Chinese car rental company eHi debuts on NYSE

An eHi Car Service outlet in Shanghai. China's leading car rentals and services provider eHi Car Services Limited listed its shares on the New York Stock Exchange on Tuesday. [Photo/Provided to China Daily]

China's leading car rentals and services provider eHi Car Services Limited listed its shares on the New York Stock Exchange on Tuesday.

The company announced that its initial public offering (IPO) of 10 million American depositary shares (ADSs), each representing two Class A common shares of the company, was priced at 12 U.S. dollars per ADS, at the low end of its expected price range of 12 dollars to 14 dollars.

The company's shares opened trading at 12 dollars a share under the ticker symbol "EHIC," but slipped slightly later in trading.

It expects to receive gross proceeds of approximately 120 million dollars from the offering at closing, assuming the underwriters do not exercise their option to purchase additional ADSs.

J.P. Morgan Securities LLC and Goldman Sachs (Asia) L.L.C. acted as joint book runners for eHi's IPO. The underwriters have been granted a 30-day over-allotment option to purchase up to an additional 1.5 million ADSs from eHi.

Ray Zhang, eHi's founder, chairman and chief executive officer, said "we believe the elevated commitment to corporate governance that follows a public listing, along with the added capital and increased brand recognition, will boost our efforts to grow our business."

Early October, eHi filed with the U.S. Securities and Exchange Commission (SEC) for its IPO. The company was originally scheduled to go public last Friday but delayed its listing till Tuesday due to allegations that it had misrepresented its financial performance and the size of its fleet of vehicles.

In response, eHi issued a statement on Monday, clarifying that the company, with the assistance of third parties, investigated these allegations and "determined they were without merit."

Commenting on the delay, eHi's Chief Finance Officer Colin Sung said "we felt it was more important to provide as much transparency as possible to investors, and give them an opportunity to evaluate all of the disclosures in our public filings with the SEC."

Headquartered in Shanghai, eHi initially focused on providing car services to corporate clients when it commenced business in 2006, and then expanded to provide car rentals to individual customers two years later.

By the end of June this year, eHi directly operated a total of 760 service locations in 90 cities across China, said the company in its prospectus.

China's car rental market as measured by revenues grew from 9.4 billion Chinese yuan (some 1.5 billion dollars) in 2009 to 26.7 billion yuan (some 4.4 billion dollars) in 2013, representing a compounded annual growth rate of 29.8 percent, and is projected to grow to 51.0 billion yuan (some 8.3 billion dollars) by 2017, according to Frost & Sullivan, a third-party market research firm.