Hong Kong is finally opening the door for digital retail pharmacy Dingdang Health Technology Group Ltd., approving the company’s IPO at a listing hearing after rejecting its first attempt last year. But investors may be less welcoming of the company, whose Chinese name sounds like a doorbell ringing to emphasize the speedy deliveries that are also driving up its costs.
Following its failed application last year, Dingdang Health filed for an IPO again in March and passed its listing hearings in the middle of this month. It has enlisted CICC and CMB International Capital Corp. as the deal’s co-sponsors with the aim of getting listed by September. But the company is apparently tempering its expectations with a relatively modest goal of raising up to $100 million – just a tenth of what the market was expecting during frothier times last year.
According to its preliminary prospectus, Dingdang ranked third in the industry last year, trailing only rivals JD Health (6618.HK) and Alibaba Health (0241.HK), which are both backed by China’s top two e-commerce companies. But the company is quite distant in its third-place position with only 1% of the market, far behind the 10% and 6.5%, respectively, for the other two.