Where Are They Now? Chinese 2019 Listings - Part 1

The first in a two-part report on the majority of Chinese ADSs of 2019. Working backward from the most recent listing date, we look at where they were, where they are now, and where they might be headed.

Author: Anna Vodopyanova   

Today, we continue looking at the trading curves of Asia-based companies that chose Wall Street as their listing destination of choice. In this report, we shine a spotlight on the IPOs of the second half of 2019.

Last year was rough, marked by the Trump administration's tariff and tech wars, tightened listing rules, the slowdown in China's economy, and protests that shook up Hong Kong. We are looking at the companies' position in the market, major developments and troubles since going public, and how they had fared during the Covid-19 outbreak. 

Companies by ticker symbol in this report: MKD, OCFT, EH, CAN, KRKR, MOHO, QK, DUO, AIH, DAO, JFU, PLIN, HKIB, WSG, BHAT, and DOYU, starting from the most recent listing. The vast majority of these stocks are currently trading below IPO level.

Dec 30: Molecular Data Inc. (Nasdaq: MKD)

The last company to go public in 2019 hasn't had a good run. MKD set off at $5.38 per share and kicked as high as $11.90 on debut day, December 30, but that was the ceiling. Since, the stock slid as low as 57 cents, the level at which some Chinese ADSs are known to buy their own securities in an attempt to maintain the minimum bid requirement.

As of early June, shares in MKD were trading at $1.70 apiece, with an average trading volume of 15,600. The lock-up period will expire on June 29.

Molecular Data operates an online marketplace for the chemical industry in China. It allows participants to list, buy, sell, and arrange for transportation and warehousing of industrial chemicals. CW columnist Donovan Jones, the creator of VentureDeal, said in his analysis of MKD in December that despite strong GMV growth, the company has yet to show a clear path to profitability.

MKD posted $1.9 billion in revenues for 2019, a 46.3% increase year-over-year. Net loss last year narrowed 25% to $27.5 million, according to a March report. The company missed analyst estimates on both figures. MKD said its GMV, including direct sales and marketplace sales, rose 50.3% from 2018.

Commenting on the impact of the Covid-19 outbreak, Molecular Data's CEO, Zheng Wang, said the supply chain and operations of its facilities were disrupted, but it saw increased online traffic during the period.

Dec 13: OneConnect Financial Tech Co. Ltd. (NYSE: OCFT)

An affiliate of Chinese giant Ping An Insurance, OneConnect completed its IPO on December 13, underwritten by large banks. Together with the additional sale of ADSs for over-allotment, the fintech cloud solutions platform raised $347.2 million, making it the third-largest Chinese listing in New York in 2019. Shares in OCFT were issued at $10 apiece.

After a jagged run that didn't take OCFT shares below $9.02 per share, in mid-May, the stock peaked at the high of $16.94, following better-than-expected first-quarter results.

Backed by SoftBank and SBI Group, OneConnect services all of China's top banks and insurance companies, and is working on a number of international projects. Moreover, it hopes to benefit from Covid-19. The pandemic will lead to the acceleration of digitization and the shift to cloud solutions for financial institutions, said Ye Wangchun, the chairman and chief executive officer of OneConnect, in a commentary.

Prior to the Sino-U.S. trade war campaign, Trump has launched in 2018, OneConnect sought to raise $3 billion in its listing. Even with the downsized IPO, its valuation came close to $4 billion in December, according to The Economist. The medium also said in a recent article that Shenzhen-based OCFT runs a research center in the U.S. and is "rewelding the pipes channeling money in the developing world."

Dec 12: EHang Holdings Ltd. (Nasdaq: EH)

The maker of autonomous aircraft had a solid run so far. Issued at $12.50 per American depositary share, EH stock has averaged just under the IPO level, now trading at $11.92. It dipped as low as $7.84 per share and peaked at $16.24, but overall, it is a long-term investment, as any technology of the future would be.

Over the past few months, the company has received permits and tested its flagship product, all-electric two-seater EHang 216, in a number of overseas sites, including its North Carolina flight in January.

Overall, the company has completed more than 2,000 trial flights in China, Austria, the UAE, the Netherlands, Qatar, and the United States. It has also received operational permits in Norway and Spain. At its home base in Guangzhou, EHang is also working with the authorities to set up a low-altitude aviation transport network to shuttle passengers and cargo.

Ehang raised $40 million in IPO to boost R&D and expand production. For the full year 2019, EHang reported $17.5 million in revenues, up 83% percent from 2018, on net loss of $6.9 million, down 40%. It also said it expects revenue growth of at least 200% in 2020.

A 2019 research report by Markets and Markets forecasted a CAGR of 17% for the global autonomous aircraft market from 2018 to 2030, reaching $23.7 billion. A longer-term estimate by Morgan Stanley projects the global UAM industry to reach $1.5 trillion by 2040.

EHang's chief financial officer, Richard Liu, told CapitalWatch in an April interview that the company was the first to reach commercialization in the urban air mobility market. Last year, EHang sold 61 AAVs to customers around the globe.

Nov 21: Canaan Inc. (Nasdaq: CAN)

Since its November IPO, worth $90 million, Canaan has made strides in accomplishing new projects, despite the setbacks caused by the coronavirus.

Canaan began as a manufacturer of Bitcoin mining machines in 2013, but it has become more than that, expanding into ASICs development and artificial intelligence solutions. Earlier this year, the company participated in the 2020 International Consumer Electronics Show in Las Vegas, showcasing its Kendryte 210 – the world's first-ever RISC-V-based edge AI chip designed to carry out machine learning. In a recent announcement, Canaan said it has developed a SaaS product which its partners can use to operate a cloud mining platform. 

The supercomputing company sold 10 million ADSs at $9 apiece, but it has been trading below IPO level since, weighed by investigations that a number of U.S. investors' rights litigators have launched. Law firms including The Law Offices of Vincent Wong alleged that Canaan called related-party deals as "strategic cooperation," issued misleading statements on its financial health, and prior to IPO removed "numerous distributors from its website, many of which were small or suspicious businesses."

For the full year 2019, Canaan posted revenues of $204.3 million on losses of $148.6 million. It sold 10.5 million TH/s in supercomputing power last year, up from 7.2 million TH/s in 2018. 

As of early June, CAN shares were trading at $2.49 apiece.

Nov 8: 36Kr Holdings Inc. (Nasdaq: KRKR)

Tech and business content platform 36Kr raised $20.3 million in early November amid high market volatility. It sold 1.4 million ADSs at $14.50 apiece and after debut never reached that level again, dropping below $9 in a matter of a few days. Since, it's been a downward slide for KRKR, until in early May, after kicking off a share buyback plan, it did turn upward and rose from $3.50 to $4.95 per share.

The company said it will repurchase up to 1 million of its ADSs. Also, 36Kr vowed that its executive officers and certain employees will not sell stock in the company for an additional 180 days after the lock-up period expires.

Founded in 2010, 36Kr offers enterprise services for new economy players in China and operates a content platform. For 2019, 36Kr posted revenues that have more than doubled year-over-year to $94.2 million. Net loss was $3.7 million in contrast to net income of $5.7 million in 2018.

KRKR reported first-quarter results on May 26. The results were enough to move to stock up to over $6 per share. Enterprise value-added services revenues increased by 3.4% to $6 million in the first quarter of 2020. Net loss attributable to 36Kr's ordinary shareholders was 95.4 million yuan ($13.5 million) compared with 130 million yuan in the same period of 2019.

Nov 8: Ecmoho Ltd. (Nasdaq: MOHO)

This stock is now trading at a third of its issue price. The retailer of non-medical health and wellness products sold $44 million worth of $10 ADSs on Nov. 8 and since then announced a slew of new projects and partnerships, but they haven't helped its stock – at least not in the short term.

In late March, MOHO stock did soar to the peak of $11.51 per share, but after its financial report on March 30 showed decreased income, MOHO fell below $6. In mid-May, Ecmoho was trading near $3.55 per ADS.

For 2019, Ecmoho reported year-over-year revenue growth of up to 66% to $330 million and said net income was between $3.1 million and $3.7 million (unaudited), representing a drop of up to 49% from 2018. As of Dec. 31, MOHO served 8.2 million cumulative paying consumers, according to its report. The company withdrew its earlier guidance for 2020 and has yet to file its audited annual report, using the relief provided by the U.S. SEC to companies impacted by Covid-19.

Nov 5: Q&K International Group Ltd. (Nasdaq: QK)

Q&K celebrated its $45.9 million listings in November, with shares priced at $17 apiece. After the initial uptrend to the ceiling of $20.44, since early January, its stock has been trading nearly flat at $12 per ADS, with some brief drops, and an average volume of 576 shares. It is one of several trade-by-appointment Chinese stocks whose public presence is apparently either just to show Chinese investors it is legitimate, or a way to get money out of China, probably both. This is a recurring theme with Chinese U.S.-listed stocks.    

The company operates in the Yangtze mega-city cluster centered around Shanghai and aims to provide affordable long-term co-living rental, focusing on the pricing segment of under 2,000 yuan (about $280), according to a CW interview with Jackie Qiang You, the former chief strategy officer and senior vice president of Q&K. You also said that Q&K has been growing despite the economic slowdown in China – and attributed it to the affordability factor. She resigned from the company early this month.

For the fiscal year 2019, which for Q&K ends on Sep. 30, the company reported $172.6 million, up 39% year-over-year, on losses of $69.7 million. The company has yet to report the financials for the subsequent two quarters.

Other than that, Q&K hasn't made much news or commented on the Covid-19 impact. Meanwhile, China's real estate was among the hardest-hit sectors during the outbreak as many workers lost their pay and fell behind on housing payments.

Nov 1: Fangdd Network Group Ltd. (Nasdaq: DUO)

China's top real estate marketplace raised $78 million for ADSs priced at $13 each. DUO stock remained strong until mid-February, thanks to impressive financials and expansion into parking space sales. However, when it became apparent that China's real estate is suffering from the pandemic, DUO shifted lower, dipping as low as $5.66 at some point, though staying mostly around the $10-level.

Fangdd aims to provide all the resources needed to carry out a property transaction. These include a user-friendly platform for managing customers, matchmaking algorithms, providing capital and transaction data, as well as other SaaS-based solutions tailored to serve the specific needs of real estate professionals. Fangdd also operates China's largest property listings database.

For the full year 2019, the property technology company reported revenues of $517 million, a 58% increase from 2018. Net loss was $73.3 million. This year, Fangdd expects to see revenue growth of between 40% and 45%.

During the first quarter, DUO opened its online solutions and training to real estate agents for free during the coronavirus crisis that significantly affected property sales.

In March, Fangdd appointed a new chief financial officer and added a co-chief executive officer, both of whom have been with the company from the get-go.

Oct. 25: Aesthetic Medical International Holdings Group Ltd. (Nasdaq: AIH)

This plastic surgery company had a choppy run after its October IPO worth $30 million. From issue price of $12 per share, AIH barely rose – to $12.56 – and dipped as low $6.03 in the months that followed. As of early June, AIH stock was trading at $7.59 per ADS.

AIH said it was the third-largest private plastic surgery provider in China in 2018, citing third party market research. As its core strategy, AIH acquires and integrates clinics and the majority of its IPO funds were intended for this purpose, according to the prospectus. In late December, Aesthetic Medical announced the opening of two new locations, which grew its network to 23 hospitals covering 17 cities in China, as well as Hong Kong and Singapore. In early April, AIH reported plans to acquire a majority interest in two additional aesthetic medical service providers, one in Shanghai and another in Xi'an.

In 2019, AIH reported a 43% increase in active customers and performed 536,469 treatments. Of all clients, 53.8% repeated customers, it said. Revenue was $124.8 million, a 14.2% jump from 2018, while income was $19.9 million in contrast to losses in the preceding year.

Commenting on the Covid-19 impact, AIH said it expects the pandemic will negatively impact its cash flow. It added, "Given our current credit status and the current availability of capital, we believe that we will not encounter any major difficulties in obtaining additional bank borrowings." In the first quarter, AIH said it expects to see revenue drop 50% from a year ago.

Oct 25: Youdao Inc. (Nasdaq: DAO)

This stock stands in stark contrast to most 2019 Chinese IPOs. Today, DAO trades near $24 per ADS – a 41% jump from its issue price of $17.

The Chinese e-learning platform, a subsidiary of gaming giant NetEase Inc. (Nasdaq: NTES), raised $95.2 million in a late October deal secured by big banks. And those investors who went bearish early on in light of the trade war and market volatility are biting their fingernails now.

In fact, Youdao was among the few companies who enjoyed an incline in the first quarter, when Chinese schools closed for quarantine, and students turned to online education. Last week, Youdao posted $76.5 million in revenue for the three months through March, an increase of 140% year-over-year. For the full year 2019, DAO reported doubled revenue of $122.4 million and net loss of $91.6 million. NetEase has also launched a $20 million share repurchase plan for Youdao.

However, CW columnist Chiu-Ti Jansen, founder of China Happenings, poses this question in her April column: as China is returning to its former self, will the subscribers remain hooked to virtual classrooms?

Aug 15: 9F Inc. (Nasdaq: JFU)

The digital financial account platform raised $85 million in its mid-August IPO, priced at $9.50 per ADS. After trading above $11 for the first few months, 9F's earnings report in early December sent its stock back to issue price. Strangely, JFU managed to maintain the level of $9.10 to $9.60 for four months, unphased by the Covid-19 outbreak, and only taking a dip after the lock-up period expired.

In early April, 9F filed for an extension to submit its 2019 annual report on the basis of the Covid-19 disruptions, which has worried some investors. In a significant drop, JFU stock is trading as of early June at near $6.34 per share.

9F operates in the scandal-plagued sector that has been shaken up over recent years – peer-to-peer lending. The industry boomed before Beijing implemented regulatory changes following the repeated surfacing of financial fraud. From 2015 to October 2019, the number of P2P lenders declined from 6,000 to 427, according to the China Banking and Insurance Regulatory Commission (CBIRC). The remaining firms have been transitioning to institutional funding, and JFU was among them. 9F's platform, One Card, aims to provide various wealth management and consumer services in addition to facilitating consumer loans. In the third quarter of 2019, 9F said 78.6% of the loans it facilitated were funded by financial institutions. It served 1.4 million active borrowers during the trimester.

The company has until June 14 to file its annual financials.

Aug 14: China Xiangtai Food Co. Ltd. (Nasdaq: PLIN)

This pork processing company set off in public trading at $5 per share and raised $5.9 million in August. That was a third of its initial IPO target.

China's pig market is an appealing one. In a recent article, Bloomberg reported that even real estate companies are turning to the development of pig farms, in part aiming to recover quicker from the Covid-19. The country is the world's largest consumer of pork, though its farms are periodically shaken up by epidemics, the latest of which – an African swine fever in 2018, which killed about 60% of Chinese pigs – led to massive shipments of U.S. pork to the mainland.

Perhaps the demand for the product helped PLIN stock decline slower than it could have. From August to late January, China Xiangtai's shares traded in the range of $3.72 to $6 per share. However, the outbreak, which shut down processing facilities sent PLIN on a drastic dive to as low as $1.11 per share. As of early June, PLIN inched slightly higher, to $1.50 per share.

Aug 5: AMTD International Inc. (NYSE: HKIB; SGX: HKB)

The Hong Kong investment banking firm raised $174 million in a successful early August IPO. It sold 20.8 million ADSs at $8.38 each and is today trading near $6.50 per share. Further, in December, HKIB carried out a private placement of shares in the amount of $100 million and issued three-year bonds worth $15 million.

HKIB is a subsidiary of financial services giant AMTD Group, founded by the multinational conglomerate CK Hutchison. The Group recently unveiled plans to spin off AMTD Digital, which includes "virtual banking, insurance broking, digital asset exchange and payment systems" and has smartphone giant Xiaomi Corp. (HKEX: 1810) as its partner.

In early May, HKIB announced a long-term partnership with the Singapore Exchange (SGX) in aim to develop Singapore's capital markets and expand its global presence. 

For 2019, HKIB reported its revenue grew 67% to $154.6 million in revenue, and its profit reached $106.7 million.

July 26: Wanda Sports Group Co. Ltd. (Nasdaq: WSG)

This company raised $190 million in a downsized IPO on July 26 and was hit with lawsuits after its first earnings report. Earlier this month, WSG announced that one class action complaint against it has been "voluntarily dismissed in its entirety, without prejudice, by the lead plaintiff." WSG came out undamaged in this case, less the fiscal costs. This story could have read differently if published just two weeks earlier.

However, legal troubles continue for WSG, as another investigation "over alleged violations of Federal Securities Laws" and "possible breaches of fiduciary duties by certain officers and directors" in connection with the IPO is ongoing, according to a recent post on SBWire.

An affiliate of Chinese conglomerate Dalian Wanda Group, WSG owns Europe's Infront agency, as well as WEH in Tampa, and WSC in Beijing, and hosts sports events and provides related services. Like Dalian Wanda's movie theater giant, AMC Entertainment (NYSE: AMC) that is now facing defaults, WSG was strongly hit by the Covid-19 pandemic – it may take a long time to resume mass participation in the entertainment sector. WSG is, however, raising some cash in the sale of the Ironman Group to private firm Advance, expected to close in the second quarter.

Wanda Sports recently reported $1.1 billion in revenues for 2019, a 9% year-over-year drop, and losses of $307.4 million. It attributed the losses to a goodwill impairment loss at the Ironman Group of $285.5 million relating to its North America and Oceania cash-generating units, as well as to share-based compensation.

WSG sold 23.8 million shares at $8 apiece in IPO. It is now trading near $2.56 per ADS.

July 26: Blue Hat Interactive Entertainment (Nasdaq: BHAT)

This was a small, $8 million IPO, for the AR toys and product developer. BHAT sold shares at $4 apiece and took a downward curve to below the required minimum, today at $1.32 per share. The company received one warning from the stock exchange in early January, changed auditor, and regained compliance, then got another notice in mid-April. Now, it has until Dec. 28 to adhere to standards since the Nasdaq has pushed forward the compliance periods to July 1.

Since its listing, Blue Hat has unveiled a number of new products, including various smart screen immersive classes and a smart glowstick, AR Glow. The company said, "When viewed using the accompanying mobile app developed by Blue Hat, the unicorn character on the glowstick will come to life with enhanced AR animation. The product also features sound recognition technology which will lead to a variety of different AR-enabled responses from the character. Users are able to record videos of their interactions with AR Glow to be shared on social media platforms."

BHAT sells some of its products globally and hopes to grow in the United States. It has also signed an intent of acquisition of Chinese mobile games developer Fuzhou Csfctech Co. Ltd., though it has yet to announce the closing of the deal.

For 2019, BHAT posted 29% year-over-year revenue growth to $23.8 million and net income of $9.1 million, up 15% from 2018.

July 17: DouYu International Holdings Ltd. (Nasdaq: DOYU)

China's largest game live-streaming platform DouYu was the biggest IPO of 2019. It raised a massive $775 million worth of ADSs at $11.50 each in a plain debut on July 17 and since then had barely exceeded the issue price.

The company had a choppy run, weighed by regulatory scrutiny for collecting users' personal information without permission and slower-than-expected growth.

In addition, more than 10 U.S. law firms are pursuing a class action against the giant on allegations it failed to disclose certain aspects of its business in IPO filings and thus misled shareholders.

Litigators, among which are Bronstein, Gewirtz & Grossman LLC, Pomerantz LLP, The Schall Law Firm, and Robbins LLP, are claiming the following: "(1) DouYu's risks related to its top streamers had materialized, including that: (a) a top streamer was actively misrepresenting herself on DouYu's platform, and (b) the costs associated with retaining top streamers was swelling; (2) DouYu did not ensure that all of its products were fully compliant with current regulatory requirements before those products became available online; and (3) key interactive features of DouYu's "lucky draw" were noncompliant with current regulatory requirements, requiring DouYu to remove them from operations, which negatively impacted user engagement activity and caused disappointing financial results."

For 2019, DouYu reaped revenues of $1 billion, double from 2018, on net income of $4.8 million, or 2 cents per share, in contrast to 2018 losses of about $123.4 million.

Chinese conglomerate Tencent Holdings (HKEX: 0700) holds a controlling stake in DouYu. The giant has also backed DouYu's rival, Huya (Nasdaq: HUYA), and last month increased its stake to at least 50.1%, buying from Huya's parent, social media platform JOYY (Nasdaq: YY). Tencent has placed directors on the companies' boards and established streaming rules, and while they continue to operate independently, The Esports Observer said in March that the giant might be planning a merger of the platforms. Tencent also operates its own game live-streaming platforms, Penguin Esports and eGame, a video live-streaming platform Kuaishou, and holds a stake in Bilibili (Nasdaq: BILI), an interactive anime and game videos streamer.

China is the world's biggest game market and both DouYu and Huya have surpassed Amazon's Twitch in the number of monthly users by the year-end.

The company released its first-quarter earnings on May 26.  Net revenue increased by 53% year over year to RMB 2.28 billion. Gross profit increased by 139.2% year over year to RMB 485.9 million, while gross margin expanded to 21.3%. Meanwhile, net income was RMB 254.5 million, representing a net margin of 11.2%. Adjusted net income grew to RMB 296.9 million, representing an adjusted net margin of 13%.

As of early June, DOYU stock was trading around $9 per share, 33% below its ceiling of $11.88 per ADS and $2 above the 52-week low of $6.11.


This was part one of the two-part overview covering 2019 Chinese listings in New York working backward from the most recent listing date. Today, the continued listing status of some of these companies is uncertain as Wall Street is moving to act against the lack of accounting transparency from Chinese firms and toward increased protection of the U.S. investor. In the context of increased Sino-American tensions, things could get ugly for the companies and their investors. The next stop for many of these companies will be Hong Kong where they will most likely be welcomed--at first, anyway. 


For some highlights on the 2020 IPOs, check out our story from May 2.

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