Not what Ping An Good Doctor ordered as shares fall below IPO price
Concerns about profitability, global sell-off in tech shares to blame, says analyst
Ping An Healthcare and Technology, Hong Kong’s most sought-after initial public offering in about a decade, has investors running for cover.
Shares in the unit, which was spun off from Ping An Insurance Group and is also known as Ping An Good Doctor, dropped by as much as 11 per cent to HK$48.90 on Monday, their second day of trading. This has sent the stock well below its offer price of HK$54.80.
The retail tranche of Ping An Good Doctor stocks was oversubscribed by 654 times, and on their debut on Friday, the shares rose by as much as 7.1 per cent – before giving up all their gains at the close.
Ping An Good Doctor’s weak showing underscores investor concern about the company’s ability to return to profit in the future, amid a global sell-off in technology shares, according to Chen Hao, a strategist at KGI Securities in Shanghai.
“There are some institutional investors who chose to sell the shares to lock in profits, or get back their principals,” he said. “They seem not to recognise the company’s current valuation and they have their concern that it’s still not profitable. They are taking a very cautious approach to technology stocks now, against the backdrop of the recent turmoil in the sector.”
