Weekend’s Biggest Losers: Didi Global, RLX Technology, & Orphazyme A/S
Didi Global halts plan to list in Hong Kong exchange
Didi Global Inc. (NYSE: DIDI) lost 44.08% over the weekend after suspending planned stock listing in the Hong Kong stock exchange. According to Bloomberg, the company and its bankers halted plans on the listing after failing to meet Chinese regulators’ conditions requiring an overhaul of its system to prevent data and security leaks. People familiar with the matter stated that the listing was to take place this summer.
In December last year, the company indicated that it was planning to delist its stock in New York months after it went public. DIDI had gone public in June, raising $4.4 billion through the IPO, which was one of the largest IPOs. Also, Chinese authorities commenced a probe on the company for violation of national security and data privacy laws. A few weeks after, government agencies raided DIDI’s headquarters for a cybersecurity evaluation.
RLX Technology dips as regulatory uncertainty in China lingers
RLX Technology Inc. (NYSEL RLX) lost 36.32% over the weekend after the Chinese vaping firm announced its Q4 earnings, with wider selloff tech players weighing on the stock. Also, the current uncertainty regarding vaping regulations in China and concerns regarding Chinese stock could have triggered the selloff.
The company had solid quarterly results, with revenue increasing 18% to $298.8 million. However, gross margin dropped to 40.2% from 42.9% because of the increase in promotional costs such as markdowns and increasing inventory writedown allowance. Adjusted net income grew 28% to $48.2 million or $0.06 per share.
Kate Wang, RLX Technology’s CEO, said that they are delighted with the financial and operational performance in Q4 2021. She added that despite changing industry regulatory framework and the demanding backdrop of COVID-19, the company performed well. It optimized retail and distribution channels and invested in research, new products, and digitalization upgrades.
Orphazyme seeks in-court restructuring
Orphazyme A/S (NASDAQ: ORPH) was down 45.75% as the company sought in-court restructuring. The company announced last week that following the receipt of a negative Trend Vote as per February 23, 2022, announces and considering its financial position, its Board of Directors had elected to file an in-court restructuring petition of Orphazyme. Also, as part of these restructuring efforts, the company plans to reduce around 50% of its global workforce.
The goal of the restructuring is for the company to consider if it can establish a basis that allows for part or all of its operations to go on that include the foundation for injecting additional capital or selling part of its assets. Recently, the company shut its operations in Germany, the US, and the UK to cut costs. Orphazyme is planning to commence discussions in Denmark under the Danish Act of Collective Redundancies and the Act on Information and Consultation.