Bottom line: New data from 2 separate reports show the number of smaller venture deals is steadily declining in China, creating a cash crunch for startups as private sector investment slows sharply.
Venture investment deals slow in Q2
In a coincidence of timing, 2 separate consultants that track venture capital spending have just released second-quarter data that show very differing trends for China. China boosters will inevitably like the new figures from Venture Pulse, which showed that venture capital spending in China jumped 26 percent in the second quarter. Meantime, China bears will undoubtedly point to separate data from a Prequin Ltd report that show venture funding in the country plummeted by more than half in the quarter to its lowest level in almost 3 years. Read Full Post…
Bottom line: Zhou Hongyi should be commended for completing his privatization of Qihoo in the face of numerous obstacles, though his plans to re-list his company in China might take at least 1-2 years.
Qihoo completes de-listing
I haven’t always been a fan of security software specialist Qihoo 360 (NYSE: QIHU) over the years due to some of the overly aggressive and often ethically questionable business practices of chief Zhou Hongyi. But I have to admire the outspoken Zhou today, following word that he has reportedly just completed the biggest buyout of a US-listed Chinese company in history despite facing numerous obstacles that seems unsurmountable at times.
Far smaller US-listed Chinese companies have abandoned their plans to privatize due to choppy markets and the difficulty of completing such deals. But Zhou remained steadfast throughout in his desire to privatize his company, with the result that Qihoo’s shares will officially de-list with the start of trade on Monday, July 18, according to new Chinese media reports. (Chinese article) Read Full Post…
The following press releases and news reports about China companies were carried on July 20. To view a full article or story, click on the link next to the headline.
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Baidu (Nasdaq: BIDU) Criticized Over Proposed Valuation for iQiyi Sale (English article)
China Revenue From iOS Games Passes US for First Time (Chinese article)
Babytree Completes 3 Bln Yuan Funding, Casts off VIE Structure (Chinese article)
Chinese Venture Fundraising at Three-Year Low as Startups Hurt (English article)
Ballard (Nasdaq: BLDP) Surges on Deal to Build Fuel Cell Factory in China (English article)
Bottom line: Baidu could suffer more lost business after purging stealth advertisers engaged in gambling and sex services, while its new credit-scoring tie-up looks like a smart way to take advantage of its huge volumes of user data.
Baidu purges search results of online gambling sites
A day after appearing in 2 major global entertainment stories, online search leader Baidu (Nasdaq: BIDU) is back in the headlines at home in a new scandal involving online gambling sites that used stealth methods to promote themselves on Baidu’s search service. Normally I would say this particular scandal looks relatively minor and wouldn’t have a major impact on Baidu. But such scandals have suddenly become much bigger news following one back in May, which was centered on Baidu’s longtime practice of combining paid search results with organic ones without disclosing that mixture. Read Full Post…
Bottom line: A Chinese group’s decision to downsize an earlier deal to buy Norway’s Opera was likely due to insufficient funds to complete the deal, but will still give Qihoo an important new browser asset in its drive to go global.
China group downsizes deal for Norway’s Opera
Just a day after trumpeting its successful privatization from New York, software security specialist Qihoo 360 (NYSE: QIHU) is being more low-key in announcing the new failure of its bid for Norwegian browser maker Opera (Oslo: OPERA). In fact, Qihoo was really just one member of a group that bid $1.2 billion earlier this year to buy Opera, owner of the world’s fourth most popular web browser. (previous post) Following the decision to scrap the sale, the 2 sides have simultaneously announced a smaller deal that would see the Chinese group buy about half of Opera’s assets for about $600 million. Read Full Post…
Bottom line: Beijing needs to overhaul its new energy vehicle policies to reward companies that truly innovate and manufacture cars that buyers are really driving.
BYD loses bulk of big bus order
A series of headlines last week showed how fat and even corrupt China’s booming electric vehicle (EV) sector has become in a very short time, spotlighting an urgent need for reform. The sector’s rapid evolution to its current state repeats a familiar pattern, which sees huge amounts of wasted investment and other inefficiencies emerge when local governments and inexperienced companies flock to industries targeted by Beijing for rapid development. Read Full Post…
The following press releases and news reports about China companies were carried on July 19. To view a full article or story, click on the link next to the headline.
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Chinese $1.2 Bln Takeover of Norway’s Opera Fails, Pursues Alternative Deal (English article)
Didi Chuxing Raises Prices in Multiple Markets to Slow Cash Burning (Chinese article)
Hot Pot Chain Haidilao Makes IPO for Yihai International (HKEx: 1579) Unit (Chinese article)
Bottom line: Baidu’s Robin Li could announce a deal later this week to buy 40 percent of soccer club AC Milan, while his company’s pursuit of Paramount was likely killed by internal fighting at the Hollywood studio.
Paramount spurns Baidu, Wanda
Internet search leader Baidu (Nasdaq: BIDU) is in a couple of major entertainment headlines as the new week begins, led by word that it could finally announce a highly anticipated deal that would see it buy a major stake of European football club AC Milan. At the same time, separate new reports are saying that the company was rejected in a recent bid for a strategic stake in Hollywood giant Paramount, the studio arm of Viacom (NYSE: VIAb). Those same reports are saying Wanda Group, another Chinese entertainment aspirant, was also rejected in pursuit of a similar deal. Read Full Post…
Bottom line: China Telecom’s cancellation of roaming fees and focus on the Internet of Things signal it wants to become a leader and aggressively roll out new services under its new chairman Yang Jie.
China Telecom to end roaming fees
Just days after receiving a vote of confidence by a major global investor, China’s smallest mobile carrier China Telecom(HKEx: 728; NYSE: CHL) is showing new signs of life that make it look a potential company to watch among the nation’s stodgy big 3 teclos. Those signs are coming in one of the first major speeches from China Telecom’s new chief, who says the telco will become China’s first to eliminate domestic roaming fees, a move that was long overdue but has been strongly resisted by the sector. At the same time, Yang Jie is saying China Telecom will place strong emphasis on Internet of Things services, which many believe are the wave of the future. Read Full Post…
This week’s Street View centers on Xuhui District, where 2 major developments spotlight how rapid changes are creating headaches for some residents and undermining businesses that were formerly thriving. The first development sent shockwaves through the expat party-going crowd, as Xuhui’s top official announced plans to shut down most of the bars and restaurants on the trendy Yongkang Lu in the former French Concession area. Read Full Post…
The following press releases and news reports about China companies were carried on July 16-18. To view a full article or story, click on the link next to the headline.
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Baidu (Nasdaq: BIDU) Aims to Buy AC Milan Soccer Club for $437 Mln – CCTV (Chinese article)
WeChat International Team Leader Defects to Facebook (Nasdaq: FB) (Chinese article)
Samsung Seeks Stake in China Electric Carmaker BYD (HKEx: 1211) (English article)
China Telecom (HKEx: 728) to End Domestic Roaming Fees, Focus on Internet of Things (Chinese article)
LeEco (Shenzhen: 300104) Denies Plans to Acquire Low-Cost TV Maker Vizio (Chinese article)
