Bottom line: Car Inc’s hired car services unit’s $5.5 billion valuation on China’s New Third Board is hugely overinflated, while Yidao’s new clash with Tencent shows the regulator needs to become more active in oversight of WeChat.
Two of China’s second-tier hired car services providers are in the headlines heading into the weekend, as these smaller companies fight an uphill drive to attract attention away from industry giants Didi Chuxing and Uber. The larger of the 2 stories has the hired car services unit of car rental leader Car Inc (HKEx: 699) receiving approval for a listing on China’s over-the-counter (OTC) New Third Board, valuing the company at a hefty 37 billion yuan ($5.5 billion). The second story has Yidao getting in a tussle that has seen promotion of its services blocked on Tencent’s (HKEx: 700) wildly popular WeChat platform . Read Full Post…
Bottom line: Xiaomi’s new campaign that includes the hiring of 3 celebrity spokespeople and an aim of moving upscale looks like a move of desperation and is unlikely to produce strong results due to difficulty of making such a transition.
Xiaomi tries star power to revive fortunes
Struggling smartphone maker Xiaomi is having a bit of an identity crisis these days, as it tries to reposition itself in a bid to jump start its growth by becoming more mainstream. At the same time, the company also wants a more upscale image as part of its new look, in a nod to the intense competition that has thrust many makers of lower-end models into the red. To make the transition, the company is embarking on a major new campaign that includes the hiring of 3 big celebrities to promote the new image. Read Full Post…
Bottom line: Google’s new opening of an experience center in Shenzhen is the latest signal of a planned return to China, which could include the launch of a Google Play Store and Nexus smartphones in the market by year-end.
Google opens experience center in Shenzhen
After a few months of relative silence, global Internet titan Google (Nasdaq: GOOG) is back in the China headlines with a new move that’s restarting talk of a return to the market after a 6-year absence. This particular China homecoming has now been in the headlines for about a year, meaning it’s not really new and would be quite a disappointment if it doesn’t happen. Still, China is a notoriously difficult place to do business, especially in sensitive high-tech areas involving the Internet, and there’s still a small chance such a homecoming plan could collapse. Read Full Post…
The following press releases and news reports about China companies were carried on July 15. To view a full article or story, click on the link next to the headline.
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Xiaomi in Major New Campaign to Go Upscale (Chinese article)
Car Inc’s (HKEx: 699) Hired Car Services Unit Approved to List on New Third Board (Chinese article)
Qihoo 360 (NYSE: QIHU) to De-List Before July 18 Market Opening (Chinese article)
Tencent (HKEx: 700) Buys Controlling Stake in Online Music Firm China Music Corp (English article)
Bottom line: Ericsson’s new tie-up with Inspur looks like a savvy move to gain a foothold in the nation’s fast-growing market to supply infrastructure to power Internet-related products and services.
Ericsson ties up with Inspur
Chinese IT services firm Inspur has just scored a major new partnership, with word that it’s forming a new tie-up to offer cloud and other Internet-based services with global telecoms equipment leader Ericsson. (Stockholm: ERICb). The new tie-up adds to a growing stable of similar alliances between Inspur and big-name foreign partners, following previous tie-ups with IBM (NYSE: IBM) and Cisco (Nasdaq: CSCO).
We should begin by pointing out that this kind of tie-up isn’t that uncommon for big foreign high-tech names, since Beijing often prefers that such companies form joint ventures for doing business in the vast Chinese market. That drive for tie-ups has accelerated over the last year, following Beijing’s roll-out of a new national security law that requires foreign high-tech product makers to work with Chinese partners when selling to the government or big state-owned companies. Read Full Post…
Bottom line: GIC’s investment in China Telecom represents a vote of confidence in the company over the next 2 years, as it makes strong gains in 4G and data services and could become more aggressive under new leadership.
GIC bets on China Telecom
China’s smallest wireless carrier China Telecom(HKEx: 728; NYSE: CHA) has just received a vote of confidence from one of the world’s better-known global investors, with the new disclosure that Singaporean sovereign wealth fund GIC has purchased 5 percent of the telco’s Hong Kong-listed shares. That decision comes amid mixed signals coming from China Telecom, which has just received new leadership after its former chairman was booted out for corruption. On a more positive note, China Telecom has been posting strong growth in its year-old 4G business, though the foundation for that growth was largely laid by yet another previous leader who left the company about a year ago. Read Full Post…
Bottom line: Huawei’s aggressive H2 targets for its Honor sub-brand hint that sales for its core Huawei smartphones may be stumbling, while rumors of a wave of executive departures at Smartisan also hint at dire financial conditions at the company.
Huawei calls on Honor to boost smartphone sales
New distress signals are coming from China’s overheated smartphone sector in the form of headlines involving leader Huawei and smaller niche player Smartisan. Before I detail the headlines, I should note that some may disagree with my interpretation, since neither news item directly confirms any trouble. But that said, nobody ever wants to admit to bad news, and in both cases the headlines appear to confirm earlier signs of stress at each company. Read Full Post…
The following press releases and news reports about China companies were carried on July 14. To view a full article or story, click on the link next to the headline.
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Singapore’s GIC Buys 5 Pct of China Telecom’s (HKEx: 728) H-Shares (HKEx announcement)
Inspur, Ericsson (Stockholm: ERICb) Form Tie-Up in Cloud, Internet of Things (Chinese article)
Yum (NYSE: YUM) Shares Rise After CEO Signals China Momentum (English article)
Wanda to Bring First International Soccer Tournament to China (company announcement)
Tishman Teams With Lenovo (HKEx: 992) on South China Real Estate Development (English article)
Bottom line: Wanda will use AMC as its flagship for building a global entertainment empire, which will include its newly purchased European Odeon theater chain and could also include a revised higher bid for US operator Carmike.
Wanda’s AMC in deal to buy UK’s Odeon
The acquisitive Wanda Group is in a couple of major headlines in its quest to build a global movie theaters empire, led by a new blockbuster acquisition that will see it buy Britain’s Odeon and UCI CinemasGroup for about $1.2 billion. But while it advances in Europe, the company is hitting more resistance in the US, where Wanda already owns top player AMC Entertainment (NYSE: AMC). Wanda is trying to expand its US base by buying smaller operator Carmike Cinemas (Nasdaq: CKEC), but now new reports are saying the company is unlikely to raise its bid to a level that investors are demanding. Read Full Post…
Bottom line: Autohome’s shares will come under pressure after a mass defection of its middle management, most likely to start a rival company, while Ku6 is likely to close shop within the next 2 years following its de-listing from New York.
Mid-level managers leave Autohome en masse
A couple of new twists are bubbling through the headlines in a wave of buyout offers for US-listed Chinese companies, led by the latest signs that a privatization for online car site Autohome (NYSE: ATHM) is effectively dead. Those signs are coming in reports of a wave of resignations by mid-level company executives, following a failed management-led buyout bid. Meantime, online media site Ku6 Media (Nasdaq: KUTV) has formally completed its own buyout offer, meaning this insignificant player that was once a leader in China’s new media space will probably de-list very soon and could disappear completely within the next 2 years. Read Full Post…
This week we travel from the streets of Shanghai to some of our city’s many parks, which are getting a little friendlier by extending their opening hours during the summer. The move isn’t particularly new and comes every year, but still reminds me each time how different Chinese parks are from the big, open spaces that most westerners enjoy in North America and Europe with mostly unlimited access.
This outdoor story did see one additional new wrinkle here in China last week, when the massive Zhongshan Park in Changning District become the latest in the city to stay open 24 hours. That broke with the earlier practice for nearly all parks in China of closing during the night, supposedly for safety reasons. Read Full Post…
