Oak Pacific seeks more Internet firms before IPO
OAK Pacific Interactive Corp, China’s second-largest operator of social networking Websites, may buy more Internet companies before seeking an initial share sale in about two years, Chairman Joe Chen said.
Oak Pacific plans to use the US$100 million it received from Japan’s Softbank Corp for acquisitions, Chen said in a telephone interview with Bloomberg News on Thursday. Oak may target publicly traded Chinese Web firms that have underperformed and generate annual revenue of about US$50 million to US$100 million, he said.
“If you look long term, businesses like that still have a bright future if you can manage them right,” Chen said from Beijing, where his company is based. “We’re farmers. We buy premium seeds but we grow our own crops.”
Chen said he aims to take advantage of a stock market rout that wiped out about US$6 trillion in value worldwide last month to expand in a country that have the world’s largest number of Internet users.
Oak’s holdings include Xiaonei.com, which Chen says has a similar “look and feel” as Facebook, the most popular social-networking Website.
“Valuations have definitely come down for Chinese Internet companies,” said Dick Wei, an Internet analyst at JPMorgan Securities Inc in Hong Kong.
“China is still adding a lot of Web users and so there’s still good room for growth.”
“Oak Pacific would be better off investing that money in Xiaonei.com, which is the best asset they have, instead of using it to buy new sites,” said Liu Bin, an analyst at Beijing-based researcher BDA China Ltd. “I don’t think they can financially afford to buy anything that’s of great value.”
Chen plans to list Oak Pacific in the United States or Hong Kong in about two years, when its offering may fetch a higher valuation, he said. Chen denied reports that Oak Pacific would turn Xiaonei into an independent company.
Tags: Internet, IPO