Three profitable Chinese companies are expected to have powerful market debuts this week as they impress investors with balance sheets and earnings that are stronger than many debt-heavy U.S. companies.
While U.S. ventures borrowed money or found funding in highly leveraged private-equity deals in recent years, Chinese companies have logged revenue growth with little debt amid a better economy overseas, said Francis Gaskins of IPOdesktop.
"We're seeing the largest number of Chinese initial public offerings in a single week than we've had in recent memory, and I expect we're going to have many more next year," Gaskins said.
Chinese IPOs are garnering more attention and respect now than they ever have, said IPOfinancial President David Menlow.
"Certainly, investors make a positive distinction when it comes to this class of stocks," Menlow said. "It's almost as though the Chinese shares coming to the market can do no wrong."
As of last week, the top three IPO performers on a percentage basis this year were out of China: water-treatment equipment maker Duoyuan Global Water Inc., online gaming company Changyou.com Ltd. and magnet wire maker Lihua International Inc.
Still, not all Chinese deals have been a slam dunk. Investors were rattled by some earlier IPOs of Chinese companies, particularly the September debut of online gaming company Shanda Games Ltd., which raised $1 billion in one of the year's biggest IPOs but whose stock has fallen more than 23 percent. Too many shares were offered and the price was too high, according to John Fitzgibbon Jr., founder of IPO Scoop, which tracks IPOs.
"When it comes to putting money down, investors are still looking at the companies on a case-by-case basis," Fitzgibbon said, adding that he expects strong debuts this week because the companies are profitable and are in high demand.
The most attractive deal this week, analysts said, is Beijing-based Concord Medical Services Holdings Ltd., which operates a network of radiotherapy and diagnostic imaging centers in China. The company has already raised its price range on high demand to $10 to $12 from its original expected price of $9 to $11. Concord Medical hopes to raise as much as $158.7 million. Shares are expected to start trading Friday under the symbol "ACOM" on the New York Stock Exchange.
Meanwhile, Trony Solar Holdings Co. plans to raise as much as $241.5 million. The company, which is expected to price shares between $9 and $11 and trade on the NYSE under the symbol "TRO" beginning Thursday, is one of China's biggest makers of solar energy and wind power equipment.
China Nuokang Bio-Pharmaceutical Inc., which specializes in blood and cardiovascular treatments, said it hopes to raise $69 million, pricing shares between $10 and $12 to trade under the ticker symbol "NKBP" on the Nasdaq Thursday.
Telecommunications company Linkage Technologies International Holdings Ltd. was also expected to go public this week, but in a statement late Sunday announced it would be acquired by AsiaInfo Holdings Inc. and would not pursue the IPO.