By Kimberley Kao

Alibaba-backed cloud company Qiniu shares plunged in its Hong Kong debut, as sentiment in Chinese equity markets soften amid disappointment over the lack of details about Beijing's measures to support the economy.

Shares of the Shanghai, China-based company fell as much as 58% early Wednesday to 1.14 Hong Kong dollars, compared with their offering price of HK$2.75.

Qiniu, an audiovisual cloud service company, raised 439.3 million Hong Kong dollars, equivalent to US$56.6 million, in gross proceeds from its initial public offering. It sold 159.75 million shares with the offering price set at the lower end of its guided range. This compared with appliance giant Midea's US$4 billion debut in September, Hong Kong's biggest listing this year.

Taobao China, a unit of Alibaba Group, is a substantial shareholder with around 16% of shares.

The company didn't report a net profit in 2023 as it focused on "business expansion over short-term profitability," it said. Revenue in 2023 increased 16% to 1.15 billion yuan, or US$161.5 million, primarily driven by its application platform as a service solutions.

Qiniu's sharp decline comes amid softer sentiment in Chinese markets. Stocks had surged last week amid high expectations for a flood of Chinese government stimulus to bolster the economy, only to tumble as officials haven't revealed any details on the scale and scope of government measures in recent press conferences.

Hong Kong, which hosts some of the world's biggest names and brands including Alibaba and Tencent, has witnessed lackluster listing activity in recent years due to a weak Chinese economy and U.S.-China trade tensions that halted many foreign listings.

Write to Kimberley Kao at kimberley.kao@wsj.com

(END) Dow Jones Newswires

October 15, 2024 23:09 ET (03:09 GMT)

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