Bottom line: China Life’s $2 billion investment in a US hotel portfolio could mark the height of a bubble of Chinese offshore hotel buying, and high asset values could start to deflate by the end of next year.
China Life buys into US hotel portfolio
Move over, Anbang. China’s largest insurer China Life (HKEx: 2628; Shanghai: 601628; NYSE: LFC) is joining a recent love affair between Chinese investors and overseas hotels, with the announcement that it’s leading a group investing in $2 billion worth of properties in the US. People following the trend will know that unlisted insurer Anbang has been leading this overseas charge, with its recent purchase of a US hotel portfolio for $6.5 billion and its failed bid earlier this year for hotel operator Starwood (NYSE: HOT). Read Full Post…
Bottom line: LeEco’s new US launch for its TVs, smartphones and video service is almost guaranteed to fail due to underwhelming product offerings and stiff competition.
LeEco launches phones, TVs in US
A year after opening its US e-commerce site, online video superstar LeEco (Shenzhen: 300104) has finally launched some of its leading products in the world’s biggest but also one of its most competitive markets. LeEco, formerly known as LeTV, announced it will start selling its smartphones and smart TVs in the US, as well as a new customized version of its core online video service. My main response to this aggressive and ambitious push is: Good luck!
I’ve been a big LeEco doubter for a while now, since the company has gone from relatively obscurity to superstar in just a couple of years through a series of aggressive expansions fueled mostly by taking on new investors and selling its overvalued stock. Its name change from LeTV to LeEco nicely summarizes its aspirations, since the company now bills itself as developer of an ecosystem that delivers entertainment content over a range of devices and services. Read Full Post…
The following press releases and news reports about China companies were carried on October 20. To view a full article or story, click on the link next to the headline.
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LeEco Launches in US With Phones, TVs and Paid Video Streaming Service (English article)
Starbucks (Nasdaq: SBUX) Targets 5,000 Stores in Mainland China by 2021 (Businesswire)
Bottom line: Apple will need to lower its prices to stabilize its position in China, while Huawei could also soon face pricing pressure due to growing challenges from up-and-comers like Oppo and Vivo.
Huawei’s sales surge in Q3
Two of China’s top smartphone brands have been in the headlines in recent days, spotlighting a rapid ascension of the homegrown Huawei and the equally rapid decline of global giant Apple (Nasdaq: AAPL).
On the upside of the story, the surging Huawei announced it recently passed the 100 million mark in smartphones produced this year, reaching the milestone two months faster than in 2015. Meantime, Apple’s CEO was in China for at least the third time this year, announcing a new research and development center in a push to revive his company’s fast-fading position in its largest market after the United States. Read Full Post…
Bottom line: Jin Jiang’s $260 million investment in WeWork is part of the Chinese company’s global expansion, and could see the pair work together to accelerate a move of the shared office concept into China.
Shared office specialist gets backing from Jin Jiang
After getting a chilly reception in the US and France, Chinese companies eager to buy western hotel brands may be taking a different approach in their bid to go global. That appears to be the bottom line in a new move by state-run Chinese hotel giant Jin Jiang (HKEx: 2006; Shanghai: 600754), which has reportedly just invested $260 million in US shared office space operator WeWork.
Foreign hotels have become a flavor of the day for Chinese buyers looking to expand beyond their home market and import foreign expertise to improve their own operations. In addition to brands, Chinese companies have also developed a taste for big-name foreign hotels, led by the purchase of New York’s storied Waldorf Astoria by state-owned Chinese insurer Anbang nearly 2 years ago for an eye-popping price of nearly $2 billion. Read Full Post…
The following press releases and news reports about China companies were carried on October 19. To view a full article or story, click on the link next to the headline.
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China’s Wanda Courts Hollywood With Film Subsidy (English article)
China Life (HKEx: 2628) Invests $2 Bln In Starwood Capital Hotel Portfolio (PRNewswire)
China Unicom (HKEx: 762) Says Profit in First 3 Quarters Down 80.6 Pct (HKEx announcement)
UCar to Raise 10 Bln Yuan in Bet on Car E-commerce (Chinese article)
Honda (Tokyo: 7267) planning new China car factory for 2019 start: sources
Bottom line: Meizu will be forced to sign a new licensing agreement with Qualcomm after new lawsuits against it in the US, France and Germany, while NXP’s sale of a major unit to a Chinese buyer could still get vetoed in Europe despite new US clearance.
NXP chip sale cleared in US
A couple of cross-border stories involving global western chip giants Qualcomm (Nasdaq: QCOM) and NXP (Nasdaq: NXPI) are in the headlines, reflecting China’s growing role in the global semiconductor market. The first has Qualcomm suing Chinese smartphone maker Meizu for patent infringement in the US, Germany and France, some 4 months after taking similar action in China. The other has the US clearing NXP’s planned sale of one of its major units to a Chinese group for $2.75 billion, indicating that Washington won’t attempt to block a deal in the sensitive high-tech chip space. Read Full Post…
Ikea clamps down on freeloading seniors in Shanghai
As fall rapidly descends on Shanghai, two of our city’s newer traditions are in the headlines this week, raising the question of what really defines tradition in a place where change is so rapid.
One headline involves a well-known IKEA furniture store in Xuhui District, whose cafeteria-style restaurant has become famous as a hang-out for lonely retirees. The other involves an eatery famous for its scallion pancakes, or congyoubing, which may soon get a new lease on life after being shut down due to lack of a proper license.
Both stories have become fixtures in our local lore in recent years, meaning many longer-term residents are familiar with them and consider them almost a part of Shanghai’s urban fabric. Read Full Post…
The following press releases and news reports about China companies were carried on October 18. To view a full article or story, click on the link next to the headline.
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Qualcomm (Nasdaq: QCOM) Files Patent Suits Against Meizu in US, Germany, France (Chinese article)
US Approves NXP (Nasdaq: NXPI) to Sell Standard Products Business to China Buyer (GlobeNewswire)
Wanda Hires ex-Disney (NYSE: DIS) Exec to Lead Theme Park Drive – Source (English article)
Qunar (Nasdaq: QUNR) Resumes Relationship With Airlines After 3 Month Break (Chinese article)
Suntech Announces Withdrawal from EU Price Undertaking (PRNewswire)
Bottom line: A new $3.5 billion bank loan to help pay for game developer Supercell and an investment in shared bike service Mobike extend Tencent’s savvy strategy of targeted backing for companies that can quickly contribute to its core businesses.
Tencent nears mega loan for Supercell buy
Leading Internet company Tencent (HKEx: 700) is in a couple of major investment headlines as the new week begins, one in the virtual realm and the other grounded on the streets of major cities like Beijing and Shanghai. The larger of the items comes with word that Tencent is on the cusp of securing a $3.5 billion loan to help pay for its pending purchase of a controlling stake in Finnish game maker Supercell. The other item has the company leading a recent funding round for Mobike, operator of a shared bicycle service that is helping to revive China’s biking tradition. 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…
