Bottom line: Shares of BAIC and Dalian Wanda will be flat over the next few months after weak trading debuts, while Linekong shares will open down 5-10 percent if they debut before year-end.
Dalian Wanda dips in IPO
The year-end flurry of IPOs happening in Hong Kong is sputtering, with the 2 biggest offerings by shopping mall operator Dalian Wanda (HKEx: 3699) and car maker BAIC Motor (HKEx: 1958) both making weak trading debuts. That doesn’t bode too well for one of the year’s final remaining IPOs for Linekong, since other companies from the highly competitive video gaming sector haven’t done very well in their similar recent listings in Hong Kong. Read Full Post…
Bottom line: Dianping or Meituan is likely to mount an IPO bid next year, in a deal that could value either at around $5-10 billion and win a premium as China’s first group buying site to list.
Meituan gets new mega-funding
China’s newly consolidated group buying sector could be close to making its first IPO, with word that leading operator Meituan is on the cusp of landing a massive $700 million in new funding. Such a huge amount would be the company’s fourth round of funding since 2010, and would follow not long after it reportedly raised $300 million earlier this year. That kind of funding frenzy often comes just before an IPO, which leads me to expect we could finally see Meituan become China’s first publicly listed group buying Internet company with a New York IPO perhaps in the first half of next year. Read Full Post…
Bottom line: Haitong’s new share offer is capitalizing on strong sentiment toward brokerages and could be used to fund an overseas purchase, while Wanda’s theme park foray looks too aggressive and is likely to run into problems.
Haitong raises $3.9 bln in share sale
Big fund-raising is in the headlines today as we head into the end of 2014, with real estate giant Dalian Wanda continuing to talk up its upcoming blockbuster IPO as Haitong Securities (HKEx: 6837; Shanghai: 600837) takes advantage of positive market sentiment to make a major new share float. Both plays come as Hong Kong and the US get set to officially wrap up a banner year for fund raising by Chinese companies, fueled by strong investor sentiment. Everyone is racing to finish their fund raising before December 31, since the first quarter of the year is typically a quiet period for such activity and there’s no guarantee this wave of positive sentiment will last into 2015. Read Full Post…
A national anti-corruption campaign at major state-run firms has filled the headlines these last few months, but a spate of smaller scandals last week cast a spotlight on another lower-profile problem that is far too common in China’s private corporate sector. That problem is deficient business ethics, which created embarrassments twice for smartphone sensation Xiaomi, and also for social networking app developer Momo (Nasdaq: MOMO) and security software specialist NQ Mobile (NYSE: NQ). Read Full Post…
Two scandals in China’s tech world were hot topics in the microblogging realm this past week, drawing heated discussion on allegations of copycatting and other unethical business behavior at smartphone sensation Xiaomi and newly listed social networking app maker Momo (Nasdaq: MOMO). The debate reflected the wide range of views on the many dubious business practices like intellectual property theft and violation of business contracts that are a regular feature in China’s corporate business landscape.
In less controversial chatter, computing giant Lenovo (HKEx: 992) was also tooting its own horn loud and clear as it celebrated the 10th anniversary of its landmark purchase of IBM’s (NYSE: IBM) PC business. As a long-time China tech writer it was hard for me to believe that historic deal is already a decade in the past, and it certainly kicked off a drive that would propel Lenovo to become the world’s biggest PC brand. Read Full Post…
Bottom line: The resignation of Tesla’s China president hints the company is getting off to a slow China start, while BAIC’s Hong Kong IPO will get a lukewarm reception and trade flat to down over the next year.
Tesla China head resigns after 9 months
Mixed signals are coming from China’s car sector, with state-run automaker BAIC getting a so-so reception for its upcoming IPO as US new energy superstar Tesla (Nasdaq: TSLA) suffers a setback with the departure of its China president. Among these 2 news bits, the one involving BAIC doesn’t come as a huge surprise, since I wasn’t expecting much from the IPO for this stodgy state-run firm. The Tesla news will disappoint the company’s overseas boosters and electric vehicle (EV) fans in general, and hints that this new energy superstar’s drive into China isn’t going as smoothly as hoped.
Let’s begin with the Tesla news, as that’s the sexier of these 2 stories due to the company’s extremely high hopes for China created by its charismatic chief Elon Musk. The latest headlines say Tesla’s China President Veronica Wu, or Wu Bixuan, has resigned after just 9 months on the job. (English article; Chinese article) Tesla declined to comment further on Wu’s departure, but one analyst said the move may reflect slower than expected progress in developing the China market. Read Full Post…
Bottom line: Momo’s stock should continue to perform well over the next few months as investors ignore a scandal around its CEO, while Spring Airlines stock should also debut strongly later this month in its newly approved IPO.
Spring Airlines approved for Shanghai IPO
It seems investors aren’t too concerned when CEOs of their companies are accused of corporate crimes, at least based on the strong trading debut for mobile social networking app maker Momo (Nasdaq: MOMO). Frankly speaking, I’m not surprised about the strong performance for Momo, whose CEO was accused of stealing property from his former employer NetEase (Nasdaq: NTES) and using that property to start up his new company. The fact of the matter is that such dishonesty and unethical behavior is quiet common in China’s corporate sector, and thus is unlikely to result in any punishment, be it a jail sentence or even negative investor sentiment. Read Full Post…
Bottom line: CGN Power’s shares could have some upside over the next 6 months, while Momo is likely to delay its IPO until next week as it responds to allegations of illegal actions by its CEO.
Nuclear prospects power CGN IPO
News continues to come thick and fast in the year-end IPO rush, with a number of colorful stories making this year’s listing frenzy a bit feistier than usual. Leading the headlines was a sizzling trading debut for nuclear power company CGN Power (HKEx: 1816), as investors clamored for a play in China’s drive to clean up its polluted air. Meantime, mobile social networking (SNS) app maker and listing candidate Momo issued an updated filing for its New York IPO, explaining wrongdoing claims against its CEO by his former employer NetEase (Nasdaq: NTES). Lastly, seafood company China Tuna has formally yanked its Hong Kong IPO plan, ending a messy affair that was spoiled by revelations by environmental advocacy group Greenpeace. Read Full Post…
Bottom line: Momo’s IPO will go ahead but could debut weakly due to wrongdoing allegations against its CEO, while SouFun and Xunlei shares will be weak through 2015 due to a bad real estate market and stiff competition.
NetEase accuses Momo CEO of wrongdoing
The China Internet world is being rocked with scandals as we head into the end of the year, led by new allegations of wrongdoing against the founder and CEO of mobile social networking service Momo on the eve of its New York IPO. Meantime, recently listed online video site Xunlei (Nasdaq: XNET) is being rocked by accusations of putting pornography in some of its pop-up ads. Finally there’s leading real estate website SouFun (NYSE: SFUN), which is taking a hit after a highly-trumpeted agreement with a major real estate agency has fallen apart as China’s property market deteriorates. Read Full Post…
Bottom line: Linekong’s IPO should price in the middle of its range and post modest gains on its trading debut, while Dalian Wanda will price near the bottom of its range and debut flat to down slightly.
Linekong aims for December 19 trading debut
The year-end rush of IPOs is steaming ahead in Hong Kong, with online game operator Linekong popping back into the headlines for a year-end listing, as property giant Dalian Wanda starts to sell its own IPO story to investors. The former deal is relatively large for an online game company, aiming to raise nearly $200 million. Meantime, the latter could become the biggest IPO Hong Kong has seen in several years, with the potential to raise nearly $4 billion. Frankly speaking, neither of these deals looks too exciting to me as both come in sectors plagued by overcapacity and stiff competition. But that said, at least Dalian Wanda could be a good longer-term bet due to its status as one of China’s best-run and biggest commercial property developers. Read Full Post…
Bottom line: Feiyu’s weak IPO isn’t surprising and its shares will keep trading down, while Momo’s New York listing could get a slightly better reception but will open flat to up slightly in its trading debut this week.
Feiyu listing aims to raise up to $100 mln
The usual flurry of offshore Chinese IPOs has materialized as we head into the end of 2014, capping a banner year for such offerings. But the year-end rush has been surprisingly devoid of tech names, though we’ve just seen what could be one of the final such IPOs of the year with the Hong Kong debut late last week of mobile game developer Feiyu Technology. Feiyu’s weak debut comes as mobile social networking (SNS) firm Momo also gets set to make its New York trading debut this week, in what could well be the last 2 tech offerings in a banner year for the group. Read Full Post…
