AsiaInfo, Xinhua in Latest Listings Shuffle 新华电视悄然上市亚信联创或被摘牌

By newsdoug on February 9, 2012

Xinhua unit lists, AsiaInfo considers offer There’s a couple of interesting new developments on the listings and de-listings front, with a unit of Xinhua making what looks like a low-key but also significant offering in Hong Kong even as one of the oldest US-listed China firms, AsiaInfo (Nasdaq: ASIA) may be preparing to de-list. The Xinhua listing represents China’s easing of restrictions for such offerings in one of its most sensitive sectors, the media; while the AsiaInfo development marks the latest chapter in a clean-up of US-listed Chinese firms, which have been plagued for much of the last year by a serious of accounting scandals. Let’s look at Xinhua first, which has done a backdoor listing for its relatively obscure TV arm, China Xinhua News Network Corp. (English article) The company said the move is part of a global expansion plan that will see it move into about 100 countries as China tries to boost its influence. The low-key move, which did not see Xinhua raise any actual funds, comes just months after both Xinhua and the People’s Daily both launched similar plans to list their web assets on China stock exchanges (previous post), clearly reflecting the fact that Beijing has given the green light for its media to start listing. That said, I would advise investors to avoid these big state names like Xinhua and People’s Daily, and look for some of the country’s more dynamic media players like Shanghai Media Group and Southern Media Group, which no doubt will soon be listing some of their assets after the big Beijing-based giants go first. Moving on to AsiaInfo, the company has announced it has hired a financial adviser after receiving an unsolicited takeover offer from a fund connected to the CITIC conglomerate. (company announcement) AsiaInfo shares have rallied quite a bit since the beginning of the year, up around 50 percent, presumably as rumors began to spread about this potential buy-out. I can’t really comment on the company’s specific financial situation as I don’t follow them closely, but clearly this offer is based on the low stock prices for many Chinese companies following last year’s sell-off after a series of accounting scandals raised questions about the entire sector. A couple of other companies, Shanda Interactive (Nasdaq: SNDA) and Grentech (Nasdaq: GRFF), have already announced plans to privatize in reaction to the sell-off (previous post), and this takeover bid looks like another attempt by a buyer to take advantage of bargain prices. Shrewd investors with time to do some research could do well this year by identifying other potential bargains, as I suspect we will see a steady string of additional buyout and privatization offers for the next few months as bargain-hunters seek to take advantage of low prices.

Bottom line: Xinhua’s backdoor IPO in Hong Kong marks the first in a wave of new media listings this year, while AsiaInfo could mark the first of many buyouts by bargain-hunting investors.

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