The following press releases and news reports about China companies were carried on September 29. To view a full article or story, click on the link next to the headline.
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China Postal Savings Bank (HKEx: 1658) Fails to Make Waves in $7.4 Bln HK Debut (English article)
New Century Cruise (Shenzhen: 002558) to Buy Mobile Games Business Playtika (English article)
Fosun (HKEx: 656) Joins First Public-Private Funded High-Speed Rail Line Group (Chinese article)
Apple (Nasdaq: AAPL) Picks Beijing for First China R&D Center, to Invest 300 Mln Yuan (Chinese article)
Baidu (Nasdaq: BIDU) Self-Driving Car to Debut in 2018, Cost More Than 1 Mln Yuan (Chinese article)
Bottom line: Wanda’s new production tie-up with Sony Pictures will provide movies for its cinema chains in China and globally, but could become a drag on its theater operations if the films are poorly received.
Wanda opens new resort in Hefei
Just days after receiving a major setback to its plans to invest in Paramount Pictures, Chinese Hollywood wannabe Wanda Group has just announced a film production tie-up with Sony Pictures. This particular deal looks decidedly like a consolation prize for Wanda, which is trying to build up a diversified entertainment empire similar to Disney (NYSE: DIS).
The company was bidding for a stake in Paramount, one of the top 6 Hollywood studios, after the studio said earlier this year it wanted to sell a strategic stake in itself. But Paramount ultimately reversed that decision following an internal battle for control of the company’s parent Viacom, leaving Wanda out in the cold. (previous post) This new Sony tie-up doesn’t involve any equity swap, and instead looks mostly like a relatively routine co-production deal that is becoming quite common between Hollywood and Chinese partners. Read Full Post…
Bottom line: Lenovo’s big job cuts at Motorola could auger a write-off of the brand in the next half year, while Xiaomi’s huge offline expansion looks necessary but will further undermine its trendy high-tech image.
Lenovo slashes jobs at Moto
Two former smartphone high-flyers are in the headlines today, with PC giant Lenovo (HKEx: 992) and Xiaomi both taking steps to try and regain their former glory. Lenovo’s move looks like a major retreat for its struggling Motorola brand, which has just slashed more than half of its staff. Meantime, Xiaomi has just rolled out two higher-end models in a bid to go upscale. But what caught my attention were details of the company’s plans to sharply boost its offline presence in the latest reports.
Both stories reflect companies in transition, after each tumbled from the ranks of China’s top smartphone brands due to failure to build a loyal customer base. Lenovo bought Motorola for $2.9 billion 2 years ago and was hoping to position the faded brand as its premium product line. Meantime, Xiaomi skyrocketed to fame 3 years ago partly on an online-only sales model that helped it control costs and position itself as a trendy, cutting-edge brand. Read Full Post…
The following press releases and news reports about China companies were carried on September 28. To view a full article or story, click on the link next to the headline.
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Lenovo (HKEx: 992) Cuts 1,000, Including More than Half of Motorola Staff (Chinese article)
Blizzard, NetEase (Nasdaq: NTES) Renew Operation Agreement in China (PRNewswire)
Paid Q&A Service Fenda Reappears After 47 Day Pause, Only Offers Medical Advice (Chinese article)
Starbucks (Nasdaq: SBUX), Master Kong in Tie-Up for Drinks from 10 Yuan (Chinese article)
Xiaomi Guns for Apple (Nasdaq: AAPL) With Latest Premium Smartphone (English article)
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: Chinese companies need to become more proactive in ending practices that harm consumers, or risk facing pressure from regulators and hurting their prospects for expansion abroad.
Telcos get tough with real name registration
A campaign requiring all mobile phone users to register with their real names was in the headlines for much of last week, in the latest step to curtail rampant phone fraud in China that has grabbed recent attention due to several high-profile cases. Notably, the real-name registration drive was led by 6 government ministries, rather than the nation’s 3 major wireless carriers whose networks are the primary platform for committing most of the fraud.
Both the government and carriers have known about this kind of fraud for years, but did little to aggressively tackle the problem until the recent wave of negative publicity. Read Full Post…
The following press releases and news reports about China companies were carried on September 27. To view a full article or story, click on the link next to the headline.
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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…
The fast lanes of Shanghai’s streets have been full of change these last few months, in a campaign by thousands of police and other assistants to tame our unruly traffic. But this week’s column takes us instead to the slower lanes of the streets of Shanghai, where a quieter revolution is reviving China’s bicycling tradition.
In a somewhat unusual twist, this new revolution is both high-tech and low-tech at the same time, involving the roll-out of two new Internet-based leasing services deploying thousands of very basic bikes in the city. The revolution seems to be centered in my own stomping grounds in the Hongkou and Yangpu districts, due to the high concentration of wide streets, and students and young professionals who are the primary audience for such services. Read Full Post…
The following press releases and news reports about China companies were carried on September 24-26. To view a full article or story, click on the link next to the headline.
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P2P Lender Lufax Taps 4 Banks for HK IPO to Raise up to $5 Bln: Sources (English article)
Fake Bank Documents Discovered From China Group Buying AC Milan (Chinese article)
Shanhai Capital to Acquire Analogix Semiconductor for Over $500 Mln (Businesswire)
Xinhuanet, Bank of Shanghai Among 12 Companies Approved for Domestic IPOs (Chinese article)
6 Agencies Requires 100 Pct Real Name Registration for Mobile Users by Year End (Chinese article)
Bottom line: Smartisan’s plummeting value and big losses point to a possible sale or closure of the company by year-end, while LeEco’s weak smartphone sales reflect the market’s overheated condition.
Smartisan value gets hammered
Separate stories from 2 of China’s decidedly second-tier smartphone brands highlight ongoing stress in the overheated sector, even though a major casualty has yet to emerge. But that could change soon, with word that the asset value of high-brow brand Smartisan has plummeted over the last year, as disclosed in a new filing by one of its investors. Meantime, online video superstar LeEco (Shenzhen: 300104) has disclosed sales figures that look quite weak for its own smartphone business, which it launched more than a year ago with big hopes.
I’ve previously predicted we would see one or two major casualties from China’s crowded smartphone sector this year, though we have yet to see any big names close or get purchased. But there are still 3 months left in 2016, so perhaps we’ll see one or two mid-tier players finally decide to call it quits. Read Full Post…
