E-commerce operator PChomestore Inc (商店街) has seen its book value nosedive to minus-NT$25.3 per common share after losses last quarter worsened to NT$928 million (US$31.05 million) due to massive shipping subsidies.
The company’s book value was NT$1.64 per share on Dec. 31 last year.
The figure translated into losses per share of NT$26.94, its biggest quarterly losses in five quarters, the company said in a filing with the Taiwan Stock Exchange yesterday.
The quarterly losses were about 2.7 times bigger than PChomestore’s share capital of NT$344 million.
In order to match rival Shopee Taiwan Co (樂購蝦皮), which offers free shipping on every transaction, to stem a loss of market share, PChomestore’s marketing expenses skyrocketed to NT$938 million in the first quarter, compared with NT$40.56 million in the same period last year.
Last quarter’s losses widened significantly from losses of NT$6.39 million in the same period last year and from losses of NT$694 million in the fourth quarter of last year.
However, PChomestore said its gross merchandise value surged sixfold annually to an all-time high of NT$12 billion in the first three months of this year.
PChomestore’s weak quarterly performance has begun to drag on parent PChome Online Inc (網路家庭), which reported losses of NT$472 million for last quarter, compared with net profit of NT$204 million in the same period last year.
PChome Online attributed the losses to a significant increase in operating expenses to NT$1.89 billion last quarter, compared with NT$881 million a year earlier, although revenue expanded about 18 percent year-on-year from NT$6.92 billion to NT$8.2 billion.
PChome Online holds an about 37.6 percent stake in PChomestore.
PChomestore plans to launch an overseas initial public offering (IPO) after delisting from the local over-the-counter stock market, the Chinese-language Economic Daily News quoted general manager Su Yun (蘇芸) as saying yesterday.
It plans to raise between NT$2 billion and NT$2.5 billion from the IPO, which would be launched next year at the earliest, Su was quoted as saying.
E-commerce stocks and Internet companies are not traded at a fair valuation on the local stock market, as most investors gauge a company’s value only by its bottom line, Su was quoted as saying, adding that it is the norm for Internet start-ups to report losses.
The move came after PChomestore’s board of directors on Wednesday last week approved a NT$363 million privatization plan to avoid being forced off of the Taipei Exchange because of negative book value.
Based on the privatization plan, the company has proposed buying back all outstanding shares, about 8.25 million shares, at NT$44 per share on the open market.
Supported by the buyback plan, PChomestore shares yesterday rose 0.12 percent to NT$43.05, despite the company’s poor financial results.
PChome Online shares yesterday rallied 4.12 percent to close at NT$129 in Taipei trading.
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