NEW YORK (AP) – Chinese companies are poised to dominate the US IPO market this week.
Of the nine companies scheduled to conduct initial public offerings, six are from China and one is from Taiwan. If all go to market as planned, it will be a record number of Chinese companies listing in the US in the same week, according to data provider Dealogic.
The companies drawing big investor interest are E-Commerce China Dang-dang Inc., which is modeled after online store Amazon.com Inc., and Youku.com Inc., an Asian mash-up of popular US online video websites Hulu and YouTube.
Since September, Chinese companies have made up 35 percent of IPOs on US exchanges, according to Renaissance Capital, an IPO research and investment fund based in Greenwich, Conn. Chinese IPOs have had an average return of 30 percent, while IPOs overall have returned about 19 percent.
“Given that the US economy is not growing very fast, if it is growing at all, US investors are naturally drawn to China,” said Nick Einhorn, an analyst with Renaissance Capital.
IPO professionals say the companies racking up the biggest investor orders are those that play on China’s transition to a consumer society. The most successful IPOs have bet that China’s growing middle class will have more free time, access to the Internet, higher incomes and the inclination to spend a bigger chunk of that income.
E-Commerce is China’s largest online bookseller. It expects net proceeds of about $144.1 million from its $204 million IPO, which the company plans to use to build up its technology infrastructure and, like Amazon, broaden its product offerings beyond books, CDs and DVDs.
Youku.com is the country’s leading online TV and video portal. It licenses popular TV shows, sporting events — including the 2010 World Cup games — and movies. Like YouTube, it hosts user-generated videos streamed to computers and mobile phones.
Youku expects net proceeds of about $139 million from its $154 million IPO. It plans to spend the funds on improving its technology and buying up more video content.