The following press releases and media reports about Chinese companies were carried on September 16. To view a full article or story, click on the link next to the headline.
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Carmakers Curb China Output as Sales Growth Stalls (English article)
Tencent (HKEx: 700) to Invest 2 Bln Yuan in Cloud Unit Over Next 12 Months (English article)
Meituan Denies Rumors of Failure for Latest Funding Round (Chinese article)
The following press releases and media reports about Chinese companies were carried on September 12-14. To view a full article or story, click on the link next to the headline.
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China to Issue Online Car Hire Service Regulations – Source (English article)
Meituan in Urgent Need of Funds as Online Take-Out Dining Wars Continue (Chinese article)
Boeing (NYSE: BA) Plans to Finish Some 737 Jetliners in China: Report (English article)
Trina (NSYE: TSL) Plans IPO of `Growthco’ to Manage Solar Farm Developments (English article)
Bottom line: Dell’s massive new China commitment could foreshadow a major new tie-up that could see it sell a big stake of itself to a local partner, while Lenovo could be eyeing a major shift to OEM production for its floundering smartphone unit.
Dell bets big on China
Two of the world’s top PC makers are in the China headlines today, with homegrown leader Lenovo (HKEx: 992) and US giant Dell both making major strategic moves. But in a sign of the times, neither item is related to either companies’ core PC business, showing just how quickly personal computers are losing their relevance in the fast-changing gadget world.
Dell’s announcement contains the biggest headline figure, with the company announcing a new commitment to spend a whopping $125 billion in China over the next 5 years. But the Lenovo news is equally intriguing if it’s true, and hints the company could be preparing a major shift for its floundering move into smartphones. That shift would see Lenovo’s smartphone unit build up its business of taking manufacturing orders from third-party brands, a model known contract manufacturing or OEM production. Read Full Post…
The following press releases and media reports about Chinese companies were carried on September 11. To view a full article or story, click on the link next to the headline.
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Dell Says to Invest $125 Bln in China Over 5 Years (English article)
Lenovo (HKEx: 992) Starts OEM Smartphone Production for Other Brands – Report (Chinese article)
Mindray (NYSE: MR) Receives Revised Proposal to Acquire Company at $27 Per ADS (PRNewswire)
Didi Kuaidi Said to Join Alibaba, Tencent in Lyft Funding Deal (English article)
Tencent (HKEx: 700) WeBank Chief Cao Tong Resigns (Chinese article)
Bottom line: Alibaba’s latest sell-off is part of an ongoing correction in the company’s value, reflecting a new era of more realistic expectations from investors.
Bloom continues to shrivel from Alibaba’s rose
After years of basking in the hype of adoring investors who briefly valued it even higher than much-older and far more global rival Amazon (Nasdaq: AMZN), Chinese e-commcerce leader Alibaba (NYSE: BABA) has entered a new phase centered on more realistic expectations for the company. That new phase has seen Alibaba’s stock tumble to a more realistic level this year on a steady series of bad news, including the latest reports that one of its key sales metrics wasn’t as strong as previously estimated last quarter.
But that wasn’t the only bad news for Alibaba in the last few days. Earlier reports this week said the company was cutting back in its college recruitment, in what looked like another sign of slowing growth. (previous post) An Alibaba official seemed to refute those initial reports, only to have a second series of reports emerge that seemed to confirm that the recruitment slowdown was indeed happening. (English article) Read Full Post…
The following press releases and media reports about Chinese companies were carried on September 9. To view a full article or story, click on the link next to the headline.
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Bottom line: Focus Media’s latest backdoor listing plan could stand a 50-50 chance of success, and should come as a warning of the difficulties that may face many other US-listed Chinese firms hoping to privatize and re-list in China.
Focus Media in new backdoor listing plan
You have to admire the persistence of Focus Media, the outdoor advertising specialist that’s trying to blaze a new homecoming trail for US-listed Chinese firms trying to privatize and re-list in China to get higher valuations. More than 2 years after leaving the Nasdaq and one failed re-listing attempt in Shenzhen, Focus is trying again with a new plan for a backdoor listing via a Shenzhen-listed shell company called Hedy Holdings (Shenzhen: 002027).
I’m actually being just slightly facetious in admiring Focus for its persistence, since it really has very few other options in this case. Big investors including US private equity giant Carlyle put up billions of dollars to help Focus de-list in 2013, and now they’re simply looking to recoup their investments and hopefully make some profits by re-listing the company at a higher valuation in China. Read Full Post…
The following press releases and media reports about Chinese companies were carried on September 1. To view a full article or story, click on the link next to the headline.
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Micron (Nasdaq: MU) Deal in Suspense as Unigroup Exec Returns Home (Chinese article)
Focus Media Aims to Relist Via Hedy (Shenzhen: 002027) Acquisition (English article)
Internet Entrepreneurs Back Chinese Tesla (Nasdaq: TSLA) Rival NextEV (English article)
Front-Line Research Shows Many Buyers Returning Xiaomi’s Redmi Note (Chinese article)
Ageas to Sell Hong Kong Unit to China’s JD Capital for $1.4 Bln (English article)
Bottom line: Muted interest in Great Wall Motor’s fund-raising plan and Bank of China’s sale of a major asset reflect weakening investor interest in such deals due to the slowing Chinese economy.
Weak sentiment pressures, BOC, Great Wall Motor deals
Funding for Chinese Internet companies is showing no signs of slowing just yet, but reports of weak demand for 2 other deals reflects fading investor interest in more traditional sectors as China’s economy slows. The first of those has car maker Great Wall Motor (HKEx: 2333; Shanghai: 601633) sharply reducing plans for a new issue of A-shares on China’s domestic stock markets. The second has Bank of China (HKEx: 3988; Shanghai: 601398) attracting scant interest for the sale of a major asset in Hong Kong.
Neither of these developments comes as a huge surprise due to growing worries over China’s rapidly slowing economy. Great Wall was never one of China’s top auto makers to start with, and the big reduction in its 16.8 billion yuan ($2.6 billion) fund-raising plan comes as the domestic auto market slows and investors pile out of China’s crumbling stock markets. Meantime, Bank of China has been trying to sell its Hong Kong-based Nanyang Commercial Bank for a while now, and the latest reports say only 1 interested party has emerged. Read Full Post…
The following press releases and media reports about Chinese companies were carried on August 28. To view a full article or story, click on the link next to the headline.
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Chinese Banking Giants: Zero Profit Growth as Bad Loans Pile Up (English article)
Motorola to Lead Lenovo (HKEx: 992) Mobile Unit in New Overhaul (Chinese article)
Cinda (HKEx: 1359) Only Bidder for BOC (HKEx: 3988) Bank Unit with $8.8 Bln Price (English article)
Dalian Wanda Buys Ironman Triathlon Owner for $650 Mln (English article)
Uber China Unit Wins $1 Bln in New Funding – Source (Chinese article)
Bottom line: Upbeat reports from leading pork producer Smithfield and aircraft giant Boeing show that consumer-focused companies should continue to thrive despite China’s slowing economy, while policy-driven state-run firms could suffer more.
Boeing ups China aircraft outlook
A couple of upbeat new reports from aircraft giant Boeing (NYSE: BA) and leading global pork producer Smithfield are providing an interesting contrast to broader forecasts of gloom and doom for China’s slowing economy. In the first instance, Boeing has upgraded its 20 year forecast for aircraft demand in China, while the second has Smithfield has saying its exports to China rose 45 percent in the first half of this year.
Each of these stories is slightly different, but both point to a growing divide in the Chinese economy that has big implications for the nation’s major industries. On one side of the aisle are companies like Boeing and Smithfield, which make products and services directly tied to consumer demand. Such products and services are part of the so-called “real economy” and are things that the market really wants. These should be able to continue thriving even if China’s economy slows. Read Full Post…
