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HONG KONG, July 7 – Another day. Another IPO. Another Chinese billionaire appears magically.
Mu Rongjun, the co-founder of food delivery giant Meituan Dianping, is preparing to be the last to join the club as the company announced plans to go public last month. Of the 27 billionaires that have surfaced in Asia this year, about one-third made it through initial public offerings in Hong Kong and Shenzhen, according to the Bloomberg Billionaires Index.
Now the question is whether this torrid pace of wealth creation can continue. global trade tensions rise and markets struggle to keep gains
Investor demand already seems to be stalling for Xiaomi Corp at US $ 4.7 billion (RM 18.99 billion), with some institutional investors seeing Offers for the actions of Chinese manufacturers of smartphones Thursday 3:20 pm, with no offer on the gray market, according to people close to the record. That's 11% below the issue price. The iShares MSCI Emerging Markets Asia ETF, which jumped 41% last year, fell 6.2% in June, the worst first half since 2013.
Market volatility fueled by market fears. A trade war could pose problems. According to Ryan Roberts, senior analyst at MCM Partners in Hong Kong, Meituan Dianping is ahead of the IPO
"There are certainly arguments in favor of valuation bubbles in Chinese technology companies, especially for those that are not yet profitable, which may complicate the establishment of their valuation as part of a public offering, "said Roberts in a phone interview." Investors supporting the introduction in stock market must be convinced that profitability and cash-flow generation are on the horizon, not just a promise. "
Meituan Dianping, backed by major shareholder Tencent Holdings Ltd, burns cash for fueling explosive growth and turning to government procurement to do more, as is happening for China's largest Internet companies in food delivery, booking & # 39; hotels & ticketing. It posted a loss of 19 billion yuan ($ 2.9 billion) in 2017 as marketing and research spending increased.
The co-founder of the company Wang Xing was already billionaire before filing a prospectus 11.4% before the offer. That's worth $ 6.2 billion, according to a valuation of 60 billion US dollars. Mu has a fortune of 1.4 billion dollars with his participation of 2.5%. The Beijing-based firm declined to comment on the valuation and wealth of the founders
billionaire ophthalmologist
Meituan, which means "handsome and together," changed his name to Meituan Dianping in 2015 after acquiring 40% of Dianping.com, the Chinese version of Yelp. He bought the rest two years later and published a turnover of 33.9 billion yuan in 2017.
The IPO of C-Mer Eye Care Holdings Ltd produced the This year's first Chinese billionaire, Dennis Lam, became Hong Kong's first billion-dollar ophthalmologist. Xiaomi's offer could produce at least three more, while the debut of Amperex Technology Co Ltd, the world's largest manufacturer of batteries for electric vehicles, yielded four during the first week of negotiation. These eight moguls, with Mu, had a combined net worth of US $ 18.5 billion as of July 3.
Deloitte predicts that the Hong Kong and mainland China IPO markets will reach $ 54 billion for about 340 companies by the end of this year. – Bloomberg
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