* 500.com shares rise as much as 70 pct
* Sungy Mobile shares up 44 pct
* Big banks underwriting IPOs add to investor confidence -
(Adds details on IPO market, fund manager comments)
By Avik Das and Aman Shah
Nov 22 Shares of 500.com Ltd and Sungy
Mobile Ltd, surged in their U.S. debuts on Friday, as
investors bet on Chinese technology companies backed by marquee
Investor appetite for Chinese companies seems to have
recovered after a series of accounting scandals in the past
couple of years dried up U.S. listings of China-based companies
in 2011 from a high of 40 in 2010.
"If they (Chinese IPOs) are brought by top-tier
underwriters, then investors are a lot more interested," said
Francis Gaskins, a partner at IPO research company
Deutsche Bank led the offering of online sports-lottery
operator 500.com, while Credit Suisse and JP Morgan were the
lead underwriters for the IPO of mobile applications maker Sungy
Seven Chinese companies have listed in the United States
this year so far compared with just two in 2012.
For a Breakingviews column on Chinese IPOs in the United
In the past couple of years, companies such as timber
producer Sino-Forest Corp and outdoor advertiser China Media
Express were forced to delist due to accounting and corporate
Recently, Muddy Waters Research labeled Chinese mobile
software company NQ Mobile Inc a "massive fraud".
500.com shares rose as much as 70 percent to $22 on Friday
on the New York Stock Exchange, valuing the company at more than
Shares of Sungy Mobile gained as much as 44 percent to
$16.14, giving the company a market value of over $520 million.
BOOMING IPO MARKET
The rousing debuts of 500.com and Sungy Mobile underscore
the resurgence in the U.S. IPO market this year - the strongest
The total IPO issuance so far this year has already exceeded
the 2012 total as equity markets soar, helped by continued
economic growth and the Federal Reserve's efforts to keep
interest rates low.
IPO issuance this year through October totaled $62.1 billion
versus $91.1 billion in 2007, according to the Securities
Industry and Financial Markets Association, a trade group that
represents the largest U.S. retail brokerages.
But some fund managers are sounding a cautious note.
"We're back to a glass half-full environment as opposed to a
glass half-empty environment," Jim Chanos, president and founder
of Kynikos Associates, said at the Reuters Global Investment
Outlook Summit on Tuesday. "If you're the typical investor, it's
probably time to be a little bit more cautious."
Analysts have said that some of the biggest names coming to
market this year, such as the social media star Twitter
, look overvalued.
But investors are in no mood to relent. About eight
companies have doubled in value on their first day of trading
this year, with many more enjoying sizeable "first-day pops".
Most Chinese IPOs this year have been those of
technology-focused companies, an indication that they are
benefiting from U.S. investors' interest in the technology
Friday's debuts come on the heels of successful listings of
online travel agent Qunar Cayman Islands Ltd and 58.com
Inc, a listing site billed as China's Craigslist, among
Shenzhen-based 500.com, a top lottery operator in China,
raised about $75 million through its IPO, priced at the top end
of its $11-$13 range that was raised from $9-$11 earlier.
The company is one of the two firms authorized by China's
government to provide online sports-lottery sales services in
China's lottery market has grown rapidly over the years due
to economic growth and improving perception of the business.
500.com posted net profit of $3.36 million for the nine
months ended Sept. 30, up nearly two-fold from a year earlier.
The company's user accounts more than doubled to 18.4
million as of Sept. 30 from the end of 2010, according to the
Total lottery sales are expected to rise about 18 percent to
308.0 billion yuan ($50.54 billion) in 2013, the company said in
its prospectus, citing data from market research firm iResearch.
Founder and Chief Executive Man San Law holds a 20 percent
stake in the company and venture capital firm Sequoia Capital
China has a 14 percent stake.
Sungy Mobile priced its 7 million American depositary shares
at $11.22 each, within its $9.50-$11.50 range.
The company reported a profit of nearly $10 million on
revenue of $37.58 million for the nine months ended Sept. 30.
($1 = 6.09 Chinese yuan)
(Additional reporting by Maria Ajit Thomas; Editing by Kirti
Pandey and Saumyadeb Chakrabarty)