Dmall Completes CSRC Registration for Hong Kong IPO, Chinese Digital Retail Service Provider
Supported by Tencent Holdings and Lenovo Group, Dmall is a digital retail services provider who has finished registering with China’s securities regulator for an overseas initial public offer (IPO), therefore opening the path for a stock sale in Hong Kong. For the Shenzhen-based business, this represents a big turning point since it wants to use the capital markets for more growth.
Friday the material was revealed on the website of the China Securities Regulatory Commission (CSRC). Dmall intends to market up to 86 million Hong Kong shares. Should the company fail to complete the listing within 12 months, the CSRC states it will have to re-register. Dmall had formerly applied for listings on the Hong Kong Stock Exchange in 2023 and 2022. From this IPO, insiders project Dmall might generate about US$500 million.
Following a recovery in equities and a pledge by the CSRC to support foreign listings by Chinese companies, Dmall is the most recent mainland-based company to profit on the higher demand for new shares on Asia’s fourth-largest stock market. Though progress has since somewhat slowed, the benchmark Hang Seng Index entered a bull market in May.
Established in 2015 by Zhang Wenzhong, who also runs the supermarket operator Wumart, Dmall focuses in the digital transformation of physical stores, hence improving operational efficiency and consumer experience. Currently using the company’s technologies are more than 600 customers, including well-known companies like Metro and Lawson. For example, Dmall’s system lets consumers easily scan a QR code to trace supply-chain trip of fresh vegetables including live fish and sustainability indicators.
Dmall grew into Hong Kong in 2020 under DFI Retail Group—formerly Dairy Farm Holdings—as a major client. Self-service machines installed in DFI’s Wellcome and Market Place grocery chains—which have gained popularity among local customers—have been made possible in great part by Dmall’s technologies. Last year, Dmall built its headquarters at Hong Kong’s Cyberport business park.
Marcus Spurrell, CEO of Dmall, said in an interview with the Post’s Morning Studio in January that “when our founder started the company in 2015, he envisioned it becoming a global enterprise spreading its technology outside China.” “Thanks to its free-trade policies, open culture, and legal system, Hong Kong is the perfect starting point for us not only in Asia but also worldwide.”
The IPO is supposed to enable Dmall increase its profile outside of Asia. From individual markets including Hong Kong, Macau, Cambodia, and Singapore, the company already makes yearly profits beyond 100 million yuan (US$13.75 million). Dmall is also apparently in talks with numerous big European stores.
Dmall is still hopeful about its future even though last year it posted a loss of 655 million yuan and Wumart and its associates provide most of its revenue. Most likely, the IPO money will support more development and global expansion.
Six businesses are scheduled to begin trading in Hong Kong this week, the busiest week since December and a sign of fundraising activity recovering. Data provided by the London Stock Exchange Group shows, however, capital raised via IPOs in Hong Kong fell to a two-decade low of US$1.5 billion in the first half of this year.
Shayne Heffernan
