Bottom line: China Reading’s IPO should be well received when it launches its road show as soon next week, and the shares should price and debut strongly on its good profit margins and growth prospects.
China Reading set to launch IPO road show
Another hot IPO with ties to one of China’s leading Internet firms is nearing the starting line, with word that the highly anticipated listing for Tencent’s(HKEx: 700) online literature unit is finally going to kick off shortly. That means we will finally get to see some financials for China Reading, whose plans for an $800 million IPO have been discussed since as early as February.
In fact, this particular IPO has been discussed for far longer than that, since the company has gone through a number of forms in its long march to market. I’ll recount that shortly, but will begin with some quick thoughts on this offering’s chances for success. We’ve already seen in this burgeoning IPO season that having a pedigree from a name like Tencent doesn’t guarantee success, as was the case with Alibaba-backed logistics firm Best Inc. (NYSE: BSTI). That IPO priced miserably due to stiff competition in the logistics space, and the stock is only up a modest 6 percent since it started trading in New York. Read Full Post…
Bottom line: ZhongAn should perform reasonably well over the short- to medium-term by drawing on its big-name investors for business, but faces uncertainty due to an untested business model.
ZhongAn banks on online insurance
There’s not a ton to say about the year’s first blockbuster IPO from the fintech realm, since it really went pretty much according to plan. I’m talking about the just-concluded listing for online-only insurance startup ZhongAn Online Property & Casualty Insurance, which was almost guaranteed a strong debut when its shares began trading yesterday in Hong Kong.
The bigger question for ZhongAn and its other fintech peers will be whether they can continue to thrive once the spotlights are gone and they have to do business over the longer term. Anyone can pretty up their books in the run-up to an IPO, but keeping the business flowing afterwards is often a bit more problematic. ZhongAn could be a good case in point, as its product lineup seems to be constantly evolving, as does the lineup for many of these fintech firms, due to individual and broader industry factors. Read Full Post…
Bottom line: Lufax’s Hong Kong IPO could launch by the end of this year and will get a strong reception, while Xinhuanet’s Shanghai IPO will get a similarly positive reception due to strong support from state-run investors.
Xinhuanet approved for Shanghai IPO
Just days after the stodgy Postal Savings Bank of China launched an IPO that will be the world’s biggest in 2 years, the much higher-tech P2P lender Lufax has kicked off another Hong Kong listing that’s nearly as large. More specifically, Shanghai-based Lufax has begun hiring investment banks for a listing that could raise up to $5 billion, according to new reports.
Meantime, a flurry of new domestic Chinese IPO plans is also in the headlines, led by word that state-owned online news giant Xinhuanet has been approved for a new listing in Shanghai. China stock watchers might recall that Xinhuanet’s IPO plan first surfaced in the headlines 3 years ago, but was indefinitely shelved due to repeated slowdowns and freezes for new domestic offerings due to market volatility. Read Full Post…
Bottom line: Weakening sentiment towards Postal Bank’s IPO reflects concerns about China’s economic slowdown, while Lufax’s choice of Hong Kong for its IPO should help to attract more international investors.
Lufax IPO bound for HK
What’s likely to be this year’s biggest IPO by Postal Savings Bank of China is limping ahead, with word the ultra-conservative lender is set to sign up $6 billion in commitments for its Hong Kong offering. But western investors are reportedly staying away from the deal, worried over high valuations and China’s sputtering economy.
Meantime, another financial IPO by leading P2P lender Lufax is back in the headlines, with word the listing probably won’t happen until next year and will occur in Hong Kong. That news marks a flip-flop from reports earlier this week, when media cited Lufax’s largest backer saying plans were still on track for an IPO this year, with Shanghai as the preferred listing location.Read Full Post…
Bottom line: Lufax’s reiteration of plans for an IPO by year-end indicate China’s regulator may increase new listing approvals as the market stabilizes, while progress in Yunda’s backdoor listing also may reflect a relaxing attitude by the regulator.
Lufax sticks to plan for IPO by year-end
After an anemic flow of domestic IPOs so far this year, building pressure and a stabilizing stock market may finally be prompting the regulator to step up the pace as we head into fall. That appears to be the thinking at Lufax, China’s leading P2P lender, which says it is still targeting an IPO by the end of this year, after previously indicating China would be its first choice for such a listing. Meantime, an easing of the IPO climate won’t come soon enough for parcel delivery firm Yunda, which has joined many of its peers in moving ahead with a backdoor listing plan in Shenzhen. Read Full Post…
Bottom line: Autohome’s shares will come under pressure after a mass defection of its middle management, most likely to start a rival company, while Ku6 is likely to close shop within the next 2 years following its de-listing from New York.
Mid-level managers leave Autohome en masse
A couple of new twists are bubbling through the headlines in a wave of buyout offers for US-listed Chinese companies, led by the latest signs that a privatization for online car site Autohome (NYSE: ATHM) is effectively dead. Those signs are coming in reports of a wave of resignations by mid-level company executives, following a failed management-led buyout bid. Meantime, online media site Ku6 Media (Nasdaq: KUTV) has formally completed its own buyout offer, meaning this insignificant player that was once a leader in China’s new media space will probably de-list very soon and could disappear completely within the next 2 years. Read Full Post…
Bottom line: Autohome’s attempt at a management-led buyout failed due to difficulties financing such a large deal, and Qihoo’s new attempt to finance its buyout with crowd funding-style tactics points to similar problems.
Ping An takes over Autohome boardroom
New developments in 2 of the biggest privatizations of US-listed Chinese companies are casting a spotlight on the difficulty many of these cases face, especially bigger deals that require billions of dollars in funding to succeed. The first case has the management team at online car specialist Autohome (NYSE: ATHM) losing its battle to take the company private, following a high-profile battle with its largest stakeholder. The second has software security specialist Qihoo 360 (NYSE: QIHU) reportedly turning to crowd funding-style tactics to try and raise money for its own buyout, hinting at financing difficulties for a privatization that values the company at more than $9 billion. Read Full Post…
The following press releases and news reports about China companies were carried on June 28. To view a full article or story, click on the link next to the headline.
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Autohome (NYSE: ATHM) Shareholding Settles, With Ping An as New Chairman (Chinese article)
A Slice of Qihoo’s (NYSE: QIHU) $9.3 Bln Buyout for Sale on China Streets (English article)
Bottom line: Qunar looks like the latest Chinese buyout candidate to become involved in a contested bidding war, while Autohome is unlikely to succeed in efforts to stop the sale of a stake in the company by its largest shareholder.
Qunar gets surprise buyout offer
A flurry of headlines from the wave of privatizations by US-listed Chinese companies are in the news as the week winds down, led by word that online travel site Qunar (Nasdaq: QUNR) has become the latest to get a buyout offer. Qunar wasn’t the only one lining up to leave New York, as game specialist Sky-mobi (Nasdaq: MOBI) also announced its own plan to go private. Meantime, a hotly contested privatization by online car specialist Autohome (NYSE: ATHM) has taken a few new twists, and wind power equipment maker Ming Yang (NYSE: MY) says it has just completed its own previously announced privatization. Read Full Post…
Bottom line: BOC Aviation’s stock will debut with a 5-10 percent gain when trading starts on Wednesday, while Lufax’s delay of its IPO plan looks prudent until China’s P2P lending sector settles down.
BOC Aviation set for strong debut
After running into some early minor turbulence, Asia’s second biggest IPO of the year is set to take off later this week in Hong Kong when aircraft leasing company BOC Aviation begins trading in what should be a relatively buoyant debut. But the ride to market is looking a bit rockier for Lufax, with reports that what could become the first IPO for a P2P lender is being delayed until next year. Lufax had earlier signaled it planned to make its listing this year, most likely in Hong Kong or Shanghai. But its plan is being delayed as Beijing moves to clean up the nation’s unruly P2P lending market. Read Full Post…
Bottom line: Privatization plans by Autohome and iKang will face long delays due to shareholder resistance and rival bids, while Wanda Commercial’s similar buyout will proceed soon after some technical issues are resolved.
Autohome, iKang take buyout clashes to court
Three of the larger privatization bids by offshore-listed Chinese firms are running into snags, hinting at a growing wave of resistance to such offers considered by many as too low and opportunistic. Two of the most colorful tales involve online car site Autohome (NYSE: ATHM) and private clinic operator iKang (Nasdaq: KANG), whose management-led buyout deals both hit snags due to unexpected third-party developments. In the latest twist to those stories, Autohome is now taking legal action to prevent a separate share sale that could kill its own management-led buyout bid; while iKang is playing legal games with a rival bidder that trumped an original management-led buyout plan. Read Full Post…
