UTime Limited (UTME) went public on April 6 and its shares have returned more than 1,200%—in less than one month! And yes, it’s a China-based technology with a global market at a time of increasing acknowledgment that the demand for tech solutions could well increase post pandemic rather than decrease. But do the company’s financials and growth prospects support its stocks’ high valuation? Read on.Investing in a stock that has recently gone public can be tricky. Information on companies can be limited and analyst coverage can be sparse. Generally, however, companies administer initial public offers to raise capital to fund product development and expansion. In an IPO, investors can buy shares of companies with the potential to grow their top-lines quickly and benefit from market-beating returns over the long-term. But it’s an investment for people with a higher risk appetite. New company dreams can easily turn to disasters.
China-based technology firm UTime Limited (UTME) conducted a blow-the-doors-off IPO earlier this month, in which its stock opened with triple-digit percentage price gains. The stock has delivered a 12x return in less than a month. So, the question is, do UTME’s financials and market prospects justify the exuberance of its IPO investors and can the stock sustain its initial upward trajectory?
Let’s look at what the company does and if it makes sense to invest in this stock right now.
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