This week’s Street View takes us to Shanghai’s cyber realm, where I feel compelled to write about a recent trend that has seen an explosion in chat groups on the hugely popular WeChat mobile messaging platform. I write occasionally about cyberspace in this column, usually focusing on apps that make life easier for Shanghai residents for things like hailing taxis and locating nearby public toilets.
But the chat group phenomenon is slightly different, as it doesn’t have any real-world applications and is solely designed to facilitate better communication among groups of friends, acquaintances, colleagues, family members, or simply people with a common interest. Such groups really are quite useful in some cases, for example by helping people to plan an outing or for students to pass on messages about their latest class assignments. Read Full Post…
The following press releases and news reports about China companies were carried on July 23-25. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
MasterCard (NYSE: MA) May Apply for China Payment License This Year (English article)
Baidu (Nasdaq: BIDU) Maps Enters 13 South American Countries as Olympics Nears (Chinese article)
Samsung (Seoul: 005930) Countersues Huawei in Lawsuit Tug-of-War (Chinese article)
Giant Interactive Said to Lead Group Bidding for Caesars Online Game Unit (English article)
Private Car Service Provider UCar Lists on China OTC, Valued at 40 Bln Yuan (Chinese article)
Bottom line: Didi and Uber may reach a truce in their China price wars under pressure from their investors, and could ultimately merge their China operations in discussions that could begin later this year.
Didi, Uber under pressure to end price wars
The past year has seen some mergers of former bitter rivals due to financial pressures, and the latest reports indicate yet another such marriage could be coming between hired car services giants Didi Chuxing and Uber. The reports are grounded in word from insiders that the pair have begun talks about ending their bitter price wars, which have helped them to gain big market share but are also costing them millions or even billions of dollars in losses. Those talks have naturally led some to speculate that the pair might even merge, though in my view that possibility seems rather low, at least right now. Read Full Post…
Bottom line: BYD’s latest new share issue, including a sale to Samsung, reflects a dire need for cash as its electric vehicles fail to gain traction, and could be followed by more fund raising in the next 12 months.
BYD issues more new shares
Sputtering electric car maker BYD (HKEx: 1211; Shenzhen: 002594) is making some big adjustments in a bid stabilize its financial footing, with word of a major new share sale that includes the addition of Korea’s Samsung (Seoul: 005930) as a stakeholder. At the same time, that same new share issue has further diluted one of the company’s oldest and most loyal stakeholders, US billionaire investor Warren Buffett. Following this latest shift, Buffett’s holdings in the company are about half of what they were when he first purchased nearly 10 percent of BYD in 2008, when it looked poised to become a new energy car superstar. Read Full Post…
Bottom line: Facebook’s new hire of a top WeChat executive could be the latest signal that it expects to get permission to launch a China-based service soon, possibly by the end of this year.
WeChat exec defects to Facebook
Following several months of relative silence, social networking (SNS) giant Facebook (Nasdaq: FB) is back in the China headlines, with word of a major executive poach from China’s leading SNS company. This particular headline is filled with mixed signals. On the one hand, the hire of a former top executive from WeChat looks like a significant move closer to China, since the hugely popular Chinese SNS operator would be Facebook’s main rival if it’s ever allowed into China. But on the other hand, the executive is a foreigner from WeChat’s international division, which has been a poor performer in the service’s weak attempts to go global. Read Full Post…
The following press releases and news reports about China companies were carried on July 22. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
Uber, Didi Chuxing Want to End Rivalry, Discuss Possible Merger – Source (Chinese article)
Bottom line: IPOs by China Lending, China Film and Babytree should all do relatively well, and their diverse listing destinations reflect the growing choices available to Chinese companies for public offerings.
Babytree raises 3 bln yuan
A trio of mid-sized entrepreneurial companies are in the IPO headlines, including one headed for New York, another opting for Shanghai and a third eyeing a possible listing on Hong Kong’s underutilized board for high-growth companies. The first of the trio, which will make its trading debut this week in New York, comes from micro lender China Lending Corp (Nasdaq: CLDC). The second comes from China Film Co, the nation’s largest movie distributor; and the third comes from baby products seller and online community operator Babytree, which has just raised a nifty 3 billion yuan in pre-IPO funding. Read Full Post…
Bottom line: New data shows Huawei’s smartphone sales growth slowed sharply in the second quarter, and the company will be lucky to log 20 percent annual growth due to saturation in its home China market.
Huawei smartphone growth slows sharply in Q2
The first of many reports for second-quarter smartphone sales has just come out, revealing one of the first declines in more than a year for the surging Huawei. At the same time, the new data from TrendForce show that surging Chinese brands Oppo and Vivo are also seeing rapid slowdowns in their recent breakneck growth. The bigger picture is that the global smartphone market is slowing sharply or even contracting after years of rapid growth, with global leaders Apple (Nasdaq: AAPL) and Samsung (Seoul: 005930) also suffering big drops this year. Read Full Post…
Bottom line: LeEco is likely to buy a controlling 30-40 percent of struggling low-cost Taiwanese TV maker AmTRAN in a deal to be announced next week, as part of its bigger plan to build an ecosystem of entertainment products and services.
LeEco to invest in Vizio?
Media have been buzzing these last few days about rumors of a potential acquisition by online video superstar LeEco (Shenzhen: 300104) of the struggling low-cost TV brand Vizio, owned by Taiwan’s AmTRANTechnology (Taipei: 2489). In usual fashion, LeEco has denied such a takeover, and even took the unusual step of issuing a formal statement saying it has no such plans. But that wouldn’t rule out a major strategic investment in money-losing AmTRAN, or an acquisition of the company by a non-listed unit of LeEco, formerly known as LeTV. Read Full Post…
The following press releases and news reports about China companies were carried on July 21. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
Strong Demand From China Buoys Qualcomm (Nasdaq: QCOM) Forecast (English article)
Midea (Shenzhen: 000333) Takes 85.69 Pct of Kuka After Tender Offer (Chinese article)
China Second, Behind US, on 2016 Fortune 500 List of Biggest Global Companies (English article)
China Box Office Growth Slows to 21 Pct in H1, Unlikely to Reach 60 Bln Yuan Target (Chinese article)
China Film Plans Nation’s Largest Entertainment-Industry IPO (English article)
Bottom line: Baidu will raise the valuation of iQiyi as it sells the unit to outside investors, in a bid to avoid insider dealing accusations, while it will also suffer a revenue hit as it evicts advertisers who operate illegal gambling sites.
Baidu under fire for low iQiyi valuation
Internet search giant Baidu (Nasdaq: BIDU) can’t seem to catch a break over the past week. First the company was hit by reports of a major rejection in Hollywood, and then an investigative report revealed it was hosting links to illegal gambling sites. Now the company is being rejected again by US investors, who are complaining that Baidu is grossly undervaluing its iQiyi online video service as it prepares to sell the unit to a group led by company chief Robin Li. At the same time, the earlier gambling site scandal is taking a new twist, with the Internet regulator reportedly opening an investigation into the matter. Read Full Post…
