Chinese Internet Companies Reopen To The US Market &Nbsp, Will Bubbles Repeat?

In the wake of the economic recovery in the United States, China is at a loss.

The situation of Chinese Internet companies queuing up for listing in the US is on again.

Since the second half of last year, including Youku,

Why can Chinese Internet companies touch Wall Street repeatedly? Is there a bubble gathering behind the hot listing scene? In this regard, insiders believe that the industry's advantages and the high economic growth in China are the main factors to impress investors, and it is expected that the Chinese Internet companies will go on the market in the US.

And because of a more solid industrial base and better business models, China's Internet industry should not repeat the mistakes of the American bubble.

The surge of listing

In March 30th, Qihoo 360 officially traded on the New York stock exchange, becoming the first China Internet Corporation to list in the US capital market in 2011.

In the first day of trading, Qihoo 360 shares rose 134%, and rushed into the first three days of the first day of China Internet Corporation share price listing in the US.

In fact, Qihoo 360's debut is not a surprise to the market.

As early as last December 8th, the United States Youku and Dangdang on the same day shook the market.

On the first day of trading, Dangdang shares rose 87%, and Youku shares rose to 161%, the best performing IPO in five years.

According to the latest US regulatory documents, the social networking site Renren is scheduled to visit the NYSE in May 4th and plan to raise $584 million. The online dating website Jiayuan is also ready to go on NASDAQ to raise $100 million.

Such a scenario makes the market vaguely recall several upsurge that has occurred in the past ten years.

Around 2000, portals, such as Sina, Sohu and NetEase, came to the US market one after another, setting off the first wave of Chinese Internet companies going overseas.

But since then, the wave of the Internet bubble has collapsed.

It was not until December 2003 that Ctrip landed on the NASDAQ that it again ignited the enthusiasm of Chinese Internet companies to list overseas. Shanda, Baidu and air network took off one after another, creating an unprecedented hot spot for Chinese Internet companies to list in the US.

Yang Ge, chief representative of the Beijing Representative Office of NYSE, believes that since September 2010, China Internet Corporation, represented by Youku and Dangdang, has been listed in the United States and opened the curtain for a new generation of China Internet Corporation going to the US market.

He expects that a number of China Internet Corporation will be listed in the US in 2011, and there will be many Qihoo 360 like companies with unique business models.

The story of China is wonderful.

What kind of moving story has Chinese Internet companies touched on investors in Wall Street? Scott Cutler, executive vice president of New York Pan European exchange group and joint director of us listing and cash pactions, believes that these enterprises themselves are in a large and fast growing industry, and at the same time, they are naturally popular in such a market as Chinese investors are concerned about.

"At present, it is very difficult for the world to find a country that maintains rapid economic growth like China, and with the advantages of its own industry, investors will surely remain concerned."

Cutler told China Securities Journal that the number of Chinese companies going public in the United States this year will exceed that of last year, and the momentum will continue.

Wall Street hedge fund Ironfire capital company executive Eric Jackson also predicted that more Chinese Internet companies will be listed in the US in the future.

Jackson believes that it is reasonable for Chinese Internet companies to attract so much attention. Investors will not overlook the size of China's potential Internet users more than 1 billion and its close to two digit economic growth.

He also said that in the long run, the overvaluation of these enterprises will not be a problem.

According to the twenty-seventh China Internet development survey report released by CNNIC in January, as of the end of December 2010, the number of Internet users in China reached 457 million, an increase of 73 million 300 thousand compared with the end of 2009.

However, some analysts have warned investors to be cautious. The profitability of some Chinese Internet companies is not satisfactory and the prospects are hard to predict.

Statistics show that despite being touted by investors, Youku, known as "China YouTube", has never had a profit record before listing, and it is not expected to reverse losses in 2011.

Will the bubble repeat itself?

According to investment information website Tickerspy.com data, China Internet stock index, which has been tracked by the website this year, has risen by 56.2%, rising by 18.8% in the past month alone.

In the index tracking stocks, Sina, Baidu and many other enterprises share prices have reached a record high in recent years.

Cutler said that the spirit of Internet entrepreneurship in China is very similar to that of the US Silicon Valley ten years ago, and "this is probably the only source of strength that I can see in my lifetime".

But what is worrying is that when the US internet entrepreneurship broke out ten years ago, there was a bubble gathering and finally broke down.

Will China's Internet companies repeat the same mistakes?

Cutler said the scene should not be replayed in China.

He said that the collapse of the US internet bubble left many lessons, and the most important one is that Internet companies should have a better business model. They can operate successfully regardless of the quality of the year, and ensure certain profits, so as to maintain long-term healthy development of enterprises.

Market size is important, but for enterprises, the key lies in the ability to seize opportunities, control opportunities and execute business models.

On this issue, Zhang Yaqin, chairman of Microsoft Asia Pacific R & D group, believes that China's Internet industry itself has no bubble, but there is a big bubble for valuation and mentality of Internet companies.

At present, many overseas listed Internet companies are still in a state of loss.

But with a solid industrial foundation, the so-called "Internet bubble 2" will not be as scary as it was in 2000.

Robin Li, chief executive officer of search engine giant Baidu Inc, cautioned that "listing is not an end, but a means of enterprise development".

He believes that for the China Internet Corporation that is close to the market, it is a good opportunity now. It is expected that this year the Internet companies in China will usher in a wave of overseas listing.

But he also pointed out that the market is overheating at present.

Recent performance of China Internet stocks listed in the US

Company name listing date IPO issue price financing amount latest stock price

(stock code) (US $) (US $million) (US dollars)

SouFun net (SFUN) 2010.9.17 42.5 124.66 22.78

Easy car net (BITA) 2010.11.17 1212710.84

Youku (YOKU) 2010.12.8 12.8203 62.85

Dangdang network (DANG) 2010.12.8 1627224

Qihoo 360 (QIHU) 2011.3. 3014.5176 32.12

Century interconnection (VNET) 2011.4.21 1515618.8

Note: 1, the amount of financing does not count for green shoes; 2, the latest stock price closes as of April 21st.