DEEPZERO's stock plummeted 15.73% during intraday trading on Monday, following a significant post-IPO rally that saw the stock surge nearly 8-fold from its initial offering price.
The sharp decline is attributed to growing investor concerns over the company's deteriorating fundamentals. According to public filings, DEEPZERO's net profit has declined for three consecutive years, contracting by nearly 85% from approximately 61 million RMB to just 9 million RMB. Gross margins have also weakened, falling from 31.2% to 25.5%, while revenue has remained below peak levels.
The widening gap between the company's market capitalization and its weakening earnings profile has prompted investors to reassess valuations, leading to profit-taking after the substantial post-IPO gains.
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