By Phil Wahba
NEW YORK, Oct 16 (Reuters) - China Real Estate Information Corp shares debuted strongly, rising as much as 19.5 percent Friday, and breaking a streak of poor debuts by newly U.S.-listed Chinese stocks, as investors sought to get a piece of the country's real estate market.
After American depositary shares started trading on the Nasdaq at $12.32, or 2.7 percent above the IPO price, they continued to rise, at one point touching $14.34.
The shares gained $2.20 over their IPO price, closing the day up 18.3 percent. On average, U.S.-listed IPOs this year have risen 11.1 percent on their first day of trading, according to Thomson Reuters data.
Shanghai-based China Real Estate operates a database on about 38,200 developments or buildings and 24,200 parcels of land for development in 56 cities in China.
'China Real Estate looks like it will dominate its niche and with Chinese stocks you tend to have good growth and lower debt loads than with U.S. companies,' said Francis Gaskins, president of the research firm IPO Desktop.
The debut contrasts with the performance of the three most recent Chinese companies to complete a U.S.-listed IPO; video games maker Shanda Games, CDC Software and Chemspec International Ltd. Each has fallen by at least 17 percent since their respective IPOs earlier this year.
But China Real Estate Information is benefiting from U.S. investors eager to get in on China's real estate market, analysts said.
'You get exposure to the Chinese real estate market, which is expected to grow,' said Nick Einhorn, an analyst with Connecticut-based research firm Renaissance Capital. 'Just writing 'China' on your front cover does not guarantee success anymore.'
China Real Estate's Chief Executive Xin Zhou conceded the company could be vulnerable if the boom turns out to be a bubble.
'We expect upward growth for China real estate, but even on this upward path there will be volatility from time to time; it's hard to avoid,' said Xin.
The company, a Shanghai-based unit of real estate services company E-House China Holdings Ltd, raised $216 million in its IPO on Thursday after selling 18 million American depositary shares for $12 each, within the estimated range of $11.80 to $13.80.
The company said in a prospectus it plans to buy the online real estate business operated by Sina Corp, a Chinese media company which in turn will acquire a large stake in China Real Estate Information following the IPO. E-House will remain its parent company and controlling shareholder after the offering.
China Real Estate revenues rose 61.8 percent to $31.2 million in the first six months of 2009 from the year-earlier period, with net income of $11 million.
(Reporting by Phil Wahba, editing by Dave Zimmerman, Leslie Gevirtz, Gunna Dickson and Richard Chang) Keywords: CHINAREALESTATE/DEBUT (phil.wahba@thomsonreuters.com; +1 646 223 6128; Reuters Messaging: phil.wahba.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
NEW YORK, Oct 16 (Reuters) - China Real Estate Information Corp shares debuted strongly, rising as much as 19.5 percent Friday, and breaking a streak of poor debuts by newly U.S.-listed Chinese stocks, as investors sought to get a piece of the country's real estate market.
After American depositary shares started trading on the Nasdaq at $12.32, or 2.7 percent above the IPO price, they continued to rise, at one point touching $14.34.
The shares gained $2.20 over their IPO price, closing the day up 18.3 percent. On average, U.S.-listed IPOs this year have risen 11.1 percent on their first day of trading, according to Thomson Reuters data.
Shanghai-based China Real Estate operates a database on about 38,200 developments or buildings and 24,200 parcels of land for development in 56 cities in China.
'China Real Estate looks like it will dominate its niche and with Chinese stocks you tend to have good growth and lower debt loads than with U.S. companies,' said Francis Gaskins, president of the research firm IPO Desktop.
The debut contrasts with the performance of the three most recent Chinese companies to complete a U.S.-listed IPO; video games maker Shanda Games, CDC Software and Chemspec International Ltd. Each has fallen by at least 17 percent since their respective IPOs earlier this year.
But China Real Estate Information is benefiting from U.S. investors eager to get in on China's real estate market, analysts said.
'You get exposure to the Chinese real estate market, which is expected to grow,' said Nick Einhorn, an analyst with Connecticut-based research firm Renaissance Capital. 'Just writing 'China' on your front cover does not guarantee success anymore.'
China Real Estate's Chief Executive Xin Zhou conceded the company could be vulnerable if the boom turns out to be a bubble.
'We expect upward growth for China real estate, but even on this upward path there will be volatility from time to time; it's hard to avoid,' said Xin.
The company, a Shanghai-based unit of real estate services company E-House China Holdings Ltd, raised $216 million in its IPO on Thursday after selling 18 million American depositary shares for $12 each, within the estimated range of $11.80 to $13.80.
The company said in a prospectus it plans to buy the online real estate business operated by Sina Corp, a Chinese media company which in turn will acquire a large stake in China Real Estate Information following the IPO. E-House will remain its parent company and controlling shareholder after the offering.
China Real Estate revenues rose 61.8 percent to $31.2 million in the first six months of 2009 from the year-earlier period, with net income of $11 million.
(Reporting by Phil Wahba, editing by Dave Zimmerman, Leslie Gevirtz, Gunna Dickson and Richard Chang) Keywords: CHINAREALESTATE/DEBUT (phil.wahba@thomsonreuters.com; +1 646 223 6128; Reuters Messaging: phil.wahba.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
