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[Geduld]

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Artikel:

New Listings: Hongkong.com Blames Investors` Misconceptions For Low Share Price

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Geduld ([e-mail])

[Aendruh]

New Listings: Hongkong.com Blames Investors` Misconceptions For Low Share Price





Hong Kong, March 19 /SHfn/ --

Hongkong.com [8006] has seen its share price fall 65.1 percent from a high of $9.10, reached on its first day of trading on the GEM board. However, the company believes it is the victim of investor misconception.

Since closing its first day of trading on the GEM board on March 9 up 259 percent, hongkong.com [8006], has steadily fallen, and finished trading on Friday at $3.175: A drop of 65.1 percent from its first day high of $9.10.

However, chief executive, Rudy Chan believes the company is the victim of a number of misconceptions by investors, which have lead to a share price that does not reflect the company`s true value.

He said: "It [the share price] is above our IPO price, so to me I`m happy with it. But it doesn`t reflect our true value."

Chan points to a number of factors as contributing to the problem.

Firstly, he said the market was not taking into consideration the company`s activities since its IPO. These include taking a 30 percent stake in InfoisLive.com, a local WAP (Wireless Application Protocol) technology provider. InfoisLive.com has already signed up five of Hong Kong`s six mobile operators to use 5390.com, its flagship application.

Under the deal, the two companies will also develop a hongkong.com portal for use on WAP based mobile phones.

Hongkong.com has also made a number of senior management appointments, including new vice presidents for e-commerce and marketing.

Chan said: "The market has not properly reflected what we`ve done so far."

Also, Chan says investors are miscalculating when comparing hongkong.com`s market value to its parent Chinadotcom [CHINA]. He explained, investors were not taking into consideration a December stock split by the parent company. As a result, they were multiplying its share price by 20 million shares instead of 40 million.

Chinadotcom closed trading on Friday with a market cap of US$2.3 billion (HK$18.3 billion), meanwhile, hongkong.com finished Friday trading with a market cap of HK$12.7 billion. However, Chan said as Chinadotcom held 85 percent of hongkong.com, the figures had led some investors to feel hongkong.com was overvalued.

Meanwhile, last week investor concerns over the Taiwanese presidential elections were conspiring to drag the rest of the market down, with technology stocks feeling the brunt of the selling.

The sell-off was added to be a general move away from tech stocks, lead by falls in Japanese Internet stocks.

According to Bethany Chan, director of Internet and IT research at Warburg Dillon Read, the general slump in Internet stocks was the primary factor in hongkong.com`s fall.

However, according to Chan hongkong.com has also been a victim of misunderstandings about its business nature. He said people thought the company was limited to Hong Kong.

However, he said they had plans to establish versions of their site targeting Chinese communities worldwide. For instance, there could soon be London, Vancouver and Sydney versions of the site.

The company is planning on using the proceeds from its listing to expand into electronic commerce businesses. Chan said they would do this by banking on the Hong Kong brand name.

He explained, Hong Kong was famous for shopping, and they planned to offer Hong Kong goods to the world through their network of sites.

Meanwhile, Peter Hamilton, Chindotcom`s chief operating officer said they were pleased with the listing, and would not rule out listing the company`s other businesses, such as the 24/7 Asia advertising network, which is a joint venture with 24/7 Media (TFSM) of the US.