Chinese selfie apps developer Meitu has made its debut on the Hong Kong Stock Exchange in the biggest tech IPO there in almost a decade. But because of the US Fed's rate hike decision, investors were cautious.
China's popular selfie app developer Meitu made a muted debut on the Hong Kong Stock Exchange on Thursday in the biggest initial public offering by a technology company since 2007 when Alibaba was listed.
Boasting 456 million users, Xiamen-based Meitu targets teenagers and young adults, who use the beautifying app to retouch selfie photos for everything from posts on social media to job applications.
The app enables users to smooth and change the color of their complexions, widen their eyes and slim themselves down.
Fed spoiling the party?
The Meitu listing raised $629 million (599 million euros), with the company now having a valuation of roughly $4.6 billion.
Market sentiment was dampened, though, by the US Fed's decision to hike interest rates. "For a lot of institutional investors, I think they want to follow this stock because it's one of a kind in the market," Hong Kong-based analyst Jackson Wong said in a statement. "But the profitability of the stock is not foreseeable right now."
In the long run, Meitu is hoping to take advantage of the recently launched Hong Kong-Shenzhen link that improves access to stocks for mainland investors and allows foreigners to buy shares in more than 800 Chinese firms for the first time.
But there are quotas to observe and restrictions to heed, including that the stocks have to be listed on key indexes, Bloomberg notes.
hg/jd (AFP, Bloomberg)