China Real Estate Information IPO Expected This Week

China Real Estate Information (CRIC), a spin-off of E-House China's (EJ) real estate information and consulting business. is expected to go public this week. According to the Wall Street Journal, "China Real Estate is in the process of acquiring the online real-estate business of Sina Corp. After that deal is completed, the company will begin generating online-advertising revenue." The deal size could reach $225.9 million.

Business Overview (from prospectus)

We are the largest provider of real estate information and consulting services in China in terms of market share measured by revenue, according to the Frost & Sullivan Report. Upon the completion of this offering, we will also operate a leading real estate Internet business in China by acquiring the online real estate business operated by SINA Corporation, or SINA, a leading online media company in China. We are currently a subsidiary of E-House (China) Holdings Limited, or E-House, a leading real estate services company in China listed on the New York Stock Exchange. E-House will remain our parent company and controlling shareholder after this offering. We operate a proprietary, advanced and comprehensive real estate information database and analysis system, or the CRIC system. As of June 30, 2009, our CRIC system contained detailed data on over 38,200 developments or buildings and over 24,200 parcels of land for development in 56 cities throughout China.

Prior to July 2006, our CRIC system had been used as an internal resource to support E-House’s real estate agency and brokerage services as well as consulting and information services. We began to commercialize the CRIC system by selling subscriptions in July 2006 and have generated revenues from our real estate information services since then. We began offering and generating revenues from real estate consulting services in 2002. Such services were provided through various subsidiaries of E-House prior to 2006 and, since 2006, have been provided through our main operating subsidiary, Shanghai CRIC Information Technology Co., Ltd., or Shanghai CRIC.

Offering: 18.0 million shares at $12 - $13 per share. Net proceeds of approximately $209.7 million will be used fund capital expenditures including information and operational systems, sales and marketing efforts and for general corporate purposes.

Lead Underwriters: Credit Suisse (CS), UBS Investment Bank (UBS), BofA Merrill Lynch (BAC)

Financial Highlights:

Our total revenues increased by 61.8% from $19.3 million for the six months ended June 30, 2008 to $31.2 million for the six months ended June 30, 2009, primarily due to an increase of $7.1 million in revenues from real estate consulting and information services as we expanded our geographical coverage and gained new clients and an increase of $4.9 million in revenues from advertising services as we began to offer advertising sales services in the first half of 2009... Our cost of revenues increased by 88.3% from $1.8 million for the six months ended June 30, 2008 to $3.4 million for the six months ended June 30, 2009... Our selling, general and administrative expenses increased by 108% from $7.5 million for the six months ended June 30, 2008 to $15.6 million for the six months ended June 30, 2009. Our selling, general and administrative expenses increased by 108% from $7.5 million for the six months ended June 30, 2008 to $15.6 million for the six months ended June 30, 2009...we had net income attributable to CRIC of $11.0 million for the six months ended June 30, 2009, compared to $7.2 million for the six months ended June 30, 2008.

Competitors

The real estate information and consulting services sector in China is at an early stage of development and highly fragmented. While we face competition in each line of real estate information and consulting services we offer, we believe none of our competitors possesses as comprehensive a real estate information database or as large a team of real estate research professionals as we do. In the real estate information services sector, we compete with both national and local real estate information service providers, including Soufun.com, an Internet real estate portal that primarily targets consumers but also provides real estate market data as part of its service offerings. In the real estate consulting services market, we compete with international real estate consulting companies, such as DTZ, CB Richard Ellis and Jones Lang LaSalle, domestic real estate consulting companies, such as World Union Real Estate Consultancy (China) Ltd., and individual consulting brands.

Additional Resources:

• Company website
• Online road show
• TraderMark: 'China Real Estate Information IPO: Worth Bidding up?'
• AP: '2 IPOs to signal US desire for China investments'
• Press Release: 'E-House China Unveils Management Team Changes'
• Wall Street Journal: 'China Real Estate Files for U.S. IPO'