Kaixin, one of the most popular social networks in China, “has finished every procedure and is ready to go” with a U.S. IPO as early as within two months, said an investment banking source.

The Chinese social network’s largest rival, Renren, got listed on the New York Stock Exchange earlier this month despite red flags raised by industry analysts. Given the lucrative social networking business in China, it doesn’t come as a surprise that Kaixin wants to lure investors in an initial public offering and raise a few hundred million U.S. dollars to keep up with its competitor.

Founded in March 2008 by former Sina CTO, Cheng Binghao, Kaixin became one of the most popular social network in China. However, due to the rise of more prominent Chinese social networks, Kaixin is starting to lose its appeal. As of February, it had over 100 million registered users and over 50 million active users visiting the site every month, garnering over 8 billion page views per week.

It may be appetizing for Kaixin to jump an IPO soon after seeing Renren raise over US$743 million dollars for its IPO, much more than the US$584 million it originally planned. Just a few days before its IPO, Renren increased its IPO price by over 25%, but has been on the decline since, currently valued 8% below IPO price.

One of the issues raised by Morningstar IPO strategist Bill Buhr about Chinese Internet companies applies to Kaixin as well. “This is a business that the Chinese government could at some point either attempt to regulate, or flat-out censor, which would diminish the value of the product and content offering almost immediately,” he said.

Although it is undeniable that investors are blinded by China’s more than 270 million users of social networking websites with a market worth of more than $2 billion, the recent decline in IPO prices of Chinese Internet companies are starting to give them second thoughts before investing.

According to analyst predictions, “the scarcity of NYSE listed Chinese stocks will diminish as more Chinese Internet companies go public in the US, lowering IPO prices in the future.”

Does Kaixin have a chance?