Tag: ipo

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IPO

Visa IPO

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Yes, the long anticipated credit card giant is filing for the IPO. Here is its S1 prospectus. I have not read the S1, but from what I read (from MSNBC), they are going to raise up to $10 billion. That’s the largest IPO in US since 2000, and it’s the category of China ICBC’s IPO couple years ago (1398.HK).

My gut feeling of its IPO is two fold:
1) It will be priced (relative terms) higher than MasterCard IPO couple years ago, the reason goes as follows: MA went up from $40 to $200 in that period. Now people who missed the boat on MasterCard IPO will try hard to get on the Visa ship, thinking they can get the return like MA did.

2) current market condition is not friendly for IPO, because the big investment banks are in financial difficulty now. So, do they expect little guys (like us) to hold the bag?

Business wise, we all know the credit card transaction is booming. From developed countries to developing countries, everyone is addicted to the plastic, as shown by the following pic (from Visa prospectus).

Visa card pic

Visa is an Olympics sposor, so pack your visa card if you visit Beijing this August 🙂

(Update Feb 28) My friend LaoZhang (author of StrengthTrader.com) wrote a good piece about Visa IPO (in Chinese), here is the link.

Chinese translation
如题所述，VISA这个信用卡巨无霸要开始发行新股了。这里是它的S1 招股说明书，我还没来得及读，但是据MSNBC说，VISA准备至少募股100亿美元。这将是2000年以来美国最大的IPO，和几年前中国工商银行的IPO(1398.HK)有的一拼。

听到VISA 发行股票，我的直觉是：

1）相对而言，VISA股票的定价会比几年前MasterCard IPO高，原因是：从发行到现在，MasterCard股票由40美元涨到200美元，于是错过MasterCard IPO 那趟船的人现在会挤破头努力登上VISA IPO 这艘舰，满心以为可以得到象MasterCard那般的回报。

2）现在的市场条件并不利于发行股票，因为目前很多大型投资银行都缺钱。难道VISA期望我们这些散户一头扎进去，然后被套牢？

从商业角度而言，谁都知道信用卡交易正在急速发展。无论发达国家还是发展中国家，几乎每个人都对这小小的塑料卡片上了瘾，就如下图所展示的（图片来源：VISA招股说明书）

Categories
China Stocks

Perfect World IPO

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I read this from Netease: Perfect World, a Chinese online game co., will debut in Nasdaq under ticker symbol PWRD tomorrow July 27.

Here is the prospectus from SEC. The company was not profitable in 2005, and 2006, but it turned corner in Q1 2007. It seems other Chinese online game companies are also coming because the market started to warm up to SNDA, NCTY etc, and the craziness of Wii.

I’m not a gamer, and I’m packing for back to home trip. So I will leave the analysis to experts.

Categories
Business Stocks

Why Companies Go Public?

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This is a too big question. But I have thought this thing for quite a while, and want to share my thoughts. A few weeks ago I was watching the “Boss Town” program at China-CBN, the host posed this exact question to the founder of Qiao Xing (Nasdaq: XING), Mr. Wu Ruiling: why do you go to Nasdaq considering the overhead of compliance (Sarbane-Oxly etc.)?

Fair question. Mr. Wu shared one reason: when a company grows to a certain stage, it’s better to have more than one boss (owner): other minority owners can contribute to the development of the company.

I think besides “better corporate governance/management”, there are at least two reasons: 1) To raise the money (capital), 2) To raise the company profile. These two reasons fit well with the recent Chinese IPOs in last Fall: New Oriental (EDU), Home Inns (HMIN), and Mindray (MR). Let’s explain one by one.

Continue reading “Why Companies Go Public?”
Categories
China Stocks

Xinhua Finance Media Limited XFML IPO

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I received an Email from my broker WR Hambrecht asking me if I am interested in Xinhua Finance IPO. I talked it a little in a previous post; now I feel it’s not another Maritz. Also after yesterday’s crash, I got a little warmed up on it. So I called them and indicated my interest. Don’t know if I will get some. We will see.

Here is their F1 prospectus. I think some of comparables include: FMCN, JRJC in China and Viacom, Reuters in the US. Just on the top of my head, will do my reading and report my finding later. By the way, Xinhua is a very well known name and brand in China.

xinhua finance pic

Categories
Business China

Xinhua Finance Media Limited IPO

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Found this through my friend thesunsfinancialdiary. I briefly went through their F1 prospectus. I had to admit I’m not in best position to evaluate their business: they have 5 divisions providing services from creating adverstisement to customer research. I can think of a St. Louis based privately held company called Maritz which does something similar: they organized conferences for other companies, send promotional gifts for companies like Nissan, take care of the employee reward etc. One way to analyze Xinhua Finance (symbol: XFML) is comparing each division to a public company does something similar, then adding them up.  

On a related matter, the event marketing services in China is booming. About 2 years ago, during my Jiu Zhai Guo tour, I met a senior executive of a conference organizing company  based in Beijing, I learned about three most popular conference places in China: Shanya (Beach), Dali (Yun’nan), and Jiu Zhai Gou/Chengdu.  

By the way, the parent company of Xinhua Finance Media Limited is traded in Tokyo. Also, the CEO and co-founder of the company is Ms. Fredy Bush, not sure if she is related to the George Bush family…

Categories
China Stocks

Motel 168 IPO

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From Reuters:

“China’s Motel168, one of the country’s three biggest budget hotel chains, plans to raise about $100 million through an initial public offering on Nasdaq, sources familiar with the plan said on Wednesday.

Motel168, controlled by privately run Shanghai hotel and restaurant manager Merrylin Holdings Ltd., has hired Wall Street investment bank Morgan Stanley (MS.N: Quote, Profile , Research) to advise it on the IPO, planned for the third quarter of this year, the sources said.

Morgan Stanley is also a major shareholder in Motel168 after an investment arm of the bank paid $20 million for a 20 percent stake in late 2005, the sources said.

“Motel168 is hungry for capital now as it has to compete with Home Inns, Jinjiang Inn and other rivals for aggressive land purchases to build more hotels,” said one Shanghai-based source close to Motel168.

“If you don’t speed up, then you lose market share and soon you will be completely out of the race,” said the source, who declined to be identified before an official announcement.”

Wang Jianshuo has a good review about motel 168 in his blog.

Categories
China Stocks

Second Look at Huiyuan Juice IPO

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I noticed this juice thing is getting popular in China, just like the coffee did in recent years. In summer 2004, when I attended a bunch of formal dinners in Ningbo, juice is an option, as is the wine. Juice is also offered in the airplane. One thing I noticed that the orange juice in China is mostly “from concentrated”, probablly due to cost and taste reasons. So the demand and the growth is there. The problem with the company, from I read from FinanceAsia:

“Among the potential concerns, observers say, is the cost of buying juice concentrates and fruit puree, which increased by more than 50% in the first nine months last year. The company buys about 56% of this raw material from abroad, making it vulnerable to swings in international prices, particularly for oranges.”

Continue reading “Second Look at Huiyuan Juice IPO”
Categories
Business China

Huiyuan Juice IPO in HKSE

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From The Standard:

“China Huiyuan Juice Group, the mainland’s largest fruit juice maker, is forecast to post 222 million yuan (HK$223.08 million) in net profit in 2006, up 106 percent over a year ago. The company recorded 108 million yuan in net profit in 2005, up 486 percent from the previous year.

Huiyuan is seeking to raise US$250 million (HK$1.95 billion) through an initial public offering next month as it seeks capital for expansion.

…Its peers, milk producer China Mengniu Dairy (2319) and Tingyi Holdings (0322), are trading at 33.8 times and 36.7 times 2007 earnings respectively.”

Comments: like everything else in China, the growth is astonishing. Don’t expect to make quick money on this one though. The expectation will be reflected on the price when it debuts…

huiyuan juice

The ticker symbol is 1886.HK.

Categories
China Stocks

New Trend in the China Stock Market

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I did not realized the China Life Insurance (LFC) is going IPO in Shanghai Stock Exchange (A shares) until a few days ago. I did a little research on the web and found out there are quite a few big cap Chinese ADRs are going this route: Guangshen Railway (GSH) and Aluminum China (ACH) are another two. Here is an article I found on the web: besides those US ADRs, we have a few Hongkong listed companies such as Bank of China, China Industrial and Commercial Bank, PingAn Insurance, Air China, DaTang, etc.

So far the best performing stock is LFC; GSH also got a jump in past few days. Should have done research on this earlier: stock market is not like pursuing girl friends, besides being focused one should also be vigilant on new things.

Who is going to be the next one on the “back to China IPO”? I don’t know. But I believe the trend will continue, and one of the safe way to bet on this is investing through ETFs such as FXI. Sun’s Financial Diary has a very good analysis on this.

Categories
Stocks

Heelys IPO Start Tomorrow Dec 8

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Obviously there is already a lot of excitement on this one, partly because of the success of similar plays such as UARM and CROX; partly because of Jim Cramer’s pump last night Dec 6, Jim did make a mistake saying it’s going out today (Dec 7), which is not true. It is going to be priced today and started trading tomorrow Dec 8, see this article from MarketWatch for more details.

(Update) Actually the HYLS was priced above the 16 to 18 range and went to 21, according to Reuters. Considering the 2006 earning of 1.00 (it already made 0.70 in first 9 months in 2006), and a PE ratio of 30 (which is reasonable), the stock could start at 30. This means a 50% jump from the IPO price. While this is not a record (compared to more than 100% jump of NMX), it will still be very nice. We can already see the action from today’s CSWC (it owns 35% of Heelys) stock, it went up 15%. 

Once again the bubble is building…stay tuned.