LightInTheBox Holding Co. (LITB) surged in New York trading after the Beijing-based online retailer raised $78.9 million in the first initial public offering in the U.S. by a Chinese company this year.
The American depositary receipts jumped 22 percent to $11.61 today after being priced at $9.50 each, within the company’s target range of $8.50 to $10.50. The ADRs, each representing two ordinary shares of LightInTheBox, soared as much as 34 percent to $12.69 earlier.
LightInTheBox has become the second Chinese e-commerce company to complete a U.S. IPO in 15 months, after Vipshop Holdings Ltd. (VIPS) raised $71.5 million in March 2012. The number of initial offerings by Chinese companies declined to three last year, from 13 in 2011 and 38 in 2010, data compiled by Bloomberg show. Allegations by short sellers such as Muddy Waters LLC against Chinese targets have deterred companies from selling shares in the past two years.
“Valuations relative to growth looked reasonable,” Eric Brock, who helps oversee $4.2 billion as a portfolio manager at Clough Capital Partners, said by e-mail from Boston. “It’s a small deal and well executed. Its different business model reminds people of Vipshop,” he said, adding he bought the company’s shares in the offering.
Vipshop, a web retailer for fashion goods based in Guangzhou, China, are trading at $29.46, more than four times the initial price.
The IPO price valued LightInTheBox’s outstanding stock at $465 million, or almost 2 times sales of $236 million in the 12 months through March 31.
LightInTheBox is the first Chinese company to complete a U.S. IPO after social network operator YY Inc. (YY)’s offering in November. YY’s shares have more than doubled from its IPO level of $10.50.
More Chinese Internet companies are expected to seek listings in overseas markets this year, including Alibaba Group Holding Ltd., the world’s biggest online retailer, and Qunar.com, an online travel service owned by Baidu Inc., according to 86Research Ltd.
LightInTheBox sells lifestyle products manufactured by Chinese companies to customers, mainly in Europe and North America, through websites including lightinthebox.com and miniinthebox.com. The company will use proceeds from the IPO for technology infrastructure, expanding product offerings, marketing and bond interest payments, it said.
“We leverage the supply chain in China and use the Internet to directly connect with global consumers,” Chief Executive Officer Alan Guo said in a telephone interview from New York yesterday. “Traditionally China has been strong in manufacturing, but there hasn’t been many companies that became a retail company facing global consumers.”
The company, founded in 2007, narrowed its net loss to $4.2 million last year from $24.5 million in 2011, it said in a filing yesterday. For the first three months this year, it posted net income of $2.6 million.
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