Qunar Cayman Islands Ltd. (QUNR), the Chinese travel-booking service controlled by Baidu Inc. (BIDU), surged on its first day of trading after raising $167 million in a U.S. initial public offering that priced above a marketed range.
Qunar, which means “where to go” in Chinese, jumped 92 percent to $28.75 at 2:17 p.m. in New York. The company sold 11.1 million American depositary receipts at $15 apiece, higher than its initial target of $9.50-$11.50, which was later boosted to as much as $14, according to filings of the Beijing-based company. Goldman Sachs Group Inc., Deutsche Bank AG and Stifel Financial Corp. managed the offering.
The share sale is the second U.S. IPO by a Chinese company this week to price above its marketed range after 58.Com (WUBA) Inc, underscoring investor confidence in Chinese debuts even as Muddy Waters LLC said Beijing-based security software maker NQ Mobile Inc. (NQ) had inflated sales. Baidu, operator of China’s largest search engine, purchased in 2011 a majority stake in Qunar, which reported a net loss of $2.8 million in the first six months this year.
“Short term, we are going to focus on market share as well as cash flow balance,” Cc Zhuang, chief executive officer and co-founder of Qunar, said in a phone interview in New York. “We are trying to build something that can generate long-term profitability.” Being controlled by Baidu means that “if we have a new product, we can go through the Baidu search engine and easily get through to the customers,” he said.
Qunar’s sales jumped 75 percent from a year earlier to 358.8 million yuan ($58.5 million) for the six months ended June 30, while its net loss narrowed from 64 million yuan a year earlier, according to the company’s IPO prospectus.
The number of Qunar’s active web users grew to 31.4 million for the 12 months through June, from 12.6 million in 2010, the company said in its filing.
58.Com, which raised $187 million in its IPO yesterday, priced its sale of 11 million ADRs at $17 apiece, higher than its initial target range of $13 to $15. Web retailer LightInTheBox Holding Co. raised $91 million in June, followed by China Commercial Credit Inc. and Montage Technology Group Ltd.