Bottom line: BYD’s latest fund raising will test investor patience as its EV business struggles, while Warburg Pincus will continue to cash out of Car Inc to take advantage of its soaring stock.
Warburg sells down Car Inc stake
A couple of cash-raising stores are in the headlines for 2 car-related companies, led by the news that Warren Buffett-backed new energy car maker BYD (HKEx: 1211; Shenzhen: 002594) is planning a new share sale as it gets weighed down by a big debt and slow sales for its electric vehicles (EVs). Meantime, Warburg Pincus is selling down its stake in car rental specialist Car Inc (HKEx: 0699), following the end of a lock-up period after its IPO last year.
The BYD saga is easily the more interesting of the 2 stories, showing the company’s dreams for making big profits from the emerging market for EVs are moving ahead far more slowly than it had originally hoped. That reality has forced BYD to look to various measures to raise billions of dollars in cash over the last year to keep its operations going. In the process, Warren Buffett’s stake has slowly crept down from an original 10 percent to a current 9 percent. Everyone is watching closely to see if the billionaire investor may ultimately dump his stake completely. Read Full Post…
The following press releases and media reports about Chinese companies were carried on May 28. To view a full article or story, click on the link next to the headline.
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Buffett-Backed Automaker BYD (HKEx: 1211) Plans Up To $1.9 Bln Placement (English article)
Blocked in China, Twitter (NYSE: TWTR) Still Courts Chinese Firms For Ads (English article)
Sina Weibo (Nasdaq: WB) to Invest $142 Mln in Taxi App Didi Kuaidi (English article)
Gucci China Discounts Prompt Lines as Bagmaker Clears Stock (English article)
Chinese Airline Juneyao IPO Surges by Limit 44 Pct on Shanghai Debut (English article)
The following press releases and media reports about Chinese companies were carried on May 23-25. To view a full article or story, click on the link next to the headline.
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Expedia (Nasdaq: EXPE) Announces Sale Of eLong (Nasdaq: LONG) Stake (PRNewswire)
Bottom line: HP’s choice of a Beijing-based group with strong ties to a top science university as its China IT services partner looks like a smart move, which will help ease potential for conflict over national security concerns by Beijing.
HP choses Unigroup as China IT partner
Hewlett-Packard (NYSE: HPQ) has chosen a relatively dynamic, Beijing-based tech company as its future China partner over a stodgier state-run firm in Shanghai, as the US computer giant prepares to split itself into 2. The development is seeing HP get a bit less money than it had hoped for the 51 percent stake of its China-based H3C unit, which makes equipment for use in small telecoms networks. But the choice of Tsinghua Unigroup as the buyer looks quite prudent, and will bring in a new politically connected partner for HP as it prepares to split off its core PC unit from its more dynamic business that sells computing and networking services to enterprises. Read Full Post…
Bottom line: LeTV’s strong smartphone launch shows that stiff competition in China won’t ease soon, which could push Lenovo’s mobile operations further into the red and prompt ZTE to further lighten its efforts in the market.
LeTV smartphones make strong debut
A series of smartphone items are in the headlines as we close out the week, spotlighting the tough situation in a China market that is at once the world’s largest but also extremely competitive. That competition just got a bit louder, with the first headline that says new arrival LeTV (Shenzhen: 300104) debuted quite strongly with when its first smartphone models went on sale this week. Meantime, industry stalwarts Lenovo (HKEx: 992) and ZTE (HKEx: 763; Shenzhen: 000063) continue to reflect the stresses of selling in China, with the former posting a big loss for its mobile business last year while the latter continues to lighten its reliance on the market by looking for growth in the US. Read Full Post…
The following press releases and media reports about Chinese companies were carried on May 22. To view a full article or story, click on the link next to the headline.
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Tsinghua Unigroup To Buy 51 Pct of HP’s (NYSE: HPQ) H3C For $2.5 Bln or More (Chinese article)
Bank Of China (HKEx: 3988) Weighs Overhaul For BOCHK (HKEx: 2388) Unit (HKEx announcement)
Lenovo (HKEx: 992) Reports Results For Quarter Ended March 31 (HKEx announcement)
Bottom line: China’s largest corporations need to face stiffer regulatory penalties to ensure their compliance with Beijing rules, as part of a campaign to clean up the country’s business climate.
More strictness needed in Alibaba, telco cases
Some of China’s leading high-tech firms were in the headlines last week for foot-dragging in response to government calls to change their business practices, in separate cases that show why Beijing needs to get more aggressive about enforcing its rules among big domestic corporations.
The first case saw e-commerce giant Alibaba (NYSE: BABA) sued by one of the world’s top makers of luxury goods for allegedly refusing to clean up its popular sites of trafficking in pirated goods. The second saw critics accuse China’s 3 major mobile carriers of taking largely empty steps to improve their mobile data pricing and speeds, after Beijing called on them to take such action. Read Full Post…
The following press releases and media reports about Chinese companies were carried on May 20. To view a full article or story, click on the link next to the headline.
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Uber Joins Baidu (Nasdaq: BIDU) As Nokia’s Maps Unit Draws Multiple Bidders (English article)
Bank of Communications (HKEx: 3328) Agrees To Buy 80 Pct Of Brazil’s BBM (English article)
China’s Unigroup Says Wins Bid To Buy 51 Pct Stake In HP (NYSE: HP) Unit (English article)
The following press releases and media reports about Chinese companies were carried on May 16-18. To view a full article or story, click on the link next to the headline.
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Alibaba (NYSE: BABA) Sued In US By Luxury Brands Over Counterfeit Goods (English article)
Netflix (Nasdaq: NFLX) Tops $600 A Share, Said In Talks To Enter China (English article)
iQiyi Denies Rumors of Merger With Youku Tudou (NYSE: YOKU) (English article)
Chinese Mobile Users In Dark Over Cut-Price Data Deals (English article)
Yum (NYSE: YUM) China Spinoff Becoming More Probable: JPMorgan (English article)
The following press releases and media reports about Chinese companies were carried on May 14. To view a full article or story, click on the link next to the headline.
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Chinese Vice Premier Meets Apple (Nasdaq: AAPL) CEO (English article)
Bottom line: Recent raids on Uber’s offices in 2 major Chinese cities reflect resistance it is meeting from traditional taxi operators, which could significantly limit its growth potential in the politically sensitive market.
Uber’s offices raided in Chengdu, Guangzhou
The turmoil in China’s overheated market for paid car services has cruised into the offices of global fast-riser Uber, which has been raided twice in the last 2 weeks over its aggressive move into the market. The first raid came last week, when local officials visited the company’s offices in the southern metropolis of Guangzhou, sometimes also called Canton. (Chinese article) Now the raids have extended to the interior city of Chengdu, where Uber’s offices have again been visited by local officials conducting an unspecified investigation. (English article) Read Full Post…
