Weimob

Aug 16, 2022

August 16, 2022 - Advertisement - Shares of Weimob Inc. fell sharply after the Chinese software provider’s first-half net loss widened and revenue declined due to weakness in its merchant-solutions segment. Weimob’s Hong Kong-listed stock fell 12% to HK$3.76 in Tuesday morning trade, heading for its biggest one-day loss since mid-March. Its shares have retreated 52% so far this year. - Advertisement - The company posted a net loss of 608.5 million yuan (US$89.8 million) for the first six months, compared with CNY557.7 million a year earlier, it said in a filing late Monday. Revenue for the period shrank 6.2% to CNY899.6 million, mainly dragged by its merchant solutions business, which recorded a 22% revenue decrease. “Under the impact of the pandemic and macroeconomic [conditions]the advertising budgets of merchants decreased,” Weimob said. Weimob’s revenue growth in the second half may be weighed by pandemic-driven disruptions to the signing of new contracts, Daiwa Capital Markets analysts Candis Chan and John Choi said in a note. But with recovery from earlier lockdowns underway, Weimob’s revenue should grow 10%-20% in the second half, they said. Daiwa also expects Weimob to record a net loss of CNY400 million in the second half, as previously capitalized research and development costs pressure its bottom line, but the analysts said a reduced headcount could help narrow losses. The city’s benchmark Hang Seng Index was recently 0.1% higher. Write to Clarence Leong at [email protected] ,