Bookbuilding kicks off for Autohome follow-on

Executives start a four-day roadshow for Chinese car trading website's follow-on, which could net majority shareholder Telstra north of $300 million.

Roadshows kick off Friday for a follow-on share offering by Autohome, the US-listed Chinese car-trading website.

On offer are 8.5 million shares. Roughly six million of these will be offloaded by Telstra, the Australian telecom and media company which currently owns roughly 65% of the company and is looking to snip its stake to 57%.

Depending on demand, the Deutsche Bank and Goldman Sachs-led share sale could net Telstra up to $328 million, with Autohome securing $100 million from the sale of the remaining shares.

Executives will spend one day meeting with investors in Hong Kong and three days travelling in the US next week. The deal will likely price towards the latter half of next week.

Shares in Autohome are up 23% so far this year but have dropped 23% since hitting a high of $56.60 on August 26. 

The Beijing-based company has a market capitalisation of about $5 billion. It is currently trading at 41.71 times its expected 2014 earnings and is in the mid-30s for its forecast 2015 earnings. 

Autohome is a slightly less expensive alternative to its closest comp BitAuto, another Beijing-based internet and marketing company focused on mainland China's auto market. Shares in BitAuto have performed exceptionally this year, having climbed 148% so far in 2014.

BitAuto, which offered some 10.6 million American Depository Receipts at $12 per unit in its Nasdaq flotation in November 2010, is currently trading at 46.20 times its expected 2014 earnings.

Autohome received strong demand for its own initial public offering in December 2013 when it raised $133 million. Its immediate aftermarket performance was also impressive, with shares surging 76% on its market debut.

Telstra purchased 55% of Autohome’s parent in 2008 for $76 million. At the time of the IPO, the Australian telecom company owned a 66.2% stake, a stake that was reportedly worth $2 billion.

It claims to be China’s leading destination for mainland automotive customers, and provides independent content to automobile buyers and owners through its two websites, and


Autohome exceeded most analyst expectations in its third quarter earnings thanks to strong online advertising and deal-subscription services. Net income rose 26% year-on-year to Rmb170.9 million ($27.9 million) in the three-month period to September-end.

Revenues meanwhile were Rmb545.1 million compared with Rmb331.2 million in the third quarter of 2013.

The timing for the follow-on offering is ideal given the performance of other Chinese technology shares in the past few weeks. Tencent has risen 11% since mid-October while social media platform YY is up 14%. And this year’s behemoth, Alibaba, has risen 74% since its September 18 listing.

¬ Haymarket Media Limited. All rights reserved.
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