China tech down but not out

Chinese technology firms are suffering from a shift in sentiment. Even Cheetah Mobile, a spin-off from popular Chinese software developer Kingsoft, had to rely on support from shareholders Xiaomi and Baidu to get its initial public offering over the line earlier this month.

It wasn’t supposed to be like that. Hong Kong-listed Kingsoft chose to spin off Cheetah in New York as a way to join the party that other US-listed Chinese tech firms have enjoyed over the past few years — rich valuations and abundant liquidity.

Cheetah managed to price its IPO close to the top of its targeted range but even the help of friends and family hasn’t stopped its share price from falling since then. A cyclical shift that has affected all of China’s US-listed technology companies is to blame, according to some analysts and bankers.

"We’re seeing a fairly significant correction out of high multiple, high growth stocks into more value-driven stocks,” said Joaquin Rodriguez Torres, head of technology, media and telecom investment banking for Asia at Deutsche Bank, in an interview with FinanceAsia.