Bottom line: Focus Media’s plan for a backdoor listing in China stands a better than 50 percent chance of success, potentially opening a new re-listing path for Chinese firms whose shares are undervalued in New York.
Focus Media eyes China backdoor listing
Former advertising services high-flyer Focus Media is eying a plan to become listed again, with an ambitious target of tripling its value from just 2 years ago when it privatized. If the plan really works, it could create an attractive template for a return to publicly-traded status for the group of about a dozen Chinese companies that were formerly listed in New York but privatized after their shares became undervalued. The key to the plan appears to be a decision to list back at home in China, where Focus’ name is more familiar and local investors are far less sophisticated and prone to hype and overinflating values of well-known companies. Read Full Post…
Bottom line: 55Tuan’s increased IPO target and a major new funding round for online financial site Juzi Licai show investor interest remains high in Chinese Internet firms, though it could taper off in the second half of the year.
Juzi Licai wins $100 mln in funding
You know the market is still hot for China Internet companies when when money losers can boost the size of their IPOs, and start-ups can raise $100 million or more. That’s exactly what’s happening, with word that loss-making 55Tuan has boosted its IPO fund-raising target by more than 50 percent, as it seeks to become China’s first listed group buying site. At the same time, other media reports say Juzi Licai, an online financial site, has just raised a nifty $100 million in its second round of funding just 6 months after the launch of its core product. Read Full Post…
Bottom line: Strong pricing for a large new bond from Car Inc reflects good potential for companies in China’s secondary car market, which should see strong growth as new car sales slow.
Car Inc raises $500 mln in bond offer
Let’s take a brief break from Internet companies to look at recently listed auto rental specialist Car Inc (HKEx: 699), which has excited the market with a new $500 million bond offering. Despite its earlier setbacks, including an aborted previous IPO, Car Inc has done quite well since its listing last September, as Chinese car-related plays find a strong audience among international investors. Interest seems especially strong toward car companies that target the second-hand market, as new car sales look set to slow sharply due to China’s slowing economy and restrictions being imposed by many cities to control pollution. Read Full Post…
Bottom line: Wanda Cinema and Spring Airlines represent a new generation of major private companies to list in China, and should enjoy strong share gains over the short to medium terms following their IPOs.
Spring Air leaps on first 2 trading days
There was plenty of spring in the stocks of 2 hot companies that listed in China this week, with budget carrier Spring Airlines (Shanghai: 601021) and theater operator Wanda Cinema Line (Shenzhen: 002739) jumping 44 percent in their trading debuts. The pair are part of a new generation of privately owned companies starting to list on China’s main stock markets, stealing the spotlight from an older group of state-run firms that still dominate the country’s 2 main stock exchanges in Shanghai and Shenzhen.
Obviously profits and broader performance will be the biggest determiner of whether these companies’ stocks continue to rise after the euphoria of their IPOs starts to fade. But from the perspective of a western buyer like myself, Wanda Cinema and Spring Air are 2 of the first Chinese-listed firms that I’ve seen whose stocks I would personally consider buying. Read Full Post…
Bottom line: This year is likely to see 6-9 New York IPOs by Chinese tech firms, mostly in the $50-$100 million range, while Legend’s planned IPO in Hong Kong or China is likely to get a mixed reception.
Lenovo parent Legend eyes H2 IPO
A new forecast on Chinese high-tech IPOs for the year ahead is stating the obvious, namely that new listings are set to slow dramatically in 2015 after a bumper harvest in 2014. In fact, the record year for fund-raising in 2014 is a bit misleading, as it really represents about 3 years worth of offerings that accumulated during a frosty period that led to a near freeze for IPOs starting in 2011. Now that much of the backlog has been cleared, it’s not surprising that there are few major new companies that are still at the right stage of development for listings.
At the same time, another report says that Legend Holdings, parent of PC giant Lenovo (HKEx: 992), has decided to list in Hong Kong, forgoing previous plans to make an IPO in its home China market. That decision isn’t a huge surprise if it’s true, and could provide a highlight for international tech investors in this year’s muted IPO parade for high-tech firms. Read Full Post…
Bottom line: A new list of China’s top apps spotlights fast-growing names like news app Today’s Headlines, photo app Meitu and dictionary app Youdao, which could raise hundreds of millions of dollars in new funds this year.
Meitu earns place on top 10 app list
A newly released list of China’s top 10 apps for 2014 is shining a spotlight on an up-and-coming field of lesser known names that could be companies to watch, as many are much younger than stalwarts like Baidu (Nasdaq: BIDU), Alibaba (NYSE: BABA) and Tencent (HKEx: 700). The “BAT” trio of China’s biggest Internet firms took 4 of the top 10 spots on the list, which was compiled by Baidu. But far more interesting were some of the other names, including recently listed social networking app Momo (Nasdaq: MOMO) and news app Today’s Headlines, which made its own headlines with its meteoric rise last year. Read Full Post…
Bottom line: IPOs this week by Spring Airlines and Wanda Cinema should debut strongly, and a proposed Hong Kong listing by Sinopec’s retail arm should also do well if broader market sentiment remains strong.
Spring IPO set for liftoff
We’re only 2 weeks into the New Year, but already the IPO market is getting off to a roaring start with major new listings from budget carrier Spring Airlines and the movie theater unit of real estate giant Wanda Group. At the same time, other media are reporting that the newly spun off retail arm of oil refining giant Sinopec (HKEx: 386), already flush with cash from a major stake sale to private investors last year, is also eying an IPO in Hong Kong. Read Full Post…
Bottom line: 55Tuan’s listing plan stands a 50 percent chance of succeeding due to its modest size and broadly positive market sentiment, but could ultimately fail due to its loss-making status.
55Tuan files for Nasdaq IPO
I spent much of December predicting we’d see the first listing of a Chinese group buying site this year, and now that may happen with the first official IPO filing by a Chinese Internet company in 2015. But my prediction that the listing would come from sector leaders Dianping or Meituan was off the mark, and now it appears that 55Tuan may take the prize as China’s first listed group buying site. It’s still not completely certain that 55Tuan will be the first, since the company made previous attempts at such an offering but ultimately had to scrap the deal due to lack of interest. Read Full Post…
Bottom line: New IPOs by Chinese tech firms will slow sharply next year, with profitable, sector-leading companies the most likely to make successful offerings.
Linekong finishes flat in banner year for IPOs
On this final day of 2014, I thought I’d take a look at the scorecard for high-tech IPOs this year, including how they’ve performed since their debuts and what we might expect for next year. It seems fitting to start the discussion with the final high-tech IPO of the year, which came with a flat trading debut on Tuesday for mobile gaming company Linekong (HKEx: 8267). That may sound bad, but it’s actually quite good for gaming stocks that have become investor pariahs over the last 2 years. Read Full Post…
Bottom line: Chinese brokerages are in a fund-raising frenzy to take advantage of strong market sentiment, but their shares could pull back sharply in the second half of next year if China’s stock market rally runs out of steam.
Guosen shares soar in trading debut
It’s hard to read the financial headlines these days without seeing a story about the massive recent rally in Chinese brokerage stocks, which is being fueled by several factors. The brokerages themselves haven’t been blind to the fact, and are racing to take advantage of the positive sentiment to raise big chunks of new cash. Now leading brokerage Citic Securities (HKEx: 6030; Shanghai: 600030) and mid-sized player Guosen (Shenzhen: 002736) have joined the binge, with new share issues that could end up collectively raising up to $6.5 billion. Read Full Post…
Bottom line: Dianping’s major new fund raising is likely to be its last before a New York IPO, which could come as soon as the first half of next year and raise up to $800 million.
Dianping in major new fund raising
I’m having a slight feeling of deja vu today, after reading the latest reports that restaurant ratings and group buying site Dianping has just won a major new funding round worth nearly $800 million. This particular news comes just a week after similar reports came out saying that rival group buying site Meituan was on the cusp of closing a new funding round totaling $700 million, in one of the biggest such private investments for China’s Internet sector this year. Internet watchers will recall that the last time we saw this kind of fund-raising flurry around a single industry came nearly 4 years ago, when investors poured hundreds of millions of dollars into the very same group buying space. Read Full Post…
