Bottom line: Apple’s retention of China’s smartphone crown for a second consecutive quarter is partly due to timing, but also owes to CEO Tim Cook’s new PR campaign that will help to win favor from Beijing and the broader Chinese public.
Apple’s Cook opens Weibo account
Media are fixated today on a new report showing China’s smartphone sales fell for the first time in this year’s first quarter, in a development that shouldn’t surprise anyone due to the market’s supersaturation. But equally impressive in the report is the ongoing surge of Apple (Nasdaq: AAPL), which managed to hold onto its title as the nation’s leading smartphone brand for a second quarter after stealing the crown from the high-flying Xiaomi.
Some may say Apple’s surge is due to timing, since it released its latest iPhones in October, fueling a fourth-quarter sales boom that lingered into the first quarter. That may be partly true, though I personally have to applaud CEO Tim Cook for mounting a very focused campaign to woo both Beijing and average Chinese consumers. In the latest move of that campaign, Cook has just opened his official account on Sina Weibo (Nasdaq: WB), China’s equivalent of Twitter (NYSE: TWTR), as he moves to communicate more directly with customers in one of his most important markets. Read Full Post…
The following press releases and media reports about Chinese companies were carried on May 8. To view a full article or story, click on the link next to the headline.
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Alibaba (NYSE: BABA) Names New CEO As Revenue Tops Views (English article)
58.com (NYSE: WUBA) To Acquire Online Recruitment Site ChinaHR – Report (English article)
Canadian Solar (Nasdaq: CSIQ) Signs $250 Mln Loan With Minsheng Bank (PRNewswire)
Chinese Authorities Visit Uber’s Chengdu Office (English article)
Chinese Real Estate Site Aiwujiwu Closes $120 Mln Series D Funding (English article)
Bottom line: A potential future spin-off of Yum’s China operations looks like a good move that would give the new company more focus, while McDonald’s China franchising drive also looks good if it can find the right partners.
Investors eye spin-off for Yum’s China unit
China was once the hot story for fast food companies like KFC and McDonald’s (NYSE: MCD), as Chinese consumers flocked to the concept of reasonably priced food that was served quickly in attractive restaurants with friendly workers. But that story has become quite stale in recent years, leading this pair of global heavyweights to look for new China stories to pump up their local business and excite investors.
KFC has been trying to achieve that goal through a major overhaul of its China restaurants over the past year, and now is back in the headlines as some investors call for its parent, Yum Brands (NYSE: YUM), to split off its China operations into a separate company. Meantime, McDonald’s is trying to bring some excitement back to its China story by rapidly accelerating the expansion of its traditional franchised store model in the market. Read Full Post…
The following press releases and media reports about Chinese companies were carried on May 7. To view a full article or story, click on the link next to the headline.
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Third Point’s Loeb Not Pushing For Yum (NYSE: YUM) To Split Off China Business (English article)
Qihoo (NYSE: QIHU), Coolpad Unveil QiKU As Brand For Smartphone JV (Chinese article)
Mobile Ridesharing App Dida Pinche Wins $100 Mln Series C Funding (English article)
Trina (NYSE: TSL) Building $160 Mln Manufacturing Facility In Thailand (English article)
Bottom line: Tsinghua Unigroup is likely to win the bidding for a controlling stake in HP’s China-based networking equipment unit, and could help HP consolidate its place as one of China’s leading IT service providers.
Bidding war breaks out for HP asset sale
Hewlett-Packard (NYSE: HPQ) is finding itself in a rare position of power in China, with word that an unusual bidding war has broken out as it looks for a partner to buy a controlling stake in its locally-based networking equipment unit. The development could bring not only a windfall in terms of money HP will get for its H3C Technologies unit, but will also allow it to choose between 2 potent partners to help consolidate its place as one of China’s leading IT services providers.
HP is in the process of splitting itself into 2 as part of a broader restructuring announced last fall. In this case the China-based H3C networking equipment venture would almost certainly go into its new HP Enterprise unit, focused on products and services for corporate customers. The other main unit under the break-up will include HP’s older PC and printer businesses, which will go by the name HP Inc. Read Full Post…
Bottom line: Baidu could be entering a period of profit erosion that will put pressure on its stock, while Tencent’s latest investment hints it could be preparing to roll out a global gaming platform by the end of this year.
Baidu profit drops
China’s Internet “Big 3” of Baidu (Nasdaq: BIDU), Alibaba (NYSE: BABA) and Tencent (HKEx: 700) are often in the news on any given week, but we’re seeing a rare instance where all 3 are in the headlines on this final work day before the May 1 break. Baidu is leading off the BAT headlines with the release of its latest quarterly earnings that are led by a rare profit decline due to soaring expenses.
Rising costs may have also been a factor in the Alibaba news, which has the company freezing its global headcount for the rest of the year as it tries to rationalize itself after a period a breakneck growth. Last but not least is Tencent, whose relatively large purchase of a stake in a US gaming firm hints at the direction it will take in its overseas expansion. Read Full Post…
The following press releases and media reports about Chinese companies were carried on April 30. To view a full article or story, click on the link next to the headline.
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Bottom line: The new Nokia-Alcatel merger, combined with a continued low-key lobbying campaign by Huawei could ultimately convince Washington to ease its ban on Chinese telecoms equipment within the next year.
US to rethink Huawei ban?
A couple of new reports are casting a spotlight on the troubled relationship between Washington and leading Chinese telecoms equipment maker Huawei, and raising the intriguing potential for a much-needed compromise that might end the impasse between the pair. The impasse is really quite one-sided, with Washington banning the sale of all Chinese telecoms equipment in the US due to concerns about the potential for spying. But this kind of policy seems a bit broad, especially amid an accelerating sector consolidation that is leaving wireless carriers with fewer and fewer networking equipment suppliers to choose from. Read Full Post…
The following press releases and media reports about Chinese companies were carried on April 28. To view a full article or story, click on the link next to the headline.
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iPhone Sales, China Boosts Apple (Nasdaq: AAPL); Shares Up Modestly (English article)
Lenovo (HKEx: 992) Eyes 100 Mln Cellphone Sales In New Fiscal Year – CEO (Chinese article)
Huawei CEO Says Chinese Cybersecurity Rules Could Backfire (English article)
Trina (NYSE: TSL) Signs Agreement In Hefei Zone for 300 MW DG Solar Power Plant (PRNewswire)
Bottom line: Xiaomi’s release of a new model and addition of a high-profile investor in India reflect the market’s key role in its global expansion this year, with a likely target of 4 million or more unit sales.
Xiaomi in new India launch
Smartphone sensation Xiaomi is working hard to repair its position in India, following a setback late last year that saw some of its higher end products locked out of the market over a patent dispute. Now the company is making a big new push at the lower end of the market, choosing India for its first product launch outside of China. At the same time, the company announced it has sold a stake in itself to one of India’s best known tech tycoons, a patriarch at the renowned Tata Group conglomerate.
Both of these news bits come from an event late last week in India, and underscore the growing importance that Xiaomi is placing on the market this year to keep its meteoric growth alive. Xiaomi is banking heavily on global markets to fuel its growth story, now that it is already king of the smartphone hill in its home China market. Read Full Post…
Bottom line: The refusal of many banks to follow a Beijing directive to support the sagging property market looks encouraging, and could show these state-run lenders are finally beginning to behave more commercially.
Banks break with policy-lending past
It appears I owe an apology to big Chinese state-run banks, after years of calling them policy lackeys of Beijing with very little commercial instinct. Just a day after criticizing top lender ICBC (HKEx: 1398; Shanghai: 601398) for making a blatantly political $4.3 billion infrastructure loan to Pakistan (previous post), a new report is saying a growing number of banks are defying a recent Beijing order to boost their mortgage lending to support the sagging domestic real estate market.
This kind of action certainly won’t please economic planners in Beijing, but it marks a huge step forward for the banks in their drive to become more commercial and earn some real respect from investors. Read Full Post…
