qunar

Qunar CEO Zhuang Chenchao

Qunar, one of China’s leading online travel services, has filed for a public offering on the New York Stock Exchange in the hope of raising $125 million. When it eventually goes public, it will be building on momentum gathered in successful recent outings by other Chinese Internet companies LightInTheBox, which raised $79 million in its June IPO, and YY, which last November marked the first IPO by a Chinese company in eight months.

In fact, as Alibaba, having ended talks with the Hong Kong Stock Exchange, shapes up for what looks to be a blockbuster US IPO, the IPO prospects for Chinese Internet companies suddenly look bright, a stark turnaround from just 15 months ago when going public in the US just wasn’t an option because of high-profile accounting scandals and some underwhelming performances.

Chinese Internet companies have been performing well on the stock market of late. VIPShop, the last Middle Kingdom company before YY to go public, has seen its share price climb from a nadir of $4.35 to more than $60 in the space of a 18 months. Communications platform YY, whose opening price was $10.50, is now trading at above $47. And online retailer LightInTheBox, whose opening price was $9.50, is now trading at close to $12.

When you also take in consideration that handset maker and mobile software company Xiaomi, which recently nabbed top Android exec Hugo Barra, is privately valued at $10 billion, you have fair reason to be bullish on Chinese tech. And that’s to say nothing of the rampaging bullet train that is mobile chat app WeChat, which if it weren’t owned by Tencent, one of the world’s five biggest Internet companies, would be a potentially large company in its own right. WeChat now claims 500 million users, including 100 million outside China, and it has attracted ad dollars from major brands, including Nike and Starbucks. It also has other revenue lines, including payments and a nascent gaming platform.

Qunar’s entry to the US public markets, meanwhile, will come under the guidance of search giant Baidu, its largest shareholder. In 2011, Baidu bought a majority stake in Qunar for $306 million, reportedly valuing the company at $500 million. That investment now appears to have been a way for Qunar to pay out its shareholders as the company continued on its IPO path unabated.

Qunar a travel search platform that also provides backend services for traditional travel agencies. Its nearest US equivalent is Kayak, but the platform play means it has substantial business on both the consumer and B2B sides. For the first half of 2013, it reported sales of $58.5 million and a net loss of $2.8 million, according to its SEC filing, suggesting the eight-year-old company is on its way to break-even.

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[Image courtesy World Travel & Tourism Council]