http://www.soufun.com/Shares of SouFun Holdings, an online real estate services provider, soared nearly 73 percent in the debut on the New York Stock Exchange Friday, as confidence in China's property market remains strong.
Shares of the company, which controls almost half of China's online real estate advertising market, closed at $73.50, 72.9 percent above its offering price, the second-largest first-day gain for an IPO this year after raising $125 million.
"The massive gains show overseas investors are still optimistic towards opportunities in the Chinese real estate market," Chen Jie, professor with the Center for Housing Policy Studies at Fudan University, said Saturday.
Chen sited the country's rapid urbanization as a sign that demand for property-related services will only rise in the near future. Approximately 150 million rural residents moved to big cities last year, and that figure continues to rise.
As of June 30, SouFun Holdings covered 106 Chinese cities, according to its prospectus.
The company had operating revenue of nearly $70 million in the first half of the year, an 84.5 percent increase over the same period of 2009. Its net profit was $5.3 million, up almost 42 percent year-on-year.
But even as SouFun Holdings posts high growth, it still faces stiff competition and an uncertain regulatory future.
It competes against top-ranked China Real Estate Information Corp, which raised $216 million in a Nasdaq IPO last October.
Experts said China's policies to rein in rising housing prices would also affect SouFun, although not as much as other firms in the property sector.
Soufun provides real estate information rather than buy and sell property, so it faces lower risks than developers, but government policies will still impact its business, said Chen from Fudan University.
Five months ago, the government sought to tackle rising real estate prices with a slew of policy measures, but so far their impact has been small.
Jiang Dingzhi, deputy director of the China Banking Regulatory Commission, said in Shanghai Friday that the commission will not issue new housing regulations, but it will still continue to monitor current policies to see if they are having an effect.
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