Bottom line: Ant Financial is likely to get a low valuation from its new private placement due to the exclusion of foreign investors, but could see the figure reach up to $70 billion by the time of its 2017 IPO if it can rapidly build up its new services.
SOEs squeeze Ant Financial’s valuation
Yet another report has come out about an ongoing private placement by Ant Financial, saying the financial services affiliate of e-commerce giant Alibaba (NYSE: BABA) is now planning a domestic IPO in 2017. That’s a little later than was indicated in previous reports, which were probably a little too optimistic about a company whose various businesses are mostly less than 2 years old.
But the more interesting element in this recent flurry of reports has been what valuation the new private placement will bring for Ant, which is financially separate from the New York-listed Alibaba. Some of the earlier reports indicated Ant could be valued at up to $50 billion, which admittedly looks quite optimistic for a firm at its stage of development. But now the latest reports are bringing the number down sharply, saying the new funding will value Ant at between $35 billion and $40 billion. Read Full Post…
Bottom line: Complaints of problems from a major solar plant builder reflect the difficulty of new construction in China, and could wreak havoc on the sales and finances of panel makers and their construction partners.
Solar entrepreneur Shi complains of bureaucracy
Two solar energy news items are showing both the attraction and also the frustration that developers are feeling as they try to build new clean-energy power plants to help China wean itself from its dependence on fossil fuels. On the attraction side of the story, the industry has just won a major new backer in the form of insurance giant Ping An (HKEx: 2318; Shanghai: 601318), which is teaming up with panel maker Trina Solar (NYSE: TSL) in a new plant-building initiative.
But the frustrations that many plant builders are feeling were on prominent display in a separate report that cited another major developer complaining of the difficulties of new construction. Those kinds of complaints aren’t really new, and are being caused by provincial government interference and other local issues in the many remote locations where new plants are being built. Read Full Post…
Bottom line: The SEC’s settlement with the Big 4 over their audits for US-listed Chinese firms is a positive step for everyone, and should be followed by a broader document sharing agreement between the US and China.
SEC, Big 4 settle China dispute
After more than 3 years of bickering, the US securities regulator has finally resolved a dispute with the Big 4 accounting firms over the way they handle their audits of New York-listed Chinese firms. The sudden settlement is a welcome development not only for both sides in the dispute, but also for the dozens of US-listed Chinese companies that employ the Big 4 as their official accountants. But all that said, the US Securities and Exchange Commission (SEC) must still take one more step and sign a more comprehensive agreement with its Chinese counterpart to ensure it has access to the documents it needs when investigating New York-listed Chinese companies. Read Full Post…
Bottom line: Alibaba’s Ant Financial unit is likely to get a strong valuation with a planned new private placement, and will embark on a series of high-profile moves before making a multibilllion-dollar IPO next year.
Ant Financial eyes 2016 IPO
Alibaba’s (NYSE: BABA) high-profile spat with Beijing is finally starting to subside, paving the way for the company’s affiliated financial unit, Ant Financial, to move into the headlines with word of plans for a major new fund-raising. But anyone holding Alibaba stock shouldn’t get too excited about Ant, which is separate from the listed company and whose rapid rise will only benefit Alibaba founder Jack Ma.
At the same time, other media reports are saying that Internet giant Tencent (HKEx: 700) has formally cleansed its popular WeChat mobile messaging platform of a holiday red-envelope feature from Alipay, Ant Financial’s most valuable asset. That development isn’t a surprise, but it does spotlight one of several major challenges that Ant will face as it tries to carve out a profitable place for itself in China’s fast-evolving financial services sector. Read Full Post…
Bottom line: JD.com CEO Richard Liu needs to behave more professionally in his business and personally lives, or risk seeing the reputation of his company suffer.
JD.com CEO love saga buzzes in cyberspace
China’s high-tech world is filled with colorful personalities, but few have managed to capture the public’s imagination like JD.com (Nasdaq: JD) founder Richard Liu, or Liu Qiangdong, whose love life has been the source of major headlines this week. I personally find such this kind of chatter entertaining but don’t usually write about it, because it’s not really related to the companies these executives represent. But in this case Liu’s antics are an increasing embarrassment to JD.com, and don’t seem fitting for an e-commerce giant that generated nearly $5 billion in revenue in its latest reporting quarter and has a market value of $34 billion. Read Full Post…
Cantonese cuisine has become a local favorite in Shanghai these past few years, reflecting the city’s growing taste for both regional and international foods. An interesting twist on that trend has seen China’s financial capital snub higher-end Cantonese food for more down-market chacanting-style restaurants, which are Hong Kong’s equivalent of the local greasy spoon diners in the west. But these Canto diners that have rapidly colonized Shanghai hardly look like their Hong Kong cousins, and have taken on a decidedly mid- to even high-end approach to the dining experience. Read Full Post…
The volume continues to grow in a war of words between China and the west over a series of antitrust probes against multinationals, including the latest reports that Beijing is targeting Japanese car giant Toyota (Tokyo: 7203) with yet another such investigation. Toyota’s Lexus division is just the latest company to fall under Beijing’s microscope for its pricing policies, following similar investigations into most of the world’s top luxury car makers. Leading US smartphone chip maker Qualcomm (Nasdaq: QCOMO) is also being investigated, and so is leading global software maker Microsoft (Nasdaq: MSFT). Read Full Post…
If telecoms equipment giant Huawei was trying to convince the world it’s not closely linked to Beijing, then its new campaign to root out internal corruption certainly looks like a bad strategic move. Of course I’m being just slightly facetious, as any good corporation should always be vigilant against corruption within its workforce. But in terms of public perception, this new internal anti-corruption campaign seems strikingly similar to the much larger and high-profile campaign being waged throughout China by the 2-year-old administration of President Xi Jinping. Read Full Post…
Volume grows in foreign complaints over antitrust probes
The volume continues to get louder in the growing chorus of multinationals complaining they are being unfairly targeted in a recent wave of antitrust probes by Beijing, prompting China to reply that domestic companies are also being targeted. The latest headlines have the American Chamber of Commerce in China finally breaking its silence on the matter, joining its European counterpart in voicing its concerns that western firms are being singled out for probes over anti-competitive behavior. Meantime, China has held a couple of high-profile media events to defend its approach, and now is turning up its campaign with new reports of domestic firms that are also being punished for anti-competitive behavior. Read Full Post…
Officials at the 2 main regulators probing foreign firms for anti-competitive behavior are turning up their public relations machine to defend their actions, even as they also turn up the pressure on Microsoft (Nasdaq: MSFT) in one of the highest profile investigations. I remarked last week how unusual it was when the secretive State Administration for Industry and Commerce (SAIC) held a rare press conference to defend a series of probes that have targeted Microsoft, along with global smartphone chip giant Qualcomm (Nasdaq: QCOM) and many major auto makers. (previous post) Now the equally secretive National Development and Reform Commission (NDRC), the other antitrust regulator, is launching its own initiative by granting an unprecedented newspaper interview to discuss the matter. Read Full Post…
A widening web of anti-trust investigations has snared one of China’s biggest overseas investors, with word that General Motors (NYSE: GM) has become the latest foreign company to be probed for monopolistic practices. News of this particular investigation shows that no one is exempt from such probes, since GM is one of China’s oldest and largest foreign investors in the automobile sector and is quite chummy with longtime partner SAIC (600104), one of Shanghai’s largest companies. Thus by potentially punishing GM, China’s anti-monopoly regulator would also be punishing a leading Shanghai company, hurting its profits and potentially slowing its growth and future investment from GM. Read Full Post…
