Autohome Jumps in U.S. Debut as NQ Falls: China Overnight

Autohome Inc. (ATHM), a Chinese automobile information website, jumped in its first day of trading in New York, on prospects the company will benefit from growing vehicle sales in the world’s biggest new car market.

American depositary receipts of the Beijing-based company surged 77 percent to $30.07. Autohome sold 7.8 million American depositary receipts for $17 apiece, higher than its initial target range of $12 to $14, according to its filings. The Bloomberg China-US Index of the most traded Chinese stocks in the U.S. sank 3.9 percent to 104.51, led by state companies, on speculation leaders may cut the country’s growth target at their annual central economic conference.

China, which became the world’s largest new car market in 2008 and had a total of 19.3 million units in 2012, is expected to see demand rise 10 percent annually during the next seven years, according to the China Association of Automobile Manufacturers. Chinese companies are selling shares in New York at the fastest pace in two years less than two months after short seller Carson Block’s call spurred a 51 percent plunge in Beijing-based NQ Mobile Inc.

“The company has very strong revenue growth, and it’s good for U.S. investors who are looking to getting access to growth in domestic China with huge potential,” Josef Schuster, the founder of IPOX Schuster LLC in Chicago, an IPO research firm, said by phone yesterday. “Institutional investors have digested those kind of negative news and they are looking more like it’s an individual IPO.”

ETF Sinks

Autohome joins China’s 58.Com Inc. (WUBA), an online marketplace similar to Craigslist, and travel agency Qunar Cayman Islands Ltd. (QUNR), in raising more funds than expected at share offerings.

Autohome’s net revenue jumped 63 percent for the first nine months of this year from a year earlier to $135.7 million, according to the company’s filing. Its website had an average of 5.7 million daily unique visitors from personal computer users, the largest among peers in China, according to iResearch data cited in the document.

“We are just in the beginning of monetizing the strength in the new car market,” said James Qin, Chief Executive Officer of Autohome in a phone interview in New York yesterday. “We’ve built a dominate position in the desktop business, going forward, we need to invest heavily to make sure we have a dominant position on the mobile Internet.”

The iShares China Large-Cap ETF, the largest Chinese exchange-traded fund in the U.S., tumbled 3.3 percent in a third day of declines to $38.53 in New York. The Standard & Poor’s 500 Index slipped 1.1 percent after a Congressional budget accord fueled speculation that the Federal Reserve could trim stimulus next week.

Short Interest

NQ Mobile (NQ), an Internet security service provider, slumped 4.6 percent to a one-month low of $11.30, after plunging as much as 11 percent. Short interest, or shares borrowed and sold on expectations they will fall, rose to 14.1 million shares as of Nov. 29, from 13.8 million two weeks earlier, according to exchange data released yesterday.

The company has lost more than half of its market value since Oct. 23, the day before Muddy Waters LLC said the company was “a massive fraud” and the shares are worth less than $1. Investors including Altimeter Capital Management LLC and Oberweis Asset Management Inc. have increased their holdings, setting the stage for a showdown between bulls and bears as NQ says its accounting and businesses are legitimate.

Kim Titus, a Dallas-based spokesman with NQ Mobile, declined to comment immediately when contacted by phone by Bloomberg News.

Toro Investment Partners LP, a hedge fund based in San Francisco, has added holdings in NQ Mobile since Nov. 12, when it disclosed that it held a 5 percent stake in NQ, Chief Investment Officer Taek-Geun Kwon wrote in an e-mail reply to questions yesterday.

‘Some Angst’

China’s government may cut its 2014 economic growth target to 7 percent from 7.5 percent at the conference which ends tomorrow, the Economic Information Daily reported Dec. 4. Policy makers should phase out proactive fiscal stimulus, the China Securities Journal said in a front page commentary yesterday.

The conference “is causing some angst about how they will grow the economy at that speed in 2014,” Jeff Papp, a Lisle, Illinois-based senior analyst at Oberweis, which oversees $700 million in assets, said in an e-mail yesterday. Investors are “lacking conviction that the government will reform China for the better.”

Yanzhou, Chalco

ADRs of Yanzhou Coal Mining Co. (YZC), China’s fourth-largest producer of the fuel, tumbled 7.9 percent, leading declines among companies on the China-US gauge. The ADRs dropped to $9.21, trading 5.8 percent lower than its Hong Kong stock.

China Life Insurance Co. (LFC), the nation’s biggest insurer, dropped 5.2 percent to $46.80 in New York, the largest retreat since October 2012. Aluminum Corp. of China Ltd., the country’s biggest producer of the metal, slumped 5.4 percent to $8.58, sliding the most since June.

The Hang Seng China Enterprises Index in Hong Kong sank 2.7 percent to 11,073.93, slumping the most since August, while the Shanghai Composite Index (SHCOMP) fell 1.5 percent to a two-week low of 2,204.17.

To contact the reporter on this story: Belinda Cao in New York at lcao4@bloomberg.net

To contact the editor responsible for this story: Tal Barak Harif at tbarak@bloomberg.net

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