Bottom line: A brouhaha that has seen Alibaba suspended from an anti-counterfeiting group just a month after joining is an embarrassment but won’t have a major longer-term impact on the company’s stock.
Tiffany quits anti-piracy group after Alibaba joins
A brouhaha over the admission of Alibaba (NYSE: BABA) to a leading US anti-piracy coalition has taken a somewhat strange twist, with word that the group has formally suspended the e-commerce giant just a month after it joined. The development occurred after several of the International Anti-Counterfeiting Coalition’s (IACC) members quit after the group accepted Alibaba, including the latest defection last week by Tiffany & Co.
Tiffany’s defection followed earlier withdrawals from the IACC by 2 other luxury goods makers, Michael Kors and then Gucci a short time later. (previous post) The coalition’s members were unhappy because of Alibaba’s previous status as operator of marketplaces with rampant trafficking in counterfeit goods, even though the company has pledged to strongly step up its fight against such trade. Read Full Post…
Bottom line: Alibaba’s new cloud tie-up shows that Korea is a primary market for its global expansion, while the new $4.5 billion funding for its Ant Financial affiliate could be followed by an IPO within the next 12 months.
Alibaba in Korea cloud initiative
E-commerce giant Alibaba (NYSE: BABA) is in a couple of major headlines today, led by word that its Ant Financial affiliate has just raised a whopping $4.5 billion in only its second-ever funding round. That particular story has been rippling through the headlines for a few weeks now, and is most notable because the deal is finally done and is triple the company’s original fund-raising target.
The other headline has Alibaba itself in a new deal to launch cloud computing services in South Korea, working in a partnership with a unit of local telecoms giant SK Telecom (Seoul: 017670). This particular deal is interesting because it represents Alibaba’s recent search for global growth stories, in a bid to satisfy investors worried about a slowdown in its home China market. Read Full Post…
Bottom line: Ant Financial could raise more than $22 billion in a 2017 IPO if China’s Internet bubble remains intact for the next year, though there’s a 50-50 chance that bubble will burst and the company’s value will stagnate or even come down.
Ant Financial targets massive dual listing
Just a week after reports emerged that it was nearing one the biggest fundings of all time by a private Chinese company, a new report is saying that Alibaba-affiliated (NYSE: BABA) Ant Financial is on the cusp of formally closing a massive capital raising of more than $3.5 billion. Flush with all that cash from only its second funding round, the company is looking quite confident and saying it hopes to make the biggest IPO of all time on a Chinese domestic stock exchange.
Specifically, the latest report in the influential China Business Network says Ant hopes to eclipse the current record held by the 2010 IPO from Agricultural Bank of China (HKEx: 1288; Shanghai: 601288), one of China’s big 4 state-run lenders. Ant’s offering could come as soon as next year in a dual listing in China and Hong Kong, following the surprise disclosure that Ant would meet the strict profitability requirements for such a listing . Read Full Post…
Bottom line: Pony Ma’s big charitable donation reflects some restlessness with his Tencent empire, while Robin Li’s potential pursuit of the AC Milan soccer club reflects a recent interest by Chinese billionaires in sports club ownership.
Robin Li chasing AC Milan?
Two of China’s richest Internet entrepreneurs are in the headlines today for their personal spending, led by a huge gift from Tencent (HKEx: 700) chief Pony Ma as he follows many of his western peers into philanthropy. Meantime, Baidu (Nasdaq: BIDU) chief Robin Li may also be following several of his Chinese peers into the realm of sports team ownership, with word that he may be one of the leaders of a group aiming to buy Italian soccer club AC Milan.
Neither of these stories will have much impact on Tencent or Baidu, since both involve each companies’ founder engaging in personal interests. But they do provide some insight into the personalities of these multi-billionaires, who still make most or all of the major decisions about their companies. Read Full Post…
Bottom line: Massive new fund raising by Ant Financial and Didi Kuaidi show there’s still lots of money looking to invest in emerging Chinese industries, though current valuations are overblown and likely to stagnate as China’s economy slows.
Ant Financial raises $3.5 bln
Every time I write that new funding seems to be cooling for Chinese tech companies, new reports emerge of yet another mega-funding. Two such new fund-raisings are in the headlines as the new week begins, led by a massive $3.5 billion new round for Alibaba-affiliated (NYSE: BABA) Ant Financial. The other mega-deal has homegrown car services provider Didi Kuaidi poised to raise $1.5 billion or more in new funding, as it vows to outspend an equally aggressive Uber for supremacy in the China market.
These 2 fundings show there’s still plenty of money chasing hot deals in China’s emerging industries, many in the tech and financial sectors. Two of my younger friends here have left more traditional media jobs over the last year to join the crowded field of private equity firms that are funding many of these deals, allowing hot companies like Didi Kuaidi and Ant to easily meet their targets and achieve very high valuations in the process. Read Full Post…
Bottom line: Starwood’s board is likely to reject a new raised offer for the company from Anbang and keep its recommendation to accept a lower bid from Marriott, which offers more certainty of closing a deal and also better long-term prospects.
Anbang ups the ante in Starwood bidding war
The latest development in the bidding war for US hotelier Starwood (NYSE: HOT) looks both expected and unexpected, with word that Chinese suitor Anbang has upped its offer to top the most recent bid from rival Marriott (NYSE: MAR). I say the move looks expected based on my previous assessment that Anbang looked determined to buy Starwood at any price. But the new bid is also a bit unexpected because Chinese media reported last week that the nation’s insurance regulator was likely to veto such a deal, which seemed to show Anbang might drop its pursuit of the purchase that is now valued at $14 billion.
The latest developments also include a response from Marriott, which seems to be saying “enough already”. That would indicate Marriott doesn’t plan to raise its latest bid, which is about 6 percent lower than the new one from Anbang, and instead let Starwood’s board decide which offer to recommend. Read Full Post…
A new stock exchange being planned for Shanghai ran into unexpected headwinds last week, when signals coming from Beijing hinted at delays or even a possible scrapping of the board aimed at fostering emerging industries. Observers said the setback could deal a blow to fast-growth companies like Baidu-linked (Nasdaq: BIDU) online video service Qiyi.com and Alibaba’s (NYSE: BABA) Ant Financial, depriving them of an important source for new funding to fuel their development.
But the truth is that China already has two major specialty boards to complement its two main boards in Shanghai and Shenzhen. One of those, the ChiNext, is a Nasdaq-style enterprise board launched in Shenzhen in 2009. The other is a 3-year-old Beijing-based over-the-counter style board, often called the Third Board. The older ChiNext specializes in more mature high-growth start-ups, many of which would have previously gone overseas to list, while the Third Board focuses on earlier stage companies that are often still losing money. Read Full Post…
Bottom line: Domestic buyers are likely to comprise most of the investors in Ant Financial’s latest fund raising, though the use of foreign advisers indicates some overseas participation may also be allowed.
Ant Financial raises new funds
Ant Financial, the financial services arm of e-commerce giant Alibaba (NYSE: BABA), is going back to investors for a new mega fund-raising, just a year after taking money from private investors for the first time. But any foreigners hoping to buy into Ant will probably be disappointed, since it appears this new funding round will be mostly open to Chinese institutional buyers. Likewise, Ant’s IPO that could come as soon as next year is likely to happen on one of China’s domestic stock markets, again locking out foreign investors.
Perhaps it’s only fair that foreign investors stand on the sidelines in Ant’s high-growth story, since such investors already have easy access to some of China’s top private companies that are listed overseas. By comparison, domestic Chinese investors have little or no access to shares of Alibaba, Baidu (Nasdaq: BIDU) or Tencent (HKEx: 700), even though that trio of corporate giants derive nearly all their money from China’s booming Internet market. Read Full Post…
Bottom line: China’s anti-trust regulators need to wake up to the growing clout of big nmes like Tencent and Ctrip in emerging industries and move more aggressively to stop them from engaging in anti-competitive behavior.
iKang accuses rival of monopoly behavior
A war of words broke out last week between two of China’s largest private clinic operators, as one accused the other of violating the nation’s anti-monopoly laws with a recent purchase. The case pitting iKang (Nasdaq: KANG) against larger rival Health 100 (Shenzhen: 002044) casts a spotlight on growing concerns about anti-competitive behavior in China’s vibrant private sector, which boasts many companies whose size is already approaching some of the nation’s largest state-run giants.
And yet despite the size of these companies and increasing cases of anti-competitive behavior, China’s anti-monopoly regulators have largely ignored the domestic private sector, focusing instead on big foreign and state-run firms. The validity of iKang’s accusations against Health 100 still need to be proven, since China’s private clinic sector is still very young and may not have the scale to qualify for monopoly consideration. Read Full Post…
Bottom line: Canadian Solar’s Recurrent Energy unit is likely to make its first public filing for a New York IPO in the next 2 weeks and should get a positive reception, while Jumei is likely to quietly de-list from the US in the next 3-4 months.
Recurrent Energy gets big new financing
One of the few Chinese IPOs likely to happen in New York this year is moving closer to the launch gate, with word of major new financing for the power plant-building unit of solar panel maker Canadian Solar (Nasdaq: CSIQ). But while that IPO for Recurrent Energy moves closer to the IPO gate, announcement of a new privatization bid for online cosmetics seller Jumei International (NYSE: JMEI) is far more typical for the market these days.
This pair of stories reflect a growing new reality for US-listed Chinese companies. That reality is seeing some of China’s leading private companies choose New York for their listings, banking on interest from global investors seeking to buy into the China growth story. At the same time, many smaller lesser-known Chinese companies listed in New York have discovered US investors are far less interested in their stories, and are privatizing with plans to re-list and hopefully get higher valuations back in China. Read Full Post…
When does one dud plus one dud equal success? The answer to that question is usually “never”, but our city doesn’t seems unaware of that fact as it gets set to roll out a new short-stay visa waiver program that looks remarkably similar to another 3-year-old one that failed to attract much interest.
The new program will allow visitors from 51 countries to enter China visa-free for up to 6 days starting over the weekend, or double the limit of up to 3 days under the previous pilot program. The original program suffered from a number of problems, and there’s every indication that this new expanded edition won’t see much improvement. Read Full Post…
