Updates with details of Alibaba’s latest holdings, and statement from Alibaba.
Bottom line: Alibaba’s sale of Momo shares is probably part of a slow-motion divorce, as Momo’s founder aims to continue forward as a standalone listed company following the termination of its buyout bid earlier this year.
Alibaba sells Momo shares
The story of the failed courtship between leading e-commerce company Alibaba (NYSE: BABA) and social networking app operator Momo (Nasdaq: MOMO) could be nearing an end, with word that the former has sold off some of its stake in the latter. This particular tale is full of twists and turns, culminating in speculation at one point that Alibaba would outright buy the “hook up” app sometimes referred to as China’s equivalent of US matchmaking app Tinder.
But as with many courtships on the Chinese Internet, this particular one seems to be ending in a slow-motion break-up, though it’s unclear what the cause of that might be. Investors don’t seem to be worrying about the falling out just yet, at least based on Momo’s share price after word emerged that 5 million of its American Depositary Shares (ADSs) were sold by Alibaba. (Chinese article) But I’m not particularly bullish on Momo, mostly because its dating-style app seems like a trendy thing that will probably fall out of fashion at some point. Read Full Post…
Bottom line: Microlender Qudian could raise $500 million or more in an IPO in the first half of next year, most likely in New York, and could get a modestly positive reception as one of the first in a new wave of private Chinese financial firms to list overseas.
Qudian hires CFO, investment bank
Growing signals are emerging that an offshore IPO could be coming soon for Qudian, a financial firm that began its life as a microlender named Qufenqi helping college students to buy things like computers and smartphones. That’s my assessment after learning from one of my sources that Qudian has hired a foreign-trained CFO and also an investment bank, typical developments for a company that wants to make an offshore listing within the next year and often even sooner.
From an investor’s perspective, the company would offer an interesting private play into China’s financial sector, albeit a relatively niche part of that sector. Investors can already buy into numerous Chinese banks and other financial institutions like brokerages and asset managers. But most of those are state-owned and make many of their decisions based on government directives, with the result that their decisions often have a heavy political element that doesn’t always make commercial sense. Read Full Post…
Two names closely associated with e-commerce are in the headlines, led by industry leader Alibaba (NYSE: BABA), which is coming under fresh assault from a coalition of US trade groups for allowing trafficking in pirated goods in its online marketplaces. The other headline involves parcel delivery giant ZTO Express (NYSE: ZTO), which is coming under a different kind of assault as investors dumped its newly-listed New York shares on their first trading day after an impressive $1.4 billion IPO. Read Full Post…
Bottom line: Tongcheng’s lack of hurry to make an IPO reflects confidence about its cash position due to new backing from Wanda, while ZTO’s high profitability looks unusual amid huge losses reported by most of its rivals.
Tongcheng in no hurry to IPO
A couple of IPO stories are in the headlines as the new week begins, led by word that online travel site Tongcheng is in no hurry to make a listing, following its link-up last week with the cash-rich Wanda Group. At the same time, delivery company ZTO Express, which is in a bigger hurry to list, is raising some doubts among observers who say the fat profits announced in its IPO prospectus are at huge contrast with peers in China’s highly competitive parcel delivery sector. Read Full Post…
Bottom line: Many US-listed Chinese companies that have yet to complete privatization bids announced last year are likely to formally abandon the plans in the next few months, after new withdrawals from Autohome and China Information Technology.
Autohome abandons buyout bid
It’s been well over a year since the cresting for a wave of privatization bids by US-listed Chinese firms, which were hoping to leave New York and get better valuations by re-listing back in China. But despite the early enthusiasm, many of the firms that announced such bids at the height of the frenzy have yet to complete their plans.
A small group of larger names, including Internet companies YY (Nasdaq: YY) and Momo (Nasdaq: MOMO), have formally announced the scrapping of their bids. Now 2 more have joined their ranks, with online car specialist Autohome (NYSE: ATHM) and cloud services provider China Information Technology (CNIT) (Nasdaq: CNIT) both announcing they have also abandoned their bids. At the same time, game developer Sky-mobi is moving forward with its own privatization bid, and has just announced the scheduling of a shareholder meeting to vote on the proposal. Read Full Post…
Bottom line: Yum’s China operation could see profit growth accelerate as it steps up its expansion, providing a boost for its newly listed stock over the next 3-5 years.
Yum China eyes big KFC expansion
Fast food giant Yum (NYSE: YUM) is kicking off a publicity blitz in the run-up to the formal spin off of its China business, discussing ambitious growth targets for its biggest global market. It’s not surprising that the operator of the KFC and Pizza Hut brands is focusing on the future, since its China data in the present is far from impressive. That includes a surprise same-store sales decline in its latest quarterly report, and unimpressive profit growth of around 15 percent. Read Full Post…
Bottom line: ZTO’s proposed New York IPO is getting modest interest due to concerns about competition in the parcel delivery sector, while bike sharing service Ofo could make its own offshore IPO in the next 3 years.
Bike sharing service Ofo raises funds
Just a day after I noted the disappearance of a previously discussed New York listing plan by parcel delivery service ZTO Express, the company has re-emerged in the IPO headlines with a filing saying it plans to raise up to $1.5 billion. At the same time, an intriguing bicycle-sharing service called Ofo is also in the fund-raising headlines, picking up a smaller $130 million in new money from its own impressive list of investors that includes ride-sharing giant and Uber-killer Didi Chuxing. Read Full Post…
Bottom line: NetEase could abandon a newly announced New York IPO plan for its media arm if it can find a suitable buyer, while a previously announced New York listing plan by ZTO Express could be revived before year-end.
NetEase news unit makes filing for NY IPO
What’s shaping up as a quiet year for Chinese IPOs in New York has just gotten a small boost, with word that online gaming giant NetEase (NYSE: NTES) has made an initial filing to list its respected but financially-challenged news portal business. Meantime, rumors are building for what’s likely to be one of next year’s biggest offerings from Ant Financial, the financial services affiliate of e-commerce giant Alibaba(NYSE: BABA) and owner of the Alipay e-payments service. But in this case, Ant is shooting down the latest buzz that specific plans are in place for a Hong Kong IPO next year. Read Full Post…
Bottom line: Yum China’s new stock will post moderate gains of 3-6 percent when trading begins on November 1, while Merchants Securities’ IPO shares will price in the middle of their range and debut flat to up slightly.
Merchants Securities makes HK listing
IPOs are heating up as we head into the fourth quarter of 2016 and companies race to complete offerings before the traditionally slow period between Christmas and Chinese New Year. The last week alone has seen progress on what could be the world’s 2 biggest offerings this year, being made by Postal Savings Bank of China and P2P lender Lufax. (previous post) Now 2 more mega listings are in the headlines, as brokerage Merchants Securities prepares for an IPO in Hong Kong and KFC parent Yum (NYSE: YUM) gets set to spin off and separately list its China unit in New York. Read Full Post…
Bottom line: Lufax’s Hong Kong IPO could launch by the end of this year and will get a strong reception, while Xinhuanet’s Shanghai IPO will get a similarly positive reception due to strong support from state-run investors.
Xinhuanet approved for Shanghai IPO
Just days after the stodgy Postal Savings Bank of China launched an IPO that will be the world’s biggest in 2 years, the much higher-tech P2P lender Lufax has kicked off another Hong Kong listing that’s nearly as large. More specifically, Shanghai-based Lufax has begun hiring investment banks for a listing that could raise up to $5 billion, according to new reports.
Meantime, a flurry of new domestic Chinese IPO plans is also in the headlines, led by word that state-owned online news giant Xinhuanet has been approved for a new listing in Shanghai. China stock watchers might recall that Xinhuanet’s IPO plan first surfaced in the headlines 3 years ago, but was indefinitely shelved due to repeated slowdowns and freezes for new domestic offerings due to market volatility. Read Full Post…
Bottom line: Postal Savings Bank’s IPO is likely to price weakly and make a flat trading debut due to waning enthusiasm, while Anbang could make a similarly large IPO next year that will get an equally tepid reception.
Anbang eyes HK IPO
The world’s biggest IPO in 2 years is quickly running out of steam, with word that a Hong Kong listing by Postal Savings Bank of China, the nation’s last national bank to list, is set to price near the bottom of its range. Meantime, what could easily become one of next year’s biggest offering has just popped into the headlines, as insurance giant Anbang is saying in one of its first-ever foreign media interviews that it wants to make its own listing, also in Hong Kong. Read Full Post…
