(Yicai) July 22 -- The share price of OnTime, also known as Ruqi Mobility, is down 48 percent since the Chinese ride-hailing platform went public in Hong Kong on July 10.

OnTime [HKG: 9680] closed 0.3 percent higher at HKD18.06 (USD2.31) a share today, compared with an initial public offering price of HKD35.

Industry insiders attribute the stock's decline to two main factors: OnTime’s primary revenue stream comes from its operations in the southern city of Guangzhou, where recent ride-hailing data has been less than optimistic, and investors are skeptical about the industry's potential to turn profitable.

Founded in 2019 by GAC Group and Tencent Holdings, OnTime mostly operates in Guangzhou, where it is headquartered. Revenue from its business in the capital city of Guangdong province accounted for 71 percent, 62 percent, and 53 percent of the firm’s total income in the three years to 2023.

The number of online ride-hailing bookings in Guangzhou rose more than 24 percent to 121,200 from last September to this May, while that of riders rose only 7.3 percent to 138,500, according to a report released on July 7. But between December and May, drivers’ average daily order volume fell 14 percent to 12.2, and their average daily revenue dropped 9.2 percent to CNY311 (USD42.76).

OnTime reported a net loss of CNY692.8 million (USD95.3 million) last year. The platform’s operator Chenqi Technology said in March that OnTime will likely remain in the red for three more years.

Other ride-hailing service providers are also experiencing similar issues. Dida Chuxing went public on the Hong Kong Stock Exchange on June 28 at HKD6 (77 US cents) a share. The stock [HKG: 2559] fell 2 percent to HKD2.47 today, or 59 percent below the IPO price.

Despite the difficulties, many other ride hailers are seeking to go public, including Caocao Mobility, which is backed by auto giant Zhejiang Geely Holding Group, and Xiangdao Chuxing, which has SAIC Motor, Alibaba Group Holding, and Contemporary Amperex Technology as shareholders.

Ride-hailing stocks will suffer a similar fate as new energy vehicle startups, such as Nio, Xpeng Motors, Li Auto, and Leapmotor, which performed poorly on the Hong Kong bourse during their initial listing period, a local investment banker told Yicai.

Editor: Futura Costaglione