| HONG KONG
HONG KONG Oct 2 A Baidu Inc unit is
seeking to raise $125 million by listing in the United States,
where strong investor appetite for Chinese Internet stocks is
trumping lingering concerns about accounting irregularities from
Qunar Cayman Islands, which provides online travel services,
would be the fourth company based in China to look to U.S.
exchanges this year and its planned New York offering would be
the biggest U.S. IPO by a Chinese firm in two years.
In 2011, a series of research reports and accounting
irregularities hit U.S.-listed Chinese companies, sparking a
wave of delistings and prompting high-level talks between
regulators in Washington and Beijing about handing over key
documents that continue today.
While investors have not entirely forgotten those issues,
they can also see there is money to made in China, said a Hong
Kong-based investment banker.
"There's been big wins, so people will take a look at it
again," the banker said.
The technology-heavy Nasdaq's Composite Index is up
26 percent so far this year, and Chinese firms are particularly
in favour with Baidu, the country's largest search engine
provider, up nearly 60 percent.
That compares to a 2 percent rise in the Hang Seng index
and a 13.2 percent rise in MSCI's world equity index
Alibaba Group Holding Ltd, China's biggest e-commerce
company, is also looking to take its up to $15 billion IPO to
the United States and should Alibaba successfully list there,
that will only bolster the case for China's tech industry to
seek similar offerings.
The number of new listings of Chinese companies in the U.S.
peaked in 2010 when 40 companies went public, raising $4
billion, according to Thomson Reuters data. The next year, the
number of deals fell to 15 and in 2012 only two Chinese
companies listed there.
Several of the Chinese companies that delisted starting in
2011 were those that became public through what's known as a
reverse-takeover, a legal public offering process that, however,
is open to accounting and transparency abuses. Such listings are
a rarity now.
Baidu acquired a majority stake in Qunar, which means "where
are you going" in Chinese, in 2011 for $306 million, but the
company has yet to turn a profit, according to filings.
Chinese e-commerce is booming on an expanding middle class
and rising disposable incomes. Morgan Stanley estimates China's
mobile Internet market could more than treble to around $30
billion by 2015.
Qunar's online customers grew to 203.2 million in the year
to June 2013, from 187.3 million at the end of 2012. Its net
loss narrowed to 16.9 million yuan ($2.76 million), the filings
All the three Chinese company that listed in the U.S. this
year have done well.
LightInTheBox Holding Co, a Beijing-based online
retailer, raised $78.9 million in a June IPO on the New York
Stock Exchange and its shares have risen 27 percent since the
China's Montage Technology Group Ltd has seen its
stock surge 37 percent since its $71 million September IPO on
the Nasdaq while China Commercial Credit, a
micro-credit lender, has seen its shares rise 46 percent since
its Nasdaq debut in August.