Lately it seems that taking a Chinese company public in the U.S. is practically on the same level of popularity as Justin Beiber.
- China-based companies made up nearly a third of U.S. IPO market issuers according to Renaissance Capital’s 2010 Annual Global IPO Review.
- In the U.S., Chinese companies comprised 27% of deal volume compared with 18% in 2009.
- Most Chinese IPOs relating to infrastructure and basic materials were routed to Hong Kong but most growth companies opted for a U.S. listing.
However, though the China IPO market’s boom is expected to continue in 2011 (there are a number of rumours for Q1 launches already circulating) which of the 442 companies are the real deal and will remain on investors’ watch lists.
Date: December, 2010
Market Cap: $1.92 billion
Analyst Take: According to Renaissance Capital director of research Paul Bard, Dangdang has huge growth potential because it is a business model U.S. investors are accustomed to and it plays into China's rapidly growing internet and e-commerce markets.
The Real Deal: Though it has some stiff competition from other online retailers to win the official title of 'Amazon of the East', it is actually the largest online book seller in China with more than 590,000 titles. Like Amazon it has also branched out into other merchandise such as beauty and lifestyle products.
Date: December 2010
Market Cap: $2.11 billion
Analyst Take: Youku.com, known as the Hulu of China, also plays into China's growing internet market, specifically its online video market. 'Investors are very interested to see if Youku.com can become a dominant player in a huge space,' said Renaissance's Bard.
The Real Deal: Though it has competition from the similar in size Tudou.com they seem to be different enough from eachother that they can both do well. Tudou.com is expected to go public in early 2011. Youku.com is more like Hulu and Tudou appears to be more like YouTube with the types of videos it plays. It also had a stunning stock market opening of 110.9% above of its IPO price which analysts believe was not a fluke.
Date: July 2010
Market Cap: $842.44 million
Analyst Take: Bard said a number of strong Chinese IPOs are coming to the U.S. to take advantage of the growing IT outsourcing trend.
The Real Deal: HiSoft Technology was one of the best performing IPOs of 2010 with a 221% jump above its offer price and IT outsourcing is a huge growth market.
Date: July, 2010
Market Cap: $4.30 billion
Analyst Take: Though Camelot isn't quite as hot as HiSoft Technology is definitely worth mentioning because this is such a big growth market, said Bard.
The Real Deal: Camelot set an all-time trading high in November and last week it announced its follow-on public offering of 7,160,206 American Depositary Shares which indicates it is not going anywhere.
Date: December, 2010
Market Cap: $887.04 million
Analyst Take: This is another IT systems provider but Bard believes it is especially outstanding because it provides services to domestic companies in China as well as global companies that want to establish an on-the-ground base in China.
The Real Deal: Its net revenue went up 50% to $135 million in the first nine months of 2010. It also proved to be stronger than fellow Chinese IPOs Sky-mobi and Bona Film Group which went public the same day and recorded the first- and second- worst first-day declines of the year.
Date: October, 2010
Market Cap: $509.37 million
Analyst Take: ChinaCache, an internet content and application delivery service provider, has become a very well-known technology stock in the U.S., said Bard. It is very similar to the popular U.S. firm Akamai.
The Real Deal: This is a good one to watch because with more and more users embracing the internet in China this presents a huge opportunity for ChinaCache.
Date: September, 2010
Market Cap: $648,02 million
Analyst Take: This is an note-worthy one that has grabbed some attention because it is the first restaurant operator from China to come to the U.S., said Bard.
The Real Deal: Though it didn't launch as strongly as Dangdang or Youku.com it does seem to be popping up on investor's radar. It differs from stocks that failed terribly on their first day such as Sky-mobi, a mobile application provider, and Bona Film Group, a private film distributor, because they didn't have broad investor appeal.
Date: December 2010
Market Cap: $243.75 million
Analyst Take: After a bit of a rough start the Chinese car dealership operator is now trading pretty steadily, said Bard. It rose almost 5% during its offering on December 8 but that was after pricing below the company's expected range and offering fewer shares than expected.
The Real Deal: The company is in a slightly risky space which is why it is not being received that warmly by investors. Though it seems like the IPO market is all-welcoming Lentuo and Sky-mobi show that investors are being smart and discrimatory.
Date: April 2010
Market Cap: $1.33 billion
Analyst Take: An economy hotel operator is logically going to do well, said Bard. It gained 14% on its first day of trading and is now pricing around $21 which marks a 7% increase. It hopes to raise about $100 million.
The Real Deal: Though budget hotels are definitely a growing market in China, government regulators are looking to target the hotel industry which will present investor risk.
Date: January 2010
Market Cap: $379.66 million
Analyst Take: It launched with three other Chinese IPOs that all underperformed. China Hydroelectric's offering was upsized from 4.4 million to 5 million shares but since then the stock has lost more than one-third of its value.
The Real Deal: Though the stock price has declined the hydroelectric market in China is starting to take off which could present opportunity for the company.
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