Good Article on China Internet IPOs
Netease Gets China Approval To List On Nasdaq
By Lester J. Gesteland
ChinaOnline News
(2/11/2000) The China Securities Regulatory Commission issued its approval last week for Netease.com, the second most popular website in China, to list on the Nasdaq, the Feb. 10 Hexun Caijing (Homeway Financial News) reported.
Netease sought official approval for the listing in accordance with new regulations being drafted by the CSRC requiring any and all companies doing business in China to get permission from Chinese authorities before listing abroad.
According to Hexun Caijing, Netease will be going public some time next month and Merrill Lynch will underwrite the listing. When contacted, Merrill Lynch would neither confirm nor deny the story.
The report stated that Netease will seek to raise US$100 mln through the offering.
Sohu.com, China?s third most popular website, filed with the U.S. Securities and Exchange Commission for a Nasdaq listing on February 4. It is seeking US$86 mln from its public offering.
Only Netease Has Official Blessing
Sohu has not indicated when it plans to list, however. It has also failed to indicate whether it received a go-ahead from Chinese authorities.
Sina.com, China?s number one website, was expected to list on the Nasdaq early this year, but its listing plans have been stalled due to lack of official approval.
In fact, it seems that Netease is the only "hot" website in China with Beijing?s blessing to list abroad. Why?
CEO Ding Lei: Wary Of Foreign Venture Capital
The answer may lie with Ding Lei, the conservative chief executive of Netease. This company leader does not only give lip service to Wu Jichuan and the controversial regulations of the Ministry of Information Industry ? Ding fervently supports them.
In an interview published in the Nov. 16 Zhongguo Jingying Bao (China Business), Ding ? a man who at that time had yet to venture overseas ? expressed his opposition to the funding of Chinese Internet companies by foreign venture capital.
"Currently, I feel that we may let the domestic Internet companies develop to a certain stage before opening the field to the outside world," he said.
Ding practices what he preaches. Whereas local competitors get much of their funding from abroad (Sina is funded by Softbank and Dell; Sohu by Intel and Dow Jones), Netease had no foreign funding as of the end of last year.
Ding relied mostly on revenues from software sales and advertisements to get the company started. More recently Nestease has also been fueled by proceeds from ecommerce sales of computers, digital cameras and similar products.
The CEO believes strongly in learning to do things first before relying on others. "In my opinion, only after doing something will we have the templates. If we insist on comparing the formats and layouts of Chinese enterprises with those of American counterparts, we will make the mistake of worshiping foreign styles," he said. |
