Undaunted by the current poor appetite among investors for Chinese information technology companies, mainland web game developer 7Road.com flagged a plan this week to list American depository receipts (ADRs) in the United States.
7Road.com is a subsidiary of the mainland's online game developer and operator Changyou.com, which in turn is a subsidiary of news portal Sohu.com - both of which are listed on the Nasdaq market in the US.
Changyou said on the Sohu website on Monday that 7Road planned to submit a draft registration statement for a possible initial public offering of American depositary shares. Neither the timing of the IPO nor the number or dollar amounts of the proposed ADRs had yet been determined.
It said the purpose of the listing would be to create a public market for its shares and to attract and retain talented employees by providing them with equity incentives. 'The IPO may commence as early as market conditions permit,' it said.
ADRs are negotiable certificates issued by a US bank representing a specified number of shares in a foreign stock that is traded on any of the US markets, or on dealer-managed over-the-counter markets.
Investor confidence in Chinese information technology companies was dented after a series of online reports were published last year accusing mainland firms of falsifying of financial statements or poor internal management.
'This is not an ideal time to be listing,' said Sun Mengzi, an analyst for Analysys International.