Real estate services firm up 18% from Nasdaq IPO

By Zhao Qian

The share price of China Real Estate Information Corp (CRIC) rose 18 percent from its initial public offering (IPO) Friday, spurred on by investors' confidence in China's market.

The real estate database and Internet services firm's stock closed at $14.20 on its first day of trading, up from its offering price of $12.28.

CRIC is the first Chinese company to have a spin-off listing in the US after its shareholders, E-House (China) and Sina, that have already had IPOs in the US.

CRIC, whose underwriters are Credit Suisse and UBS AG, sold 18 million American Depositary Receipts at $12 a share, and raised $216 million from the IPO.

Before the IPO, there were concerns that the company would perform badly on the Nasdaq, especially after Chinese online game firm Shanda flopped in September, according to a report by the Wall Street Jounal.

Shanda, whose share price fell 14 percent on its first day of trading, was still below its $12.50 IPO price when it closed at $10.32 Friday.

There were also concerns that US investors would not be optimistic about the real estate market due to the subprime crisis.

"The foreign investors see potential in the Shanghai-based company," Li Zhanjun, director of E-House (China) R&D Institute, told the Global Times yesterday, "because they have confidence in its services relating to China's red hot real estate industry," he said.

The real estate industry has entered a recovery period as property sales and investment surged, according to the National Bureau of Statistics.

Cao Guowei, CEO of Sina, said the good performance of CRIC on the Nasdaq will help the company find more commercial opportunities on the Internet.

"This IPO may be related to Sina's management buyout (MBO), because Sina officials need to prove that their MBO was the right move by showing a share price increase," Fang Xingdong, an Internet analyst, was quoted by Netease as saying .

Wang Ran, CEO of China eCapital, was quoted by the 21st Century Business Herald as saying that as this spinoff is a new type of listing for a Chinese company, it is uncertain if it will be well received by the overseas market in the future.
 

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