Truck-sharing IPO gets high on fumes

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Container trucks leave the Yangshan Deep Water Port, part of the Shanghai Free Trade Zone, south of Shanghai November 29, 2013. The free-trade zone officially opened for business on September 29, 2013. REUTERS/Carlos Barria

MELBOURNE, June 23 (Reuters Breakingviews) – SoftBank (9984.T) and Tencent-backed 0700.HK Manbang (YMM.N) appears to have aced its stock market driving test read more . The Chinese truck-sharing firm’s shares ended their first day on the New York Stock Exchange 13% higher than where underwriters Morgan Stanley, CICC and Goldman Sachs priced the deal. That’s right in the sweet spot, giving investors a nice little boost without leaving the company’s executives feeling they sold on the cheap.

Trouble is, it means Manbang – or Full Truck Alliance, as it’s also called – now trades at some 550 times last year’s earnings. Yet it’s only converting around 1.5% of the business it books into revenue – known as the take rate. Car ride-sharing giant Uber manages 22%. And Manbang faces regulatory and competitive pressure , too. Without sudden, explosive growth, it’ll start to look like it’s running on fumes. (By Antony Currie)

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