SouFun plans overseas float next year
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Real estate website SouFun Holdings is planning to list its shares in the US capital markets in the first half of next year, sources close to the matter told China Daily yesterday.
"With the property market reviving and sector competition intensifying, a public listing is vital for SouFun. The company will strive to finish the listing process in the first six months of 2010," the source said.
SouFun shareholders have already cleared the public float plan. The company had charted IPO plans in 2008, but deferred these due to dismal market conditions.
At that time the company had thought of floating its shares on the Hong Kong bourse. "The company will now float its shares in the US instead of Hong Kong."
SouFun's largest shareholder Australian telephone firm Telstra Corp Ltd said in a statement late on Tuesday that it intends to sell its stake in the company. Telstra had earlier paid $254 million for a 51 percent stake in the property portal.
"Telstra proposes to sell down its shareholding as part of SouFun's IPO plan. Subject to regulatory requirements, further details will be provided as the process proceeds," the statement said.
"China's real estate sector is still quite attractive for overseas investors and that has been amply demonstrated by China Real Estate Information Corp (CRIC) shares' strong NASDAQ debut in October," said Grant Ji, director of Savills (Beijing), a UK-based real estate service provider.
Shanghai-based CRIC raised nearly $216 million in its IPO after selling 18 million American depositary shares for $12 each. Its shares rose nearly 19.5 percent on the first day of trading, breaking a streak of poor debuts by newly US-listed Chinese stocks.
Telstra is betting on the IPO to provide high growth opportunities for its Sensis advertising business, which currently manages SouFun.
According to Sol Trujillo, Telstra's CEO, SouFun provides an attractive entry point into China and helps Sensis to leverage core capabilities into a larger, faster growing and less mature market than Australia.
SouFun Holdings reported a 88 percent growth in full year profits last year and said it expects 50 percent growth this year. Given that online companies attract multiples of 20 times earnings, the company could achieve a valuation of $1 billion, industry experts said.
SouFun, established in 1999, provides information, advertising and listing services to China's growing online real estate and home furnishings and improvement sectors. Online advertising currently generates about 60 percent of its total revenue.
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