A Renren Inc banner hangs outside the New York Stock Exchange on May 4. [Photo / Agencies]

Companies' share prices decline in US, but analysts remain optimistic

BEIJING - Analysts are still optimistic about Jiayuan.com International Ltd, NetQin Mobile Inc, and Renren Inc, the three Chinese Internet companies that listed on the Nasdaq this month, despite shares trading well below their IPO prices.

On May 11, the online-dating and matchmaking site Jiayuan.com became the latest to list in the United States, but its IPO failed to reverse a cycle of declines for Chinese companies.

Jiayuan finished its first trading day at $10.52 - that's 4.4 percent lower than its IPO price.

Earlier this month, NetQin Mobile Inc, which makes cell phone Internet security software, and Renren Inc, one of the country's biggest social networking companies, listed on the New York exchange favored by technology companies.

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Renren's price dropped to $13.49 at the close on May 11, from $18.05 on its first day of trading on May 4. Meanwhile, NetQin Mobile's share price had shrunk $1.34 on May 11, compared with its IPO price of $9.34 on May 5.

The US online-dating website eHarmony Inc has been talking about an IPO for several years, but Jiayuan ended up hitting the stock market first, a dynamic shared with Facebook Inc and Renren.

"The reason Chinese companies are flocking onto the US exchanges is because China has the largest number of Internet users worldwide. Overseas investors are excited by the prospect of future business opportunities and profit in the Chinese market," said Dong Xu, an analyst with the domestic research company Analysys International.

According to a report from Analysys International, a record number of more than 30 Chinese companies listed in the US last year - at least one third of them were technology companies.

Not all of the companies have fared well, but the number of Chinese businesses to list in the US will still increase by 50 percent this year, said He Zhaofeng, a partner and China IPO leader with Ernst & Young.

Jiayuan.com was founded in 2003, when Chief Executive Officer Gong Haiyan spent 1,000 yuan ($182) to register her online dating website, the name of which means "good karma" in Chinese.

The site has since become the largest matchmaking website in China with 32 million subscribers.

According to the IPO prospectus, the company turned a profit of 5.7 million yuan in 2009, and 16.70 million yuan in 2010.

However, "the development of Chinese online-dating websites is three years behind that of their US peers", according to Tian Fanjiang, CEO of Jiayuan's rival website Baihe.com.