Shares of Autohome Inc (ATHM.N), an owner of Chinese car sales websites, rose as much as 83 percent in their U.S. market debut on Wednesday, valuing the company at about $3.2 billion.
Autohome, controlled by Australian phone company Telstra Corp Ltd (TLS.AX), raised $133 million after its initial public offering was priced at $17 per share, above the expected range. (link.reuters.com/xun35v)
Autohome shares opened at $30.16 and rose to a high of $31.37 in early trading on the New York Stock Exchange.
Appetite for Chinese offerings is recovering after a series of accounting scandals in the past couple of years dried up U.S. listings of China-based companies.
Telstra, which sees Asia as a growth market, got control of Autohome in 2008, when it bought a majority stake in the company that owned the auto website and two technology retail websites.
Autohome's websites, autohome.com.cn and che168.com, had an average of 2.7 million daily unique visitors in the nine months ended September 30, the company said in its prospectus.
China is the world's largest passenger car market. The number of new passenger cars sold in China is expected to rise about 13.3 percent to 20.7 million by 2015, according to industry research firm LMC Automotive.
Autohome's websites, which provide a range of information to car buyers, have more than 7.7 million registered users. The company gets its revenue from advertising and dealer subscriptions.
Autohome, incorporated in Cayman Islands in 2008, tripled its net revenue to $120.6 million between 2010 and 2012, while net income more than doubled to $35 million.
"Autohome maintains a strong brand name in China," said Jay Ritter, IPO expert and professor of finance at University of Florida. "What also goes in favor of the company is that it is highly profitable."
Telstra will hold 68 million Class B shares, representing 66.2 percent of the company's voting rights after the offering. Telstra's president and group executive, Tim Chen, is the chairman of Autohome.
COMPLEX LISTING STRUCTURE
Autohome, like a number of other Chinese companies listing in the United States, relies on a little-tested legal structure called "variable interest entity" (VIE) that gives an investor economic interest but no ownership.
The structure helps companies bypass Chinese government bans on foreign ownership in some business sectors.
China for years allowed major internet companies such as Baidu Inc (BIDU.O), Tencent Holdings Ltd (0700.HK) (TCEHY.PK) and Sina Corp (SINA.O) to operate through VIEs.
Autohome operates through a holding company based in the Cayman Islands, which controls the underlying assets through equity interests in multiple subsidiaries in British Virgin Islands and Hong Kong. These units in turn deal with entities and executives in mainland China.
Autohome joins Chinese companies such as online sports-lottery operator 500.com (WBAI.N), mobile applications group Sungy Mobile Ltd GOMO.O and travel booking website Qunar Cayman Islands Ltd (QUNR.O) that have had strong U.S. debuts this year.
It has been a bumper year for U.S. IPOs. According to PricewaterhouseCoopers, 225 companies listed their shares in the U.S. market up to December 5, raising $51.3 billion.
Autohome is headed by James Zhi Qin, former chief operating officer of Chinese website 265.com, which was acquired by Google Inc (GOOG.O) in 2007.
The company said it plans to use the proceeds for technology and product development and for marketing.
Deutsche Bank and Goldman Sachs were the lead underwriters of the 7.8 million American depositary share offering.
Autohome's shares were trading at $28.99 near midday on the New York Stock Exchange.
(Additional reporting by Neha Dimri in Bangalore; Editing by Kirti Pandey and Saumyadeb Chakrabarty)