The Top 7 IPOs for 2010: Q4 Review (JKS, HSFT, QLIK, BORN, MMYT, MCP, AMAP)

There are still many companies waiting to come public via initial public offerings in 2010 with just under 2 full months until the end of the year.  We wanted to review some of the top performers of 2010, and you will notice a common theme throughout the successful IPOs… China, or near-by ties.

The list has some  new entrants compared to the top IPOs as of a month ago.  Some of the top IPOs under review are JinkoSolar Holding Co., Ltd. (NYSE: JKS), hiSoft Technology International (NASDAQ: HSFT), Qlik Technologies, Inc. (NASDAQ: QLIK), China New Borun (NASDAQ: BORN), MakeMyTrip Limited (NASDAQ: MMYT), Molycorp Inc. (NYSE: MCP), and AutoNavi Holdings Ltd. (NASDAQ: AMAP).  We wanted to review some quick fundamentals, trends, and performance on each.

JinkoSolar Holding Co., Ltd. (NYSE: JKS) is another Chinese solar player, yet it has been on fire and has so far been one of the top solar stocks after earnings since it blew by analyst estimates, raised guidance, and it even had growing margins.  The May IPO came at $11.00 after having withdrawn a prior IPO attempt, and the IPO price was at the bottom of the range.  Shares also traded as low as $8.23 at the peak of selling.  The rally and a solar recovery trade caused a surge of interest and now shares are flirting with $36.00 for gains of close to 250% from the IPO and gains of more than 300% from the post-IPO lows.  Saying ‘not bad’ would be an insult here.

hiSoft Technology International (NASDAQ: HSFT) is the leader of the pack with gains of nearly 165%.  The deal came public at the end of June at $10.00 per share, and it did actually trade under $10.00 briefly.  Now shares sit at $26.36 and the stock has traded as high as $28.40.  hiSoft is an IT-outsourcing operation and it rallied significantly in the August and September period.  hiSoft is located in China rather than India and it is still considered a micro-cap stock by many investors.

Qlik Technologies, Inc. (NASDAQ: QLIK) also came public this summer in July, a time when markets were recovering after a big sell-off.  The business analytic and business intelligence software maker priced at $10.00, but its low was only $14.00 since after the IPO.  With shares at $24.84 and a high of $27.70, this has been a solid performer with gains of nearly 150% from the IPO price and gains of 78% or so from the lowest post-IPO gain.  Valuations are still high and the market cap is listed as $1.92 billion.  It is likely that there is a premium in the company as well due to the trend in recent years that business intelligence software providers tended to be acquisition companies.

China New Borun (NASDAQ: BORN) is often an overlooked IPO.  The company is a play on alcoholic beverages in China which makes a corn-based alcohol used by distilleries to make baijiu, a Chinese liquor.  The IPO priced way under its initial indications due to market conditions, with a $7 price tag versus prior ranges of $12 to $14 and then $8 to $9.  While this was a poor IPO price for the Chinese company, it has been a home run for investors who decided that the Chinese would start drinking more as they became more successful.  The amazing issue is that the company traded briefly at south of $5.00, and shares had been up nearly 200% from its IPO at a peak $20.50 shortly after Investors Business Daily gave it the #1 position in the IBD 100.  With shares at $15.03, this is still holding gains of more than 110% from the IPO and the market cap is still just under $400 million.

MakeMyTrip Limited (NASDAQ: MMYT) may be off its highs, but the Indian travel destination provider has continued to hold much of its gains and remains a top IPO performer from a month ago.  Shares priced at $14.00 in August, but the lowest shares have really traded is $20.75.  At $33.85, this is up more than 140% from the IPO price and still up close to 60% from the post-IPO price.  Keep in mind that a high had been seen north of $42.00.

Molycorp Inc. (NYSE: MCP) is the come-from-nowhere IPO that does not even have real operations.  The US rare earth element and rare earth oxide maker won’t even have full operations until the end of 2011.  The China-limitations of ‘rare earth materials’ along with a new rare earth material ETF launch has a major floor in this one for now.  Molycorp traded as a busted IPO under its $14.00 IPO price, and despite that ETF launch propelling shares to $40 briefly, this is still trading at $33.75.  The 200%+ gains were extremely impressive at the peak, and even the mere 142% is hard to insult.

AutoNavi Holdings Ltd. (NASDAQ: AMAP) is in global positioning and navigation services for cars, but this one is located in China.  That has kept its cellphone and smartphone competition more limited compared to Garmin Ltd. (NASDAQ: GRMN) in the U.S.  This came public on July 1 in the peak-selling week of summer, and shares are up over 70% at $21.55 versus its $12.50 IPO price.  The low is listed as $12.62, so this held up during the peak selling period this last summer.

The China and/or Asia theme here has been hard to ignore among the top IPO winners.  Maybe this will be used to infer another bubble in the making and maybe not.  IPOs have been better for selective investors this year due to lower valuations being assigned and due to fluctuating market conditions.  The inverse side of that equation implies that companies coming public are not getting major premium valuations.  There have been some real duds so far in 2010 as well.  Still, this many 100%+ gainers is fairly impressive.

It will be interesting to see how the market reacts to Wilbur Ross’ BankUnited upcoming IPO, although unless it plans on focusing on Chinese-Americans in Florida it has no China angle as many theirs do.

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JON C. OGG