Good Doctor Plunges Below IPO Price Range in Shock for Investors

(Bloomberg) -- Investors couldn't get enough of Ping An Healthcare & Technology Co.'s initial public offering. Now they can't get out fast enough.

The company, also known as Good Doctor, fell as much as 11 percent to trade below the low end of the range offered to investors in the share sale, before paring losses to 3.7 percent at the close in Hong Kong. The stock, which drew $47.5 billion of retail money for a $1.1 billion IPO, closed unchanged on Friday in the worst first-day performance by a technology company on the city's main board in almost four years.

Investors are dumping their shares after the company struggled to live up to the hype despite the retail portion being 653 times oversubscribed. The share sale valued the firm at about 6 times projected 2020 sales, compared with 5.1 times for Internet giant Tencent Holdings Ltd. and 5.4 times for U.S. telehealth provider Teladoc, according to Bloomberg Intelligence.

The flop has weighed on the broader market, with the Hang Seng Index trading near its lowest level in a month. Other recent listings have also fared badly this year -- shares of Razer Inc., Yixin Group Ltd., China Literature Ltd. and ZhongAn Online P&C Insurance Co. are all down at least 40 percent from their post-IPO peaks.

Investors “see a low chance for this stock to perform in short term,” said Steven Leung, an executive director of UOB Kay Hian (Hong Kong) Ltd. “The overall market sentiment is very weak.”

The dismal performances may cast a shadow on Xiaomi Corp., which is planning what may be the world's biggest IPO since 2014 in Hong Kong.

--With assistance from Moxy Ying

To contact the reporter on this story: Sofia Horta e Costa in Hong Kong at shortaecosta@bloomberg.net.

To contact the editor responsible for this story: Richard Frost at rfrost4@bloomberg.net.

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