Chinese startup company Maoyan had quite an inauspicious debut at the Hong Kong stock market. The Beijing-based company's stock price dropped by 1.4 percent during its official debut at the stock market. Despite this unfortunate setback, Maoyan was still able to raise $232 million.
Maoyan Entertainment is widely held as China's biggest movie ticketing app. The company's technology is praised by both the tech and commerce industries. The startup even won the approval of Chinese tech giant Tencent which decided to invest in its operation. Chinese tech giant Tencent is Maoyan's second-largest shareholder.
During its debut at the Hong Kong stock exchange, Maoyan's stock dropped in value by as much as 3 percent. When the market closed, it has a value of HK$14.60 per share. Prior to its debut, Maoyan priced its shares at HK$14.80.
Throughout its Initial Public Offering, Maoyan was able to raise HK$1.82 billion which is around $232 million. The company plans to use all the proceeds in enhancing its current services, as well as investing in research, development, acquisitions, and side investments.
In a statement, Maoyan chief executive officer Zhen Zhihao said, "We are a company that focuses on long-term value creation. We're not worried about short-term market fluctuations."
Maoyan is the latest Chinese tech unicorn to be able to enter the Hong Kong index. Despite have quite a performance in the Chinese trade market, a handful of startups were not able to perform as well during their Hong Kong debut. Two Chinese tech giants, Xiaomi Corporation and Meituan Dianping, are currently trading well below their original IPO prices.
Originally a part of Meituan Dianping's suite of services, Maoyan left the company in 2016, four years after it was founded. The company originally set its Hong Kong IPO debut on Jan. 31. Based on a prospectus released in September, Maoyan's largest shareholder is Beijing Enlight Media which owns about 48.8 percent of the company ahead of its Initial Public Offering. Tencent owned about 16.3 percent of Maoyan, while Meituan Dianping owned about 8.6 percent.
Maoyan has an impressive user base in China. The company reports about 130 million monthly active users during the first half of 2018. Despite this massive user base, Maoyan is still unable to report a positive net income during the first nine months of 2018. The company reported a net loss of 144 million Yuan on revenue of 3.06 billion Yuan.
