Bottom line: CICC and Jiuxian are benefiting from a growing number of domestic listing options for private Chinese companies, but both will still need to show they can be profitable industry leaders for investors to take them seriously.
Jiuxian finally debuts on China OTC
A couple of new IPOs are highlighting the growing allure of China’s increasingly diverse stock markets for domestic companies that used to flock to New York. Leading the headlines is a very respectable performance in the long-awaited Hong Kong trading debut for CICC (HKEx: 3908), China’s oldest investment bank. The strong debut came even after CICC had to scale back the offering due to weak demand, and market watchers are attributing the performance to separate news that China will resume domestic IPOs by year-end after a pause of several months.
In the other headline, online wine seller Jiuxian has become the latest Chinese Internet firm to list on the country’s 2-year-old over the counter (OTC) market. The loss-making Jiuxian had initially aimed to list in New York, but abandoned that plan for a simpler offering at home. It joined other money-losing startups making similar listings over the last week, including online classified ad site Baixing and Alibaba-backed (NYSE: BABA) soccer club Evergrande Taobao. (previous post) Read Full Post…
The following press releases and media reports about Chinese companies were carried on November 10. To view a full article or story, click on the link next to the headline.
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China’s Oldest Investment Bank CICC (HKEx: 3908) Jumps in HK Trading Debut (English article)
Online Wine Seller Jiuxian Lists on China OTC, Eyes Main Board Next Year (Chinese article)
Alibaba (NYSE: BABA) ‘On the Move’ to Buy Stake in SCMP (HKEx: 583) – Market Talk (English article)
Shenzhen Probes Meituan, Ele.me for Using Unauthorized Restaurants (Chinese article)
Bottom line: China’s commerce regulator is putting growing pressure on Alibaba to play by its rules governing piracy and fair competition, but is likely to keep dialogue private to avoid public spats like one early this year.
SAIC accepts JD’s Alibaba complaint
E-commerce juggernaut Alibaba (NYSE: BABA) is coming uncomfortably under the microscope just days before its important Singles Day shopping extravaganza, with 2 new developments reflecting growing scrutiny from the nation’s top commerce regulator. The first has the powerful State Administration for Industry and Commerce (SAIC) formally accepting a complaint from rival JD.com (Nasdaq: JD), which accuses Alibaba of strong-arm tactics aimed at stifling competition during Singles Day promotions set for November 11.
The second headline looks a bit more benign, and simply says that SAIC Minister Zhang Mao visited Alibaba’s headquarters in the city of Hangzhou in coastal Zhejiang province this week. Headlines from that meeting look designed to show a facade of harmony, with Zhang praising Alibaba for its innovation in e-commerce. But I do suspect that Zhang is strongly pushing Alibaba behind the scenes to clean up its sites of traffic in pirated and substandard products, and also to avoid abusing its market dominance that led to the JD.com complaint. Read Full Post…
The following press releases and media reports about Chinese companies were carried on November 4. To view a full article or story, click on the link next to the headline.
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JD.com (Nasdaq: JD) Says Alibaba Pressuring Merchants Before Singles’ Day (English article)
Over 40 Pct of China’s Online Sales Counterfeit, Shoddy: Xinhua (English article)
The following press releases and media reports about Chinese companies were carried on November 3. To view a full article or story, click on the link next to the headline.
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Tencent (HKEx: 700) Plans $1 Bln Investment in New Meituan-Dianping (English article)
HSBC (HKEx: 5) Targets Chinese Bond Market with Securities JV (English article)
Gaming Firm Giant Interactive to Backdoor List Through New Century Cruise (English article)
Ming Yang (NYSE: MY) Announces Receipt of “Going Private” Proposal (PRNewswire)
Baixing.com Submits Filings, Aims for Year-End IPO on China’s OTC Board (Chinese article)
The following press releases and media reports about Chinese companies were carried on October 31-November 2. To view a full article or story, click on the link next to the headline.
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Jin Jiang (HKEx: 2006) Prepares to Raise 4.5 Bln Yuan to Improve Capital Structure (Chinese article)
Tsinghua Unigroup to Take 25 Pct in Taiwan’s Powertech (Taipei: 6239) for $600 Mln (English article)
VMWare (NYSE: VMW), Sugon (Shanghai: 603019) Form China JV (Chinese article)
Bright Food Said to Prepare IPO of $1 Bln Manassen Foods Distribution Arm (English article)
LeTV (Shenzhen: 300104) CEO Sells 100 Mln Shares, Lends Proceeds to Company (Chinese article)
Bottom line: A Shandong company’s purchase of nearly half of an Australian beef producer is the latest in a string of offshore meat acquisitions by Chinese firms, many of which could ultimately fail due to cultural differences.
Delisi buys 45 pct of Australian beef firm
Foreign meat companies have become the flavor of the day for acquisitive Chinese buyers, with word that a company called Delisi has just purchased 45 percent of Australian beef company Bindaree. The deal would come just weeks after leading Shanghai food group Bright Food paid a similar price for half of a New Zealand meat company, and a couple of years after the blockbuster purchase of leading US pork products maker Smithfield by WH Group (HKEx: 288).
Media are saying that a recent free trade agreement (FTA) between Australia and China may have helped to facilitate this latest deal between Delisi and Bindaree, and perhaps that’s partly true. But the reality is that China’s fast-growing economy is fueling a strong domestic appetite for meat. China’s own inefficient production also often means that locally produced meat is lower quality and more expensive than comparable products made overseas, which explains why these new offshore tie-ups are quite attractive. Read Full Post…
Bottom line: A Chinese buyer could have a strong chance of winning the bidding for US hotel operator Starwood, with CIC most likely to emerge as Beijing’s preferred candidate among a trio of interested local buyers.
Chinese buyers eye Starwood Hotels
Just a day after China’s 2 leading travel sites put aside their bitter rivalry and formed a major new alliance, we’re getting word of yet another major deal in the hot tourism sector. This time media are saying 3 Chinese buyers are eyeing Starwood (NYSE: HOT), one of the world’s top hotel operators. The 3 potential bidders include 2 of China’s leading private equity investors, China Investment Corp (CIC) and HNA Group. The third is one of China’s top hotel operators, Jin Jiang (HKEx: 2006; Shanghai: 600574), which has been on a buying spree recently both at home and abroad.
If one of the 3 succeeds, the deal would mark the largest purchase ever of an offshore asset by a Chinese buyer, based on Starwood’s latest market value of $15 billion. Word of the deal comes just a day after leading domestic online travel agents Ctrip (Nasdaq: CTRP) and Qunar (Nasdaq: QUNR) buried the hatchet in their bloody battle for share in China’s fast-growing travel market. A Starwood deal would also come less than a week after US-British cruise operator Carnival (NYSE: CCL) formed a new joint venture with 2 Chinese partners. (Chinese article) Read Full Post…
The following press releases and media reports about Chinese companies were carried on October 28. To view a full article or story, click on the link next to the headline.
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Alibaba (NYSE: BABA) Announces September Quarter 2015 Results (Businesswire)
3 Chinese Suitors Show Interest in Starwood Hotels (NYSE: HOT): Source (English article)
Apple (Nasdaq: AAPL) Beats Wall Street, Investors Wary of China Sales
Bottom line: Tesla’s newly announced modest China sales and announcement of a plan for potential local production reflect the uphill road it faces in the Chinese market, which is unlikely to get much easier in the next 2 years.
Tesla still searching for China sales charge
China is fast becoming the land of promising upstart companies that failed to reach their potential, with word that former new energy superstar Tesla (Nasdaq: TSLA) has posted very ho-hum car sales in a market where it once held out big hopes. The rare China sales figures come as Tesla discussed possible plans to localize some of its manufacturing in the world’s largest auto market, a move that charismatic founder Elon Musk says could cut the cost of cars by up to a third.
The latest Tesla news came from a local media event in China that didn’t go off too smoothly, and apparently wasn’t meant to be reported by foreign media. The event’s lower-key nature and other glitches were unusual for Tesla, which was traditionally a master at slickly orchestrated events and appearances by Musk that gave the company hugely positive publicity when it first drove into China last year. Read Full Post…
Bottom line: New signals that China’s 3 telcos are reducing their spending could presage a rumored consolidation of the trio into 2, with China Telecom and Unicom the most likely to be merged.
China telcos rope in spending
The latest sign of a potential shake-up in China’s stodgy telecoms sector came late last week, when global networking equipment giant Ericsson (Nasdaq: ERIC) attributed reorganization and weak spending by the nation’s big 3 carriers as a major factor behind its disappointing quarterly results. Despite expectation that China’s big 3 carriers would spend heavily on 4G this year, actual amounts so far have been relatively modest from the trio of China Mobile (HKEx: 941; NYSE: CHL), China Unicom (HKEx: 762; NYSE: CHU) and China Telecom (HKEx: 728; NYSE: CHA).
The unexpected spending slowdown could be the latest sign that Beijing is planning an industry overhaul, following reports that first emerged last month of a possible consolidation of the 3 current mobile carriers into just 2. Such a move would reflect Beijing’s disappointment at the failure of China’s state-run carriers to become global innovators over the last decade, even after receiving monopoly rights over a market that has become the world’s largest for mobile and broadband services. Read Full Post…
