Tuniu’s IPO on Nasdaq raises $72m
Updated: 2014-05-10 01:07
By JACK FREIFELDER in New York (China Daily USA)
Tuniu Corp, a popular Chinese online leisure-travel company, rose more than $1 in its first day of trading on the Nasdaq Stock Exchange, and raised $72 million in its initial public offering on Friday.
Conor Yang, Tuniu's CFO, said it had been a busy week for the Nanjing, Jiangsu province-based company, but that he and his colleagues are now focused on attracting the right investors to grow the business.
"In this online space, leisure travel is basically Tuniu and CTrip as the two major players," Yang said Friday in an interview with China Daily. "We ranked No 1 in the online organized tour market in China, and CTrip was No 1 for self-guided tours. It's a very fragmented market and we do see the opportunity for a leader like us to continue to contend and increase our market share."
"I think that people see so many deals coming out now, even from China, so for investors you need to have a very simple story and proposition to attract interest," he said.
Tuniu offers a wide array of travel-related services and packaged tours through its online and mobile platforms. The company's products cover more than 70 countries worldwide, including many popular tourist destinations in China.
Tuniu priced its IPO of 8 million shares at $9 per share, the bottom end of its $9 to $11 range. The stock — which trades under the ticker symbol TOUR — opened at $9 and hit a high of $10.64 in the early afternoon before closing at $10.07, an increase of nearly 12 percent.
Tuniu's IPO came during a busy week for Chinese companies seeking to go public in the US.
On Thursday, Cheetah Mobile Inc — a Beijing-based Internet and mobile phone security application maker — raised $168 million in a listing on the New York Stock Exchange. On Tuesday, Chinese e-commerce conglomerate Alibaba Group Holdings Ltd filed to go public in an IPO that could be the largest ever, possibly exceeding $20 billion.
Managing the Tuniu deal were Morgan Stanley & Co, Credit Suisse Securities LLC and China Renaissance Securities.
Josef Schuster — founder of Ipox Schuster LLC, a Chicago-based independent financial-services firm specializing in global IPOs — said the timing of Tuniu's listing made sense.
"May is a good time to do an IPO because the IPO window is slowly closing," Schuster said Friday in an interview with China Daily. "June, July and August are probably seasonally weak, just because many bankers are on holiday."
"For the company what matters is can they get a good valuation at the current level," he said. "The beauty of the online business is that the underlying fixed cost component is relatively small, and if they grow to a certain point it can be a highly profitable business."