SouFun Holdings Prices IPO at High End of Range

Sep.16.10 | About: SouFun Holdings (SFUN)

SouFun Holdings Limited (NYSE:SFUN), a China-based real estate, home furnishing and improvement portal priced its IPO at at $42.50, the high end of the $40.50-$42.50 range.

Business Overview (from prospectus)

We operate the leading real estate Internet portal in China in terms of the number of page views and visitors to our website in 2009, according to a report issued in March 2010 by DCCI, an independent market research institution, commissioned by us. We are also a leading home furnishing and improvement website in terms of unique visitors according to research from CR-Nielsen, an independent market research firm, commissioned by us. According to a report issued in March 2010 by CR-Nielsen, our website, www.soufun.com, had a 46.3% market share of the online real estate advertising market in China in 2009 by estimated revenues. Through our website, we provide marketing, listing and other value-added services and products for China’s fast-growing real estate and home furnishing and improvement sectors. Our user-friendly website supports an active online community and network of users seeking information on, and other value-added services and products for, the real estate and home furnishing and improvement sectors in China. Our current and forthcoming service offerings include: • Marketing services • Listing servicesnd • Other value-added services and products

Offering: 2.9 million ADS (of which 2.6 million by selling stockholders) at $41 - $43 per ADS. Net proceeds of $6.9 million from this offering will be used for general corporate purpose.

Lead Underwriters: Deutsche Bank Securities (NYSE:DB), Goldman Sachs Asia L.L.C. (NYSE:GS)

Financial Highlights:

Revenues increased by 84.5% from US$37.0 million in the six months ended June 30, 2009 to US$68.2 million in the same period in 2010... Cost of revenues in the six months ended June 30, 2009 and 2010 as a percentage of total revenues was 28.9% and 36.7%, respectively... Gross profit increased by 64.2% from US$26.3 million in the six months ended June 30, 2009 to US$43.1 million in the same period in 2010... Operating expenses increased by 60.4% from US$19.4 million in the six months ended June 30, 2009 to US$31.1 million in the same period in 2010... Operating income increased 74.8% from US$6.9 million in the six months ended June 30, 2009 to US$12.1 million in the same period in 2010... Net income margin decreased from 10.1% in the six months ended June 30, 2009 to 7.8% in the same period in 2010... Net income attributable to shareholders increased by 41.7% from US$3.7 million in the six months ended June 30, 2009 to US$5.3 million in the same period in 2010...

Competitors

We face competition from other companies in each of our primary business activities. We compete with these companies principally on the basis of website traffic volume, the quality and quantity of real estate and home furnishing and improvement listings and other information content, geographic coverage, service offerings and marketing and listing customers. We also compete for qualified employees with sales, real estate, home furnishing and improvement products and services and Internet industry experience. We monitor our market share in the online advertising industry in China through market information gathered internally as well as from independent market research institutions such as CR-Nielsen and DCCI. Due to the nature of online residential real estate listings and the fact that the PRC market for residential real estate is a developing industry, there is limited independent third-party information on the market share of websites that provide residential real estate listings. To help assess our competitiveness and market position, our listing services division gathers information on the number and prices of paid online listing subscription accounts and similar information on our competitors from public sources for our internal records. Based on these internal records, we believe we are currently one of the leading Internet portals for residential real estate listings in China and have gained significant market share in most of the important cities, including Beijing, Shanghai, Tianjin, Chongqing, Shenzhen, Wuhan, Chengdu and Nanjing, as measured by the total number of online listing subscription accounts and total listing revenues.

Additional Resources: