的趋势。未来是否持续疲软,或是可以重归坚挺,都还不好说。

BT 201712 Investment 01Earlier this month could go down as a watershed for newly listed Chinese stocks on the New York Stock Exchange. These finished with one of their worst phases since a new wave of IPO boom that had begun about a month ago. Three of the largest new offerings in New York, namely online microlender Qudian (NYSE: QD), e-commerce firm Secoo (Nasdaq: SECO) and education firm Rise (Nasdaq: REDU) all fell by 7 percent or more in the latest session.
 

At the same time, the statelier, but still somewhat new, Weibo (Nasdaq: WB) also dropped by almost 6 percent after the company announced plans for a $700 million convertible bond and produced some preliminary third-quarter earnings that clearly did not excite too many investors. It is hard to say if there was a single source of the sell-off, but it is safe to say that it did not really go too far beyond these new listing candidates.
 

BT 201712 Investment 03However, the pullback does seem to indicate a pause in the recent phase of excitement over US-listed Chinese equities and New York-listed Chinese equities in general. The largest question is whether this pullback is just a blip or is a sign of a rapid cooling in broader market sentiment. It could signal the start of a slowdown, since Weibo and bellwether Alibaba (NYSE: BABA) have posted larger than expected gains this year that may be putting valuations just slightly ahead of where they should realistically be.
 

That being said, perhaps it is better to start a roundup with actual figures, beginning with the trio of newly listed candidates. The largest drop was Rise Education which fell by 14.4 percent in merely a few weeks. It was followed by 7.2 percent drops for both Qudian and Secoo and a 5.5 percent drop for Weibo.


With concerns of a coming bear market for these equities, Rise now trades at 16 percent below its IPO price, which is a sharp contrast with its gains of about the same during its trading debut earlier this month. Secoo has become a bit of a crazy case, with its latest drop valuing the equity at just over half of its IPO listing. Qudian is the only equity which still trades above its IPO price, although the shares have lost 20 percent of their value this month after their own CEO made some unfortunate remarks.

BT 201712 Investment 04Then there’s Weibo whose stock has now pulled back by about 15 percent over the last month and a half, a baffling move given the importance of the company in the Chinese market. Before that, they had risen around 150 percent this year on a large round of euphoria over the company’s newfound profits in live broadcasting services. In Weibo’s case, there are a couple of actual news items that could plausibly be linked to its latest stock price movement, namely disclosure of its $700 million convertible bond program and some preliminary third-quarter results.
 

BT 201712 Investment 05There is nothing too unusual about the bond offer, as no conversion price is given and the amount is not very large. Release of the preliminary data on the issue seems designed to offset any negative sentiment created by announcement of the new round of bond selling. The company said it earned about $320 million in revenue for the quarter and also about $100 million in earnings. Both of those figures look fairly positive compared to a year earlier and do not seem to be a signal of a major slowdown in the company’s incredible recent growth.
 

This particular pullback could well result in some profit taking after a year of heady gains for many Chinese stocks, which has helped to fuel the current IPO wave we’re now seeing. Bellwether stock Alibaba is emblematic of the group. Its stock is now trading at double where it was at the very end of last year. That also includes a slight pullback of about 5 percent for the shares since the start of this month.

Qudian’s tumble is clearly tied to some remarks the company’s founder made earlier this week, specifically about the company’s bad loan ratio. Analysts apparently believe the ratio is highly understated, and the founder’s remarks on the subject in an interview, to the effect of “we don’t worry about that”, didn’t seem to shed any light on the situation.

BT 201712 INVESTMENT 10But those concerns could weigh on the stock over the next few weeks and could potentially affect upcoming IPOs from other fin-techs like Ppdai. At the end of the day, I’d say the latest wave of China euphoria has probably crested for now, and is likely to ebb from here on. Whether that’s a soft ebbing or hard one is difficult to say, though I imagine we could see pullbacks in current valuations probably in the 10-20 percent range.
 

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