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Chinese online travel service provider eLong Inc, partially owned by US online travel service giant IAC/Interactive Travel Corp, aims to make an initial public offering (IPO) on the high-tech-laden NASDAQ stock market in New York.
It is to further expand business and strengthen its competitiveness against arch-rival Ctrip.
The Beijing-based company said in a statement filed to the US Securities and Exchange Commission on Thursday that the company and some shareholders intended to issue 4.385 million American depository shares (ADSs), or 8.770 million ordinary shares, on the NASDAQ under the quote of LONG.
The ADSs will be priced between US$11.5 to US$13.5 and raise as much as US$59.20 million from the IPO.
But the exact IPO date has yet to be decided.
Deutsche Bank Securities and WR Hambrecht + Co underwrite the IPO and are authorized to sell up to 657,774 ADSs to cover overallotments.
Justin Tang, eLong chairman and chief executive officer, said he was working on the IPO in the United States now and declined to make further comments on the offering.
ELong said in its prospectus that the net proceeds will be used for general purposes, including working capital, capital expenditure or mergers and acquisitions.
The company operates one of the largest online travel service networks and some other affiliated websites including Xici.net, a popular bulletin board system website in China.
Its revenues for the first six months were US$7.3 million with a 146 percent year-on-year increase.
Michael Yin, a Shanghai-based Internet industry analyst, believed the IPO will help eLong further consolidate its position in the Chinese online travel service market, after being invested by the US company IAC in July.
ELong enjoys a good reputation in China and ranked 2,116th among the most popular websites in the world on Friday, while its arch-rival Ctrip ranked the 114,791th, according to the Internet traffic monitoring website Alexa.
However, eLong was believed to lag behind Ctrip.
James Liang, chief executive officer of Ctrip, said that one of the biggest benefits that Ctrip's NASDAQ listing last year brought was that Ctrip's profile among users was greatly elevated.
"Before, both Ctrip and eLong competed for the number one online travel service website in China, now more and more people believe we are," said Liang.
In July, IAC acquired 30 percent of eLong's stakes with US$60 million and it also got the right to boost the percentage to 52 percent.
Yin believed that besides capital, the IAC investment might also help eLong be accepted by US investors.
Online travel service providers, with some US references like Expedia under IAC and Travelocity, will be easier for investors to understand.
Ctrip has been one of the most steadily performing Chinese-Internet-concept stocks on the NASDAQ, while some others suffered from ups and downs sometimes due to unsuccessful communications with investors.
Shanghai-based human resource service provider 51job Inc was listed on the NASDAQ on September 29 and its stock price jumped about 50 percent on the first day. It was believed that successful references helped investors realize the firm's value.
According to Shanghai iResearch Ltd, a professional Internet market consulting firm, the online travel service market reached 500 million yuan (US$60 million) last year and was forecast to grow by 62 percent this year to 810 million yuan (US$97.83 million).
(China Daily October 9, 2004)
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