Zheng Wei’s company probably didn’t pick the best day for an IPO, but he remains confident.
Shares of SSLJ.com Ltd, a home-decoration service and products provider, fell on Monday after an initial public offering, in concert with a plunge by US stocks.
The stock of the Wuhan, Hubei province company, which trades on the Nasdaq Stock Market under the symbol “SSLJ”, closed at $3.59, down $1.41, or 28 percent from its $5 open.
The US stock market has tumbled since Feb 2 on investor concerns over inflation and interest rates.
On Monday, stocks fell the most in 6 1/2 years, with the Dow Jones Industrial Average losing more than 1,100 points.
SSLJ is an acronym for Shengshileju, which represents a happy life in a golden age of peace and prosperity, said the company, which raised about $20 million in the offering.
“We plan to use the proceeds of this offering for general corporate purposes including the establishment of new branch offices, expansion of existing branches, research and development, sales and marketing activities, infrastructure, capital expenditures and operating costs,” said Zheng, chairman and CEO of SSLJ.
SSLJ, the first Chinese company to list on the Nasdaq this year, provides customers with a “one-stop solution” for their homes’ interior decoration and improvement needs by offering consulting, design, construction and furnishing services as well as modern products.
“Customers register online and (then) we provide one-on-one interactive consulting. After the user experiences and has a good understanding of our services and products, customers will sign contracts with us,” Zheng said.
“We will also recommend some smart items we have developed for our customers such as smart air purifiers, smart rice cookers and sweeping robots,” he said.
According to the research firm Euromonitor, it is expected that the O2O (the process of finding consumers online and bringing them into stores) market in China will grow 15.8 percent a year in the next few years and reach $62.1 billion by 2021.
“Compared to other O2O home improvement service providers, vertically integrated service providers such as SSLJ have more ability to control the construction and post-contract business opportunities. Therefore, it is expected to have a growth rate of 22.2 percent in the next five years,” Zheng said.
SSLJ operates sales offices in 10 cities, including Beijing, Shanghai and Shenzhen. SSLJ acts as a general contractor for its customers and their home remodeling projects. The company’s revenue in 2017 was more than $17 million.
Paul Welitzkin contributed to this story.