For the latest news on U.S.- and Hong Kong-traded Chinese stocks, visit our new Bamboo Works site.
Journalist China
Business news from China By Doug Young.
Doug Young, journalist, has lived and worked in China for 20 years, much of that as a journalist, writing about publicly listed Chinese companies.
He is based in Shanghai where, in addition to his role as editor of Young’s China Business Blog, he teaches financial journalism at Fudan University, one of China’s top journalism programs.
He contributes regularly to a wide range of publications in both China and the west, including Forbes, CNN, Seeking Alpha and Reuters, as well as Asia-based publications including the South China Morning Post, Global Times, Shanghai Daily and Shanghai Observer
Bottom line: Rumors of a China Telecom-Unicom merger are probably false since they would leave just 2 big players in the market, though the talk could reflect the regulator’s frustration at the continued dominance of China Mobile.
Regulator hangs up on telecoms merger rumors
Everyone else is buzzing today about rumors that the smaller of China’s 3 telcos would merge, so I feel obliged to add my 2 cents to the discussion, even though the deal has been denied by one of the companies and the industry regulator. Of course this kind of denial isn’t very meaningful in China, where companies will vehemently deny a rumor one day and then the next day announce a deal that showed the talk was indeed correct. But in this case, a merger of China Telecom (HKEx: 728; NYSE: CHA) and China Unicom (HKEx: 763; NYSE: CHU) really doesn’t make much sense for a number of reasons. Read Full Post…
Shanghai is full of fascinating historical stories involving foreigners in China, including the story of thousands of Jewish refugees who fled to the city during World War Two and set up a vibrant community in the Hongkou District. Too many of these stories are neglected and remain largely invisible in Shanghai’s emerging modern landscape, which seems like a huge missed opportunity since this kind of history is a defining part of Shanghai’s unique identity as a meeting point between East and West. Read Full Post…
Bottom line: New online service platforms from Lenovo and Tencent could both do reasonably well, but will face challenges due to inexperience and product limitations, respectively.
Hisense, Tencent join hands in gaming smart TV
The “platform” concept is becoming a hot area in China’s overcharged Internet world, as companies look for newer and better ways to deliver their products and services over a growing number of devices and online channels. That rush is behind 2 of the latest big moves in the space, one from PC giant Lenovo (HKEx: 992) and the other from Internet titan Tencent (HKEx: 700).
Lenovo’s new foray into online products and services has been in the headlines for the last few months, but I’ve finally received some clarification on what exactly is behind its plans for an online platform with the new name of ShenQi. Meantime, Tencent is aiming to boost its leading position in the online gaming space through a new tie-up with household electronics giant Hisense (Shanghai: 600060). That tie-up looks set to produce a new gaming TV that could compete with more traditional consoles from Microsoft (Nasdaq: MSFT) and Sony (Tokyo: 6753). Read Full Post…
Bottom line: Wanda is sending a bad signal by emphasizing its government ties in its latest overseas mega-purchase, reflecting the complex relationship between major Chinese firms and Beijing.
Wanda bounces into sports marketing
If big Chinese companies are trying to show their independence from Beijing, then property giant Dalian Wanda isn’t doing a very good job with its just-announced $1.2 billion purchase of a major European sports marketing firm. The mega purchase of Swiss firm Infront Sports & Media is certainly a major feat, but Wanda has made a questionable decision in focusing on the how the deal will help Beijing’s bid to win more major sporting events, including the 2022 Winter Olympics. Of course I’m being just a tad cynical here, but this kind of talk certainly won’t help Wanda and other major private Chinese companies convince western skeptics of their independence from Beijing. Read Full Post…
The Super Bowl may be the most watched TV program in the US, but it’s still relatively unknown in China due to the lack of popularity of American football. But the sport gained at least a few Chinese fans with its latest airing, as top executives from the likes of PC giant Lenovo (HKEx: 992) and online video firm LeTV (Shenzhen: 300104) tuned in to watch this year’s match-up that saw the New England Patriots defeat the Seattle Seahawks.
Meantime, an executive from the struggling Sina Weibo (Nasdaq: WB) was busy criticizing rival Tencent (HKEx: 700) for the latter’s freeze-out of several major Internet firms from its hugely popular WeChat instant messaging platform. Finally, we’ll end this week’s round-up of tech executive chatter with buzz that hints a former online literature pioneer may be preparing to emerge from a forced retirement, as he returns after a tough business battle of the sort that’s quite common in China. Read Full Post…
Bottom line: The SEC’s settlement with the Big 4 over their audits for US-listed Chinese firms is a positive step for everyone, and should be followed by a broader document sharing agreement between the US and China.
SEC, Big 4 settle China dispute
After more than 3 years of bickering, the US securities regulator has finally resolved a dispute with the Big 4 accounting firms over the way they handle their audits of New York-listed Chinese firms. The sudden settlement is a welcome development not only for both sides in the dispute, but also for the dozens of US-listed Chinese companies that employ the Big 4 as their official accountants. But all that said, the US Securities and Exchange Commission (SEC) must still take one more step and sign a more comprehensive agreement with its Chinese counterpart to ensure it has access to the documents it needs when investigating New York-listed Chinese companies. Read Full Post…
Bottom line: China’s overall Internet growth will continue to slow as the market starts to become saturated, with messaging and other mobile services continuing to steal share from microblogging and video operators.
Microblogging decline bites Weibo
A newly released annual government report on China’s Internet is full of good news for the online business community, with most sectors posting double-digit growth as overall penetration neared the 50 percent mark. But a few sectors stood out as distinctive losers in the report from the China Internet Network Information Center (CNNIC), led by the microblogging space that saw a sharp decline in users.
That’s not too surprising due to departures or pull-backs in the space last year by big names like NetEase (Nasdaq: NTES) and Tencent (HKEx: 700), though it certainly doesn’t bode too well for sector giant Sina Weibo (Nasdaq: WB). Another relative loser was online video, which posted only tiny growth last year as the sector came under regulatory assault aimed at reining in companies like Youku Tudou (NYSE: YOKU) and Baidu’s (Nasdaq: BIDU) iQiyi. Read Full Post…
Bottom line: Apple’s surge in fourth-quarter China sales owes to its iPhone 6 release and growing relationship with China Mobile, though it could have trouble retaining its new crown as the nation’s top smartphone brand.
iPhone sales zoom in China
Skeptics who thought Apple (Nasdaq: AAPL) might be losing its luster in China might have to rethink that theory, following release of a new report that says the gadget giant grabbed the title of China’s biggest smartphone seller for the first time ever in the fourth quarter. That surprising result came as Apple released new quarterly earnings that showed China sales also surged 70 percent in its latest quarter, more than double the pace of its global revenue growth.
The surprising China surge comes as Apple works closely to address Beijing’s concerns about national security risks and the privacy of Chinese iPhone users, issues that reflect one of the continuing challenges it will face in the market. Read Full Post…
Bottom line: Alibaba could make a bid to buy Yahoo as part of a broader overhaul of the relationship between these 2 Internet companies, but personal and other issues could ultimately hamper such a deal.
Yahoo to sell remaining Alibaba stake?
Media have been focused these last 2 days on reports of a new mega purchase by Alibaba (NYSE: BABA) in the insurance space, but another report centers on a far more intriguing possible deal involving the e-commerce giant’s long relationship with faded US search giant Yahoo (Nasdaq: YHOO). That particular relationship has undergone huge changes since the pair first formed their partnership a decade ago, and could easily be the subject of a book. In the latest chapter to that story, a new report is speculating that Alibaba could make a bid for Yahoo in the next year as it seeks to go global following its blockbuster IPO in 2014. Read Full Post…
Bottom line: Wanda Cinema and Spring Airlines represent a new generation of major private companies to list in China, and should enjoy strong share gains over the short to medium terms following their IPOs.
Spring Air leaps on first 2 trading days
There was plenty of spring in the stocks of 2 hot companies that listed in China this week, with budget carrier Spring Airlines (Shanghai: 601021) and theater operator Wanda Cinema Line (Shenzhen: 002739) jumping 44 percent in their trading debuts. The pair are part of a new generation of privately owned companies starting to list on China’s main stock markets, stealing the spotlight from an older group of state-run firms that still dominate the country’s 2 main stock exchanges in Shanghai and Shenzhen.
Obviously profits and broader performance will be the biggest determiner of whether these companies’ stocks continue to rise after the euphoria of their IPOs starts to fade. But from the perspective of a western buyer like myself, Wanda Cinema and Spring Air are 2 of the first Chinese-listed firms that I’ve seen whose stocks I would personally consider buying. Read Full Post…
Internet executives were busy quashing a number of rumors on their microblogs this week, with smartphone sensation Xiaomi trying to stamp out reports of bitter relations with SNS giant Facebook (Nasdaq: FB), and e-commerce giant Alibaba (NYSE: BABA) quashing talk of a major new investment in South Korea. But some of the more interesting chatter focused on the concept of company valuations, and just how widely such valuations can vary for China’s dynamic tech firms.
At the same time, a coming flurry of year-end parties began to kick off in the run-up to the Chinese New Year holiday that’s just a month away. The microblogging realm saw e-commerce giant JD.com (Nasdaq: JD) singing its own praises at the company’s annual party, taking a shot at fast-fading rival Dangdang (NYSE: DANG) in the process. At around the same time, a stumbling Sina Weibo (Nasdaq: WB) also held an annual awards ceremony for notable microbloggers, in its own attempt to remain relevant in the social networking realm. Read Full Post…
