- The China Securities Regulatory Commission (CSRC) has required Qihoo 360 (QIHU.NYSE) to submit additional supporting documents regarding its plan to launch an IPO in the mainland market, according to Sina.
- Qihoo 360 previously announced it would conduct a reversed acquisition of SJEC Corp (601313.SS).
Why It Matters:
- The CSRC is asking Qihoo to provide detailed statistics regarding its user numbers, especially active user numbers and their “stickiness” in terms of the platform. The CSRC is interested in the correlation between this data and Qihoo’s profitability.
- The regulator has also noticed that Qihoo’s net profit jumped from RMB 740 million to RMB 1 billion in the past 12 months and it has requested Qihoo to provide supporting information to illustrate how such fast growth in net profit has been possible.
- The CSRC has acknowledged that it has asked Qihoo to provide a large amount of information and that it has challenged Qihoo’s supporting documents. However, during a press meeting, a spokesperson for the CSRC indirectly suggested that the Chinese government welcomes Qihoo 360 to the mainland list and therefore the likelihood of Qihoo launching an IPO is very high.