Joining a small portion of internet upstarts trading on mainland China’s public markets, SMZDM’s shares skyrocketed almost 44 percent on its first Shenzhen trading day. SMZDM, which stands for “what’s worth buying” in Chinese, is an online shopping guide that many people outside of China are not aware of, according to reports.
The company’s initial public offering (IPO) was priced at 28.42 yuan and started the day at 34.1 yuan. It closed at 40.92 yuan and is valued at roughly $320 million (2.18 billion yuan). Companies generally must have a three-year record of profitability prior to applying for an A-share listing on the main bourses of China. SMZDM had net income of 19.35 million yuan in 2015, 35.16 million yuan in 2016 and 86.24 million yuan in 2017.
The company has raised funds from China Growth Capital – one institutional investor – as of its founding nine years ago. China Growth Capital Managing Partner Wu Haiyan said, according to the report, “For an internet startup to keep attracting talent, it needs to have a transparent corporate structure and an employee stock ownership plan. Of course, going public is another way to raise capital.”
SMZDM started as the blog of Founder Sui Guodong, who reviewed a bevy of gadgets for a hobby. The WordPress site grew into a public platform where guides were shared for all kind of items, ranging from Nikon’s latest lens to baby milk formula. SMZDM receives a commission when a transaction occurs on partnering marketplaces.
In separate news, China is expected to displace the United States in 2019 as the leading retail market around the world. China’s total retail sales are forecast to increase 7.5 percent, hitting $5.636 trillion compared to retail sales in the U.S., which are projected to increase 3.3 percent to $5.529 trillion, per eMarketer’s worldwide retail and eCommerce forecast. That means China’s retail sales are expected to surpass the U.S. in 2019 by more than $100 billion.