Chinese IPOs: Looks Like the Top
I noted last week that recent Chinese IPOs have been hot out of the gate, and faded fast.
This week, we have three more IPOs from China, and now...they're not even hot out of the gate.
Tomorrow (Wednesday), China Zenix Auto International (ticker: ZX), the largest commercial wheel manufacturer in China, will begin trading at the NYSE, while Jiayuan.com International (ticker: DATE), the largest online dating platform in China (think Match.com of China), will begin trading at the Nasdaq.
Thursday, Phoenix New Media (ticker: FENG), a new media company providing premium content on an integrated platform across Internet, mobile and TV channels in China, will also begin trading.
Traders are hearing that none of these companies are likely to price, or open, at dramatic premiums. No price talk of $10-$12 two days before, then pricing at $16, and opening at $20. We're talking about small pops of a point or two, if that.
The bloom started coming off the rose last week. On Thursday NetQin , which makes Internet-security software, priced at $11.50 and closed at $9.30 on its first day of trading; it's trading below $8 today.
What happened? A lot more scrutiny of some of the metrics being provided by Chinese companies, and a general exhaustion with the sheer number that have gone public in the past month or so.
Since May 1, 2010, Chinese IPOs have accounted for 41 of the 161 IPOs that have gone public, David Menlo at IPOFinancial.com pointed out to me...that's 25 percent.
Maybe they'll get more excited about U.S. companies now! LinkedIn is going public next week.
Look at the performance of these recent Chinese IPOs since their first day of trading:
Dangdang | down 26%
21Vianet | down 22%
Qihoo 360 | down 22%
Renren | down 18%
Youku.com | up 65%
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