Overseas-listed Chinese Firms to Come Home.doc

1、1Overseas-listed Chinese Firms to Come HomeQihoo 360， Momo to Delist from U.S. market Chinese security market is on fire. No wonder more and more overseas-listed Chinese companies are mulling plans to list back in China. Qihoo 360 Technology Co Ltd， which listed on the New York Stock Exchange （NYSE）

2、 in the U.S. under the ticker QIHU as the first Chinese Internet security company four years ago， is just one of them. On June 17， Qihoo 360s chairman Zhou Hongyi sent a letter to the staff， saying that he and Qi Xiangdong， the com-panys president， decided to launch the privatization plan after much

3、 thought and consideration aiming at a better development of the company. The privatization of a listed company means that its founders or other investors form a consortium to buy out all its outstanding shares and then make the company delist from the capital market. Under Zhous plan， CITIC Securit

4、ies， Shenzhen-based private equity fund Golden Brick Capital， Zhejiang Huaxing Holding Group， and Sequoia Capital China， as well as Zhou 2himself， will form a deeppocket consortium to buy out all outstanding shares in Qihoo 360. Zhou alone owns around 16% stake in the technology company. If Qihoo 36

5、0 succeeds in going private， it would be “the largest take-private deal of a U.S.-listed Chinese company”， the Wall Street Journal reported. Qihoo 360s move to delist from the New York Stock Exchange is also out of the consideration of the companys further development， according to an insider. As a

6、tech company that started out providing anti-virus solution provider and now offers a range of mobile and internet services， Qihoo 360 is not particularly known in the U.S. The tech company has struggled to manage its image outside its home turf. Delisting from the U.S. bourse and going public domes

7、tically will be a better option for Qihoo 360 to raise funds and expand its presence. Just six days later， Momo Inc.， Chinese leading mobile social networking software developer and service provider that debuted on NASDAQ under the ticker MOMO a half year ago， announced that co-founder Tang Yan， Mat

8、rix Partners China II Hong Kong Limited、Sequoia Capital China Investment Management L.P and Huatai Ruilian Fund Management jointly proposed to 3scoop up all outstanding shares and take the company private. Privatization Waves Qihoo 360 and Momo are the latest overseas-listed Chinese companies to ret

9、urn to the home market， following film distributor Bona Film Group Limited （NASDAQ： BONA） ， social networking platform Renren Inc. （NYSE： RENN） ， data center services provider 21Vianet Group （NASDAQ： VNET） ， mobile game provider China Mobile Games and Entertainment Group Limited （NASDAQ： CMGE） ， Tao

10、mee Holdings Ltd （NYSE： TAOM） ， Sungy Mobile Limited （ NASDAQ： GOMO） ， Xueda Education Group （NYSE： XUE） ， Jiayuan. com International Ltd. （NASDAQ： DATE） and E-House（China） Holdings Limited （NYSE： EJ）. Among them， Qihoo 360 is the largest company by market valuation and also the most influential tec

11、h company. According to the estimation from analysts at investment bank China International Capital Corporation （CICC） ， if Qihoo 360 relists in China， its market valuation would reach around 61.3 billion dollar. According to Bloomberg data， a total of 23 U.S.-listed Chinese companies have received

12、privatization offers by far. Undoubtedly， a wave of privatization of overseas-listed Chinese companies has come. 4“It is just a beginning. More and more U.S.-listed Chinese companies will delist from the U.S. capital market in the future， as they believe the U.S. market is really not recognizing the

13、 true value of their business potential， ” an investor says.“Over 80% of U.S.-listed Chinese companies are expected to return home.” The privatization spree is undoubtedly driven by the resurgent Chinese financial market. Over the past half year， valuations of Chinese companies listed on the country

14、s start-up board ChiNext and over-the-counter（OTC） market New Third Board have significantly soared. Many believe that Chinese stock market is on a huge bull run and foreign-traded companies are hoping to fetch much higher valuations by relisting in China. A capital market boom， coupled with increas

15、ed private equity， has made the ideal of listing domestically more appealing than being public in the U.S. Besides， the Chinese government also has been relaxing its grip on the financial market， making it more conducive for local players wishing to raise funds. In fact， some securities companies an

16、d Shanghai Stock Exchange started to discuss how to lure U.S.-listed Chinese companies back home as early as two 5years ago. “At that time， overseas-listed Chinese companies were traded at low valuations and they also wanted to return to the domestic capital market， ” Wang Jun， an employee at a securities company. “However， the policies and market environment were not so favorable.”