2010/12/09

China video site Youku soars on Wall Street debut

SHANGHAI, December  9, 2010 (AFP) - Shares in Chinese online video company Youku.com's soared 161 percent on their first day of trading on Wall Street -- the strongest New York Stock Exchange debut in more than five years.

Youku's founder and chief executive Victor Koo rang the opening bell on Wednesday to celebrate the firm's debut, which ended at 33.44 dollars from their 12.80 pricing, completing a 203 million-dollar initial public offering.

The first day performance by Youku -- whose name means excellent and cool -- was the best since Baidu, China's most popular search engine, rose 354 percent in August 2005, according to New York Stock Exchange data.

The listing by China's number one video site by audience and advertising revenue raises the pressure on its rival Tudou.com, which filed last month for its own 120-million-dollar US offering.

The IPO proceeds could provide Beijing-based Youku with huge advantages over Tudou if the latter fails to list during the current favourable window for Chinese IPOs in the United States, experts say.

In a sign of the strong appetite for Chinese stocks, online bookseller E-Commerce China Dangdang, which was also making its NYSE debut, closed at 29.91 dollars, up 86.9 percent from its listing price of 16 dollars.

Youku had an audience of 252 million in the third quarter, ahead of Tudou's 225 million viewers, according to Beijing-based research firm Analysys International.

A total of 319 million people watched online videos in China over that three-month period, with the same viewers visiting multiple sites, Analysys said.

The online video advertising market's value rose 148 percent on year in the third quarter to 621 million yuan (93.5 million dollars), with Youku taking a 23 percent share and Tudou 19 percent, according to Analysys.

However, both companies have yet to make a profit.

Youku, founded in 2006, has raised 160 million dollars privately and has 10 million dollars in debt, although it has reportedly said it expects to turn a profit in 2013.

Tudou, which has managed costs better than Youku according to SEC filings, has said it could make its first ever profit this quarter after receiving 135 million dollars in financing since it was founded in 2005.