Companies

Chinese firms step up IPOs in March

By Cai Xiao (China Daily)
Updated: 2011-04-07 10:33

BEIJING - Chinese companies have stepped up to go public and started to play actively on overseas stock markets in March, a leading Chinese private equity (PE) research agency said.

According to the report released on Wednesday by Zero2IPO, 105 Chinese enterprises listed at home or abroad in the first three months of this year, nearly double the initial public offerings of companies from other nations. Of that total, 16 were listed outside the Chinese mainland.

In March, according to Zero2IPO, 36 Chinese enterprises raised $7.3 billion through IPOs, an increase of 58.5 percent year-on-year. Of those, six went public in markets outside the Chinese mainland, including Hong Kong, compared with two in February.

"Qihoo 360's success (on the New York Stock Exchange) will encourage more IT companies to seek listing opportunities abroad," said Zero2IPO analyst Luo Shu. "A listing tide for high-tech companies will come and overseas stock markets are popular."

In the first quarter, nine of the 16 companies that listed outside the mainland chose Hong Kong to go public, and others selected the New York Stock Exchange, Korea Exchange and Nasdaq.

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Though the international situation, such as the political unrest in the Middle East and nuclear panic in Japan, affected the global stock markets in March, the six Chinese companies that listed outside the mainland raised $2.6 billion through their IPOs.

On March 30, Qihoo 360 launched its 12.1-million-share IPO at a share price of $14.5, above expectations. Investor enthusiasm saw the stock rise 86 percent to $27 when the market opened and closed at $34, an increase of 134.5 percent.

Zhang Lan, an analyst at Zero2IPO, said companies listing abroad are usually engaged in different businesses from those listing at home.

"Overseas IPO companies are mainly in sectors such as Internet, IT, clean technology and education, while those at home are in the machinery building, energy and chemistry industries," said Zhang.

PE and venture capital (VC) companies offered financial support to 17 of the 36 companies listed in March. Zero2IPO said PE and VC firms have received more than sevenfold returns.

"VC and PE companies can help enterprises to develop rapidly by offering capital, but their management styles may not be consistent with that of the listed companies' senior executives, which is likely to bring some conflict," said Zhang.