Tencent-backed movie-ticketing app Maoyan makes weak Hong Kong debut

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Tencent-backed Maoyan Entertainment, China's biggest movie-ticketing platform by sales, closed its debut day in Hong Kong with 1.08 percent falling on Monday, the latest in a string of weak starts among new tech firms listing in the financial hub.

Shares in Maoyan Entertainment opened at 14.82 Hong Kong dollars (1.89 U.S. dollar), barely higher than the initial public offering (IPO) price of 14.8 Hong Kong dollars, which was already at the bottom end of an indicative range.

They then fell to as low as 14 Hong Kong dollars and closed at 14.64 Hong Kong dollars.

However, thin trading volumes in a truncated trading session on the eve of the Lunar New Year could have contributed to Maoyan's lackluster performance, said Ke Yan, co-head of research at Aequitas Research.

“While on one hand there's a lack of demand for the name given the limited upside in the online movie ticketing market in terms of market penetration, on the other hand, the upcoming Chinese holiday season could be another contributing factor for the thin volume and the poor performance,” Yan said.

Loss-making Maoyan raised 250 million U.S. dollars in a smaller-than-expected IPO, and could raise up to 287 million U.S. dollars if a green shoe, or over-allotment option, is exercised within the first month of trade. That is, however, a fraction of the amount it was looking to raise last year.

Its float is being watched as a test of investor sentiment for Hong Kong deals after a patchy performance by newly listed stocks in 2018 amid U.S.-China trade tensions.

Many firms such as online food delivery-to-ticketing services provider Meituan Dianping and smartphone maker Xiaomi Corp, which raised billions of dollars in their listings, are trading below their IPO prices in Hong Kong.

Maoyan offers ticketing services through its Maoyan and Gewara apps in China – the world's second-largest movie market after the U.S. – and mainly distributes domestic films.

It also helped with the local distribution of the 2017 romantic drama “The Shape of Water,” which won four Oscars, according to its prospectus.

Maoyan's revenue almost doubled in the first nine months of 2018 to 3.1 billion yuan (459.76 million U.S. dollars), the prospectus showed. It has yet to turn in a net profit, but its loss narrowed to 144 million yuan over the same period from 152.1 million yuan a year earlier.

Source(s): Reuters