The ranks of Chinese Internet companies that have turned away from U.S. stock markets to domestic A shares gained another member on Monday as a leading female health service provider, the Xiamen Meet You Information Technology Co, said it abandoned its IPO plans in the U.S. and will instead seek a listing in China.
"Apparently, the company thinks that the domestic stock market will attach more value to its business model and concepts," Liu Dingding, a senior industry commentator, told the Global Times on Monday.
Established in April 2013, the company started off by running an app that provides menstruation management services, such as by letting users record their period cycle.
The app was first called "See You" and then was changed to "Meet You" in October 2013.
According to a report by tech.qq.com on Monday, Meet You had planned to conduct an IPO in the U.S. in the first half of 2016.
But considering that its business and clients are all based in China, and that it started to generate profits, management decided instead to opt for the A-share -market.
CEO Chen Fangyi said in an internal e-mail that Meet You made a profit of more than 10 million yuan ($1.51 million) in the second quarter of 2016, according to a report by pedaily.cn on Friday.
Revenue mainly comes from -e-commerce and advertising, Chen revealed.
Meet You couldn't be reached for comment as of press time.
"Currently, the valuation of Internet companies on the U.S. stock market is usually lower than that of those listed on the A-share market, which is prompting companies such as Meet You to choose the domestic capital market," Liu said.
A number of Internet companies, such as Baofeng Group Co, have shifted from the U.S. to the A-share market.
Liu Xuwei, an Internet industry analyst, told the Global Times on Monday that U.S. investors are usually not familiar with Chinese companies and tend to assess them based on similar U.S. companies.
However, Chinese and U.S. companies are quite different such as in their development pattern.
Liu Dingding said that it's wise for Meet You to choose the A-share market. "Nowadays, the Chinese government's support for Internet companies is way higher than that of the U.S. government," he noted.
"With the favorable policies, Meet You is sure to get a much higher valuation if it's listed on the domestic market instead of on the U.S. market," said he.
He also said that Meet You's business is in line with the government's call for consumption upgrading.
The company has expanded its service area by launching products other than "Meet You" such as "Youzijie," which specializes in female e-commerce.
Meet You had more than 100 million users and 5 million daily active users as of the end of July 2015, according to a statement on the company's website.
