Vipshop's Latest Surge Adds To Its Standing As Top-Performing Chinese IPO In The U.S.

Mar 5 2014, 9:18am CST | by

Vipshop's Latest Surge Adds To Its Standing As Top-Performing Chinese IPO In The U.S.
Photo Credit: Forbes Business

The 32% rise yesterday in the share price of online discount retailer Vipshop Holding added anew to the company’s standing as best-performing Chinese IPO in the U.S. in the past two years.

Vipshop’s huge 30 fold rise from $5.5 per share at the time of its IPO in March 2012 to $169 at closing yesterday morning was four times as big as social site YY, which has returned 670%. Vipshop has had the highest return among all the 11 Chinese IPOs in the U.S. from 2012 to 2013, based on figures presented by Andy Hall, managing director for new listings at the Nasdaq, in a talk organized by the China-U.S. Chamber of Commerce last week in New York.

Shares of New York-traded Vipshop climbed yesterday after the company unexpectedly strong fourth-quarter results. Sales rose 117% from a year ago amid a doubling of active customers. Its gross margin has steadily improved from 21% at the time of its IPO to 24.5% in the fourth quarter. In comparison, Dangdang, another well-known Chinese e-commerce had a margin of 17.6% in the third quarter of 2013.

When I first wrote about Vipshop in November, only one of the co-founders, Eric Shen, met the Forbes China Rich List cut-off line of $600 million fortune. But the recent jump in stock price has also lifted co-founder Arthur Hong into the ranks of the world’s richest people.  China has a record 152 members of the new Forbes Billionaires List published this week. Among them are Zhou Hongyi, co-founder of Beijing-based Internet security and search company Qihoo 360 Technology, and Mo Tianquan, chairman of online real estate information provider Soufun.

The five-year-old company has largely relied on organic growth driven by online flash sale of mid to high-end discounted clothing, cosmetics and accessories, in what Deutsche Bank calls an “acutely under-penetrated and still-underestimated China discount market.” In its first acquisition, Vipshop last month bought a 75% stake in Chinese cosmetics online retailer Lefeng for $132 million. It also purchased 23% of Lefeng’s parent company for $56 million. The partnership is expected to generate at least $146 million revenue from Lefeng products in the coming year, according to a press release.

Follow me on Twitter @Hengshao90s.

Source: Forbes Business

 
 
 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Need for Speed Reboot is Coming This Fall
Need for Speed Reboot is Coming This Fall
EA will release a complete new Need for Speed this fall. The video game giant just released a teaser video and the first Need for Speed Gameplay video will be revealed in June.
 
 
Google Self-Driving Cars to Hit Public Roads this Summer
Google Self-Driving Cars to Hit Public Roads this Summer
Google announced today that Google Car prototype vehicles will leave the test track and hit the familiar roads of Mountain View.
 
 
Google Search Analytics Launched in Web Master Tools
Google Search Analytics Launched in Web Master Tools
Google officially announced the new Search Analytics feature in Webmaster tools.
 
 
T-Mobile Hits Verizon with new 'Never Settle Trial' Campaign
T-Mobile Hits Verizon with new 'Never Settle Trial' Campaign
In case customers don't feel satisfied, T-Mobile will pay for them to shift back to Verizon