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Media/Entertainment
youngchinabiz.com : latest Business news about Media – Entertainment in China by expert / journalist Doug Young : more than two decades of experience in writting about Chinese Companies
Bottom line: Alibaba’s removal of the paywall from the SCMP’s website shows it may want to use the newly acquired newspaper in its bigger strategy to get more news from big data, as it seeks to boost its global influence.
Alibaba removes paywall at SCMP.com
E-commerce giant Alibaba (NYSE: BABA) is in the headlines as it wraps up its landmark purchase of Hong Kong’s leading English language newspaper, announcing it will formally remove the paywall on the South China Morning Post’s (SCMP) website as its first major strategic move. In a completely separate headline, Alibaba has also named a new head for its international public relations team, replacing a heavy-hitter it hired less than 2 years ago in the run-up to its record-breaking New York IPO.
Both of these moves reflect the rapid changes taking place not only at Alibaba, but also in the traditional media realm where the SCMP operates. Traditional newspapers like the SCMP are looking desperately for new revenue sources as they get abandoned by their traditional advertisers and subscribers who are flocking to the Internet. Read Full Post…
Bottom line: A flurry of new de-listing activity shows that well-funded privatizations will continue despite market volatility in China, and could also spread to undervalued private companies listed in Hong Kong.
Wanda Commercial Properties eyes buyout
The headlines are brimming with new moves in the buyout wave that has swept over off-shore listed Chinese stocks, which are privatizing in droves due to disappointing valuations. Leading the news are 2 former high-flyers, online video site Youku Tudou (NYSE: YOKU), which has formally completed its buyout by e-commerce giant Alibaba (NYSE: BABA); and property giant Wanda Commercial Properties (HKEx: 3699), which has announced it is exploring a potential buyout less than 2 years after its Hong Kong IPO.
That pair are joined by 2 smaller stories involving ongoing privatizations by budget hotel operator Homeinns (Nasdaq: HMIN) and the shriveling Ku6 Media (Nasdaq: KUTV). Media are saying that Homeinns has already lined up a Chinese listing vehicle to resume its life as a publicly traded company after it de-lists from New York. And Ku6 has announced it has formally signed a buyout agreement that will result in its own de-listing. Read Full Post…
Bottom line: A surprise bid by China’s XIO Group for JD Power is unlikely to succeed due to lack of experience and possible concerns over a regulatory veto, but could force rival bidders to raise their offers slightly.
XIO joins bidding for JD Power
In what’s becoming an increasingly common occurrence, an obscure Chinese company has entered the bidding for a major western asset, with word that a buyout firm called XIO Group is eyeing US-based car industry consulting giant JD Power and Associates. I’m not too surprised by any of these bids these days, since many Chinese companies are flush with cash and under orders from Beijing to diversify beyond their home market.
These bids are pushing up the prices for global assets quite a bit, even as many such acquisition attempts ultimately fail. Both of those elements are present in this latest story, since Chinese bidders have become famous for attempting to buy top names like JD Power at any price, regardless of fundamentals of the acquisition target. But in the end, most of these Chinese bids are failing due to lack of experience and concerns about such foreign ownership. Read Full Post…
Bottom line: Groupon’s new tie-up with Comcast shows it’s more interested in working with a well-known US-based company than the unfamiliar Alibaba, which could force Alibaba to quietly dump its Groupon stake by the end of this year.
Comcast buys into Groupon
It seems e-commerce giant Alibaba (NYSE: BABA) isn’t the only company interested in money-losing group buying site Groupon (Nasdaq: GRPN). Less than 2 months after Alibaba disclosed it had purchased 5 percent of Groupon shares, apparently in the open market, a firm backed by US cable giant Comcast (Nasdaq: CMCSA) has just announced plans for its own strategic tie-up with the faded group buying site.
This new move certainly seems to throw some doubt on my previous prediction that Alibaba’s purchase could presage a boosting of its stake in Groupon, or perhaps even an outright buyout bid. While such a move is still possible, Groupon does seem to be signaling that it intends to remain independent. It also seems to be indicating it prefers this more direct approach to forming new partnerships, rather than Alibaba’s approach that looks a bit stealthier since it appeared to buy its Groupon shares without the company’s consent. Read Full Post…
Bottom line: Disney will face huge challenges in running a smooth opening for its new Shanghai park in June, as it faces potential negative publicity from aggressive ticket scalpers and other glitches associated with such a big event.
Tickets sell out for Shanghai Disney opening day
The official countdown has begun to the June opening of Shanghai Disneyland, in a story that contains both scripted and unscripted moments reflecting what a commotion this event is likely to become. In the scripted category, luminaries including basketball legend Yao Ming and piano superstar Lang Lang attended an event this week kicking off the 80 day countdown to the big opening. In the unscripted column, opening day tickets to the park sold out quickly after going on sale, and were showing up later in the day from scalpers who were asking for twice the price or more.
I was living in Hong Kong just before Disney opened its last theme park there back in 2005. I don’t recall nearly this level of hype before that opening, and certainly not the big issue with scalpers that are an endemic part of the Chinese landscape. But I do recall the numerous glitches that occurred in the months after the Hong Kong park opened, and how media feasted on the negative developments that are almost inevitable when launching a project of such magnitude. Read Full Post…
Bottom line: Beijing should launch an aggressive campaign to privatize state-owned enterprises, which could cause some short-term pain but will ultimately put the economy on a more stable long-term footing.
Profits tumble at SOEs
The latest profit reports for big state-owned enterprises (SOEs) are coming in for the first 2 months of the year, and the picture isn’t pretty and even looks quite worrisome for China’s thousands of state-owned enterprises (SOEs). New data published late last week showed profits for SOEs tumbled 14.2 percent in January and February combined, as they continued to be plagued by problems like overcapacity and weak demand due to China’s slowing economy.
But one of the biggest problems facing these companies, and one that threatens their long-term survival, is their failure to act commercially, a legacy of China’s planned economy that saw big SOEs historically function as tools for executing government policy. Such a tendency is what, for example, drives steel makers to continue producing at full throttle even when every ton of product they sell adds to losses due to the sector’s huge overcapacity. Read Full Post…
Bottom line: Huge interest in a new mega funding for Wanda Pictures reflects confidence in the company and China’s entertainment industry, though Wanda may have to raise its price to complete its proposed US acquisition of Carmike Cinemas.
Wanda’s Carmike bid draws chilly reception
The hyperactive Wanda Group is in a couple of entertainment headlines as we round out the week, reflecting the company’s recent drive to diversify beyond its roots as a real estate company. The larger of the pair has Wanda’s recently launched film-making unit raising a cool $2.4 billion in its maiden fund-raising, an impressive figure for a company that has little experience in the area. The second involves an acquisition plan by Wanda’s related theater arm, and is seeing the company’s plan to buy US chain Carmike Cinemas (Nasdaq: CKEC) hit some opposition from shareholders who say the bid is too low.
This pair of stories reflects 2 different themes in China’s corporate world over the past year. The first shows how easy it has become for big names like Wanda to raise major new funds, often topping $1 billion, from investors excited about China’s fast-growing Internet and entertainment sectors. The second reflects a growing resistance by US shareholders to Chinese acquisitions of New York-listed companies, with many complaining the bids grossly undervalue such companies. Read Full Post…
Bottom line: Wanda’s new FIFA sponsorship is an opportunistic and savvy move both politically and financially, while CMC’s new smaller soccer investment also looks like a good play to win goodwill from Beijing.
Wanda, CMC in new soccer plays
China’s recent fascination with global sports deals continues, with word of major new tie-ups involving 2 big fans of President Xi Jinping’s recent call to improve the nation’s poor performance in soccer. The larger deal has an opportunistic Wanda Group signing on as China’s first top-tier sponsor of FIFA, the world soccer body whose reputation has suffered lately due to a major corruption scandal. The second deal has the acquisitive China Media Capital (CMC) investing in in SoccerWorld, a British operator of sports stadiums.
Both deals have a strongly political element, since Chinese President Xi Jinping is personally a big soccer fan and has appealed to China’s private sector to help improve the nation’s performance at the world’s most popular sport. Some of China’s other top corporate leaders have also answered that call, including Alibaba (NYSE: BABA) founder Jack Ma, leading web portal Sina (Nasdaq: SINA) and electronics retailing giant Suning (Shenzhen: 002024). Read Full Post…
Bottom line: LeEco’s new alliance with 6 car makers and rapid expansion of its sports programming unit look like shrewd moves to position itself as a major player in 2 big new growth areas.
LeEco in new car tie-up, fund raising
Following a relatively quiet period for one of China’s more talkative companies, online video leader LeEco (Shenzhen: 300104), formerly known as LeTV, is back in the headlines with 2 relatively large deals in the auto and sports sectors. The first has LeEco signing an alliance with some of China’s leading car makers, who have agreed to use its entertainment system in their vehicles. The second has LeEco’s sports unit raising 7 billion yuan ($1.1 billion) in its latest fund-raising round.
The pair of stories highlight 2 focus areas for LeEco, one of China’s oldest online video companies and the only one that has remained independent as others all got purchased by bigger Chinese Internet companies. LeEco is trying to move aggressively beyond its original area as an online video specialist by obtaining more exclusive content, and also by offering its products and services over the growing number of channels that consumers use to access entertainment and information. Read Full Post…
Bottom line: Huayi has the potential to become one of China’s leading makers of Hollywood-style film and video, with a strong track record that has helped to attract major partners for a growing string of well-conceived production deals.
Huayi destined for China stardom?
Two savvy new deals this week are casting a spotlight on fast-rising rising film star Huayi Bros (Shenzhen: 300027), which is fast emerging as China’s most promising independent film-maker that could someday attain Hollywood-level status. Huayi is the lone company in my “favorite Chinese stock” series from China’s Nasdaq-style ChiNext board, which is typically quite volatile and often looks more like a casino than a serious stock exchange.
But despite any volatility in its share price, Huayi has shown an ability to consistently make movies and other entertainment products that get strong audience reception, laying the foundation for strong future growth. The company has become a regular fixture in the headlines, including the 2 new production deals this week that both look quite promising. Read Full Post…
Bottom line: Xunlei’s performance and stock price could come under pressure over the next year due to stiff competition in China’s consolidating online video market and lack of support from struggling strategic partner Xiaomi.
Xunlei swings to quarterly loss
As rumors swirl of a potential merger between the online video services of Tencent (HKEx: 700) and Sohu (Nasdaq: SOHU), smaller rival Xunlei (Nasdaq: XNET) has just announced its latest quarterly results that show why it may be difficult for the company to remain independent in the rapidly consolidating sector. Xunlei swung to a loss in the quarter and saw its revenue contract — hardly encouraging signs for a company that’s already quite a small player in China’s fiercely competitive online video market.
The big “elephant in the room” in this instance is struggling former smartphone sensation Xiaomi, which purchased 30 percent of Xunlei around the time of its 2014 IPO for a reported price of about $200 million. Xiaomi went on to form a content distribution service with Xunlei last summer, leading me to predict that it could make an offer to buy the company outright. (previous post) Read Full Post…
