HONG KONG -- Maoyan Entertainment, the operator of China's largest online platform for movie tickets, raised about $250 million in its stock debut in Hong Kong on Monday, just a fraction of the hoped-for sum, as investors here grow more skeptical of Chinese tech startups.
Maoyan opened the session slightly above its offer price of 14.80 Hong Kong dollars at HK$14.82. But it ultimately ended down at HK$14.64.
Maoyan's platform is used by more than 95% of cinemas in China across more than 600 cities. It sold 680 million tickets in the first nine months of 2018, controlling roughly 60% of China's online ticket market.
Backed by such investors as internet service giant Tencent Holdings and food delivery company Meituan Dianping, the company was seen as a rising star and aimed to raise up to $1 billion through its IPO. But a lackluster response from investors delayed the timetable, and the offer price was set at the low end of the indicated range.
Maoyan's market capitalization is more than 25% lower than projected in 2017, when Tencent bought into the company, according to Reuters.
The weak market debut of Maoyan reflects an increasingly cautious stance by Hong Kong investors on Chinese tech companies. Cloud-service provider Weimob, another Tencent-backed company, went public in January at the bottom of its IPO price range. The company is known for its "software as a service" operations, including through Tencent's WeChat mobile app.
Maoyan and Weimob are both rapidly expanding revenue, as are other Chinese technology companies. But they have yet to achieve stability in their earnings. Rather than be carried away by their growth potential, investors are scrutinizing their business models.
Shareholders of China's privately-held companies are increasingly looking for non-IPO exits such as an acquisition by another company or unloading shares to other investors, according to international accounting company Grant Thornton. "Investors have grown more critical of Chinese companies since the second half of 2018," said a market watcher.