Mecox Lane Ltd. raised $129 million pricing its initial public offering above the forecast range in the latest sign of surging demand for U.S. IPOs of Chinese Internet companies. The shares rallied 57 percent.
The Shanghai-based online retailer sold 11.7 million American depositary receipts for $11 each yesterday, after offering them at $8 to $10 apiece, a filing with the Securities and Exchange Commission and a company statement showed. Mecox Lane climbed $6.26 to $17.26 in Nasdaq Stock Market trading.
The initial sale came after companies from China posted six of the ten largest gains among U.S. IPOs this year, according to data compiled by Bloomberg. ChinaCache International Holdings Ltd., the Beijing-based provider of Internet content to businesses, this month posted the biggest first-day rally for a U.S. IPO in three years after the number of Internet users in China surpassed the American population.
“The growth trajectory is so good that people try to extrapolate that trajectory out to certain levels,” said Darren Fabric, Chicago-based managing director at IPOX Capital Management LLC, which oversees $3 billion. “People are willing to pay up for growth.” IPOX bought shares in Mecox Lane’s IPO.
Credit Suisse, UBS
Credit Suisse Group AG and UBS AG of Zurich led the offering. Mecox Lane, which sells products from its Euromoda and Rampage brands as well as third-party brands such as Adidas and Li Ning, will use the proceeds to help improve its e-commerce infrastructure, expand store growth, and build part of a new logistics center and warehouse, the prospectus said.
The company’s sales climbed 42 percent to $108 million in the first half of 2010 compared with a year earlier, the SEC filing showed. China had an estimated 420 million Internet users at the end of June, an increase of 36 million from six months earlier, according to data from the government-sponsored China Internet Network Information Center. The U.S. population is about 311 million, according to the Census Bureau’s website.
China’s economy will grow 9.6 percent in 2011, according to estimates from the Washington-based International Monetary Fund. That compares with 2.2 percent for developed nations and 2.3 percent forecast for the U.S.
“We’ve demonstrated our ability to deliver growth,” Alfred Gu, Mecox Lane’s chief executive officer, said in a telephone interview from the Nasdaq in New York. “The Chinese economy has been growing fast for the past 10 years, and we’re very confident that it will do well in the coming years. In lots of industries, there are emerging opportunities.”
ChinaCache jumped 95 percent on Oct. 1 after raising $84 million pricing its IPO above the forecast range. The company sold $97 million of shares including its overallotment option.
SouFun Holdings Ltd., the Beijing-based operator of China’s largest property website, surged 73 percent on Sept. 17 after selling its $125 million IPO at the top of the forecast range.
“Investors are willing to take on risk only if they see the growth rates that makes it worth that risk,” said Michael Yoshikami, who oversees about $1 billion at YCMNet Advisors in Walnut Creek, California.
This Week’s Offerings
Mecox Lane’s offering was the first of six scheduled for this week after five of last week’s six climbed at least 13 percent in their first day of trading, Bloomberg data show.
The share-price gains were a sign that the IPO market may be rebounding after at least 54 companies withdrew or postponed initial sales this year amid concern that the recovery from the longest recession since the Great Depression was deteriorating. No American company has raised more than $700 million in an initial offering this year, data compiled by Bloomberg show.
The S&P 500 has rallied 16 percent from its 2010 low in July as investors speculated the Federal Reserve will pump more cash into the economy and earnings topped analyst estimates at 86 percent of the companies in the index that have reported third-quarter results since Oct. 7.
Pacific Biosciences of California Inc., the Menlo Park, California-based maker of gene-mapping systems, is seeking to raise $213 million in an offering led by JPMorgan Chase & Co. and Morgan Stanley in New York today, SEC filings show.
First Wind, ExamWorks
First Wind Holdings Inc., the Boston-based developer and operator of wind energy projects backed by D.E. Shaw & Co., will offer 12 million Class A shares for $24 to $26 each tomorrow, filings with the SEC show.
ExamWorks Group Inc., the Atlanta-based provider of medical legal services, is selling 10.3 million shares at $16 to $18 each tomorrow. New York-based Goldman Sachs Group Inc., Credit Suisse and Barclays Plc of London are leading the offering.
SeaCube Container Leasing Ltd., the Park Ridge, New Jersey- based container leasing company, may raise $135 million tomorrow. JPMorgan, New York-based Citigroup Inc., Deutsche Bank AG of Frankfurt and Wells Fargo & Co. in San Francisco are arranging the sale.
Le Gaga Holdings Ltd., a Hong Kong-based vegetable producer, will sell 10.9 million ADRs at $7.50 to $9.50 apiece on Oct. 28. Charlotte, North Carolina-based Bank of America Corp. and UBS are arranging Le Gaga’s offering.