Xinhuanet applies for Shanghai IPO
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E-mail China.org.cn, January 8, 2013
Xinhuanet, the online portal of China's state-run Xinhua news agency, has applied for a Shanghai initial public offering, according to China’s securities regulator.
Xinhuanet's application for the IPO program with China International Capital Corp as the underwriter is being processed by the China Securities Regulatory Commission (CSRC), the regulator said on its website.
The CSRC did not state when the IPO would happen and how much money it aims to raise.
Xinhuanet.com's IPO, if approved, may attract investor interest as the website could bring significant yields through advertising revenues and other sources that many of its competitors do not have.
Xinhuanet releases news items 24 hours a day in Chinese, English, French, Spanish, Russian, Arabic and Japanese, using multimedia communication including text messages, blogs and videos, according to Xinhuanet.com.
Xinhuanet is a "central news service-oriented website, an important information organ of the central government, and an important platform of building up China's online international communication capacity", according to Xinhuanet.com.
Xinhuanet began transforming itself from a government cultural institution to an enterprise in 2010, operating as Xinhua Network Corp Ltd. In May 2011, Xinhuanet Corp Ltd was officially established, according to Xinhuanet.com.
"Xinhuanet, once approved to launch an IPO, may become another People.cn in terms of attracting investor interest, as the two Internet portals share many things in common," said Liang Wenbo, analyst with Shanghai Zhijing Investment Co.
People.cn, the online portal of People's Daily, went public in April 2012. It attracted pre-IPO investment from State-owned enterprises and its shares opened 55 percent higher on the first day of trading.
As many as 32 enterprises have applied for IPOs in the first week of 2013, increasing the number of enterprises waiting for approval to 882 by Friday.
It was the largest number of enterprises applying for IPOs since April 2012 when 64 enterprises submitted applications within a week.
China's A-share market has not seen any enterprise going public since October 2012.
The CSRC said it has restarted scrutinizing financial reports and the application materials of IPO applicants. Enterprises that have not passed the examinations will be disqualified from going public, according to the CSRC.
The decision is aimed at spotting unqualified applicants to shorten the waiting list for IPOs and to ease the pressure on the A-share market, according to the China Securities Journal.
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