The following press releases and media reports about Chinese companies were carried on April 23. To view a full article or story, click on the link next to the headline.
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Visa (NYSE: V), MasterCard (NYSE: MA) Surge On China Move To End Card Monopoly (English article)
Chinese Banks Disobey Order To Support Housing Market (English article)
Bottom line: ICBC’s $4.3 billion lending program for Pakistani power projects is being driven by Beijing policy directives, while Bank of China’s US expansion is a commercially driven move to tap Chinese demand for US real estate.
ICBC in Pakistani power projects
New stories involving 2 of China’s “Big 4” lenders are casting a spotlight on the love-hate relationship that many investors have with these mammoth banks that sometimes act commercially but more often make decisions based on directives from Beijing. The larger item has ICBC (HKEx: 1398; Shanghai: 601398), China’s biggest bank, committing to a massive new $4.3 billion lending program to help develop Pakistan’s energy sector. The other has Bank of China (HKEx: 3988; Shanghai: 601398) planning a modest expansion in the US, as it looks to tap a growing appetite for American real estate by Chinese investors. Read Full Post…
The following press releases and media reports about Chinese companies were carried on April 22. To view a full article or story, click on the link next to the headline.
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Yum (NYSE: YUM) CEO Says China Business Mending, Sees Strong Year-End (English article)
ICBC (HKEx: 1398) To Provide $4.3 Bln In Financing For Pakistan Power Projects (English article)
Forbes Releases Wealthiest Chinese List, Internet “Big 3” BAT Chiefs In Top 10 (Chinese article)
Bottom line: Government officials are being forced to deal carefully with newly minted Internet giants like Alibaba, which sometimes commit transgressions due to their youth but also provide huge contributions to China’s economy.
Alibaba a double-edge sword for govt
A trio of stories about Alibaba (NYSE: BABA) nicely summarize both the risks and benefits that China’s Internet juggernauts present for the government, which must walk a fine line between taming these newly minted giants while being careful not to kill such economic powerhouses. In just the space of a decade, Alibaba, alongside Tencent (HKEx: 700) and Baidu (Nasdaq: BIDU), have grown rapidly from venture-funded start-ups to become some of the world’s most valuable companies.
That growth and status has brought not only big prestige to China, but also valuable tax dollars to local governments and high-tech jobs that Beijing wants to replace lower-tech manufacturing labor. But at the same time, such young companies are particularly vulnerable to missteps, which can create chaos in the marketplace and Beijing needs to be careful to control. Read Full Post…
The following press releases and media reports about Chinese companies were carried on April 21. To view a full article or story, click on the link next to the headline.
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Bottom line: Baozun’s IPO should achieve its $200 million fund-raising target and the stock could perform relatively well for the rest of the year if it can show that it will become profitable for all 2015.
Baozun files for $200 mln IPO
The first serious Internet IPO of the year could finally be in the pipeline, with word that e-commerce services provider Baozun has filed for a New York listing that would be a first-of-its-kind for this type of company. Media are calling Baozun an e-commerce firm, but the reality is that the company helps others design and operate e-commerce sites, meaning it doesn’t have to compete itself in the fiercely competitive space.
The company’s largest shareholder is actually e-commerce leader Alibaba (NYSE: BABA), which holds 23 percent of Baozun. That relationship underscores Baozun’s unique market position as a service provider rather than actual website operator, and the company cited third-party data saying it currently controls about 20 percent of its market. The Alibaba relationship also provides important ties with many major retailers that already do business on Alibaba’s hugely popular Tmall. Read Full Post…
Bottom line: Yum’s new upscale Italian restaurant looks like a smart concept for the China market, but a broader campaign to move its Chinese KFC stores upmarket looks like too little too late.
A year after announcing plans for a major overhaul of its aging Chinese KFC stores, Yum Brands (NYSE: YUM) is adding another prong to its China reboot with the launch of an upscale Italian eatery as it tries to to regain relevance in its most profitable market. Yum’s newest China restaurant brand, Atto Primo, is situated in the heart of the Shanghai Bund, home to some of the city’s oldest and most famous buildings and most expensive restaurants. Yum is calling the restaurant a “lab” for now, but I suspect it could quickly expand the concept with new outlets if it proves popular. Read Full Post…
The following press releases and media reports about Chinese companies were carried on April 17. To view a full article or story, click on the link next to the headline.
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SunPower (NYSE: SPWR), Apple (Nasdaq: AAPL) To Build Solar Projects In China (English article)
P2P Lending Site Lufax Completes $485 Mln Fund Raising Round (Chinese article)
China’s Former IPO King CICC Looks for A Fresh Start (English article)
Baidu (Nasdaq: BIDU) Unveils Self-developed DuWear Smartwatch OS (English article)
The following press releases and media reports about Chinese companies were carried on April 10. To view a full article or story, click on the link next to the headline.
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Bottom line: Xiaomi’s diversified sales strategy in India could help reverse recent setbacks, but could ultimately undermine the carefully cultivated cool and trendy image that has been key to its broader success.
Xiaomi adds traditional retailers in India
Smartphone sensation Xiaomi is making a risky move in India, abandoning its trendy online-only sales model as it faces headwinds in a market that has become its first major stepping stone onto the global stage. Xiaomi is calling the decision to sell its phones through traditional retail stores a tactical move, in a nod to the less advanced state of India’s Internet compared its home China market.
While that may be true, this new move also hints at signs of distress as Xiaomi faces new challenges in India on several fronts. One of those centers on an intellectual property dispute with global telecoms titan Ericsson (Stockholm: ERICb), which forced Xiaomi to stop selling its higher-end phones in India last December. The other big challenge is coming from other Chinese smartphone makers like Meizu, which are attempting to copy Xiaomi’s early success in India. Read Full Post…
Bottom line: New moves against e-commerce and online video firms are extensions of a broader crackdown on rogue Internet practices, which will slow short-term growth at some companies but ultimately create a healthier business environment.
E-Commerce in China
Crackdowns widen on video, e-commerce
It seems like I write about the latest Internet crackdown far too often these days, as Beijing focuses on a wide range of industries where it wants to clean up what it sees as unhealthy business practices. Another 2 such crackdowns are in the headlines as we head into spring, one in the scandal-wracked e-commerce space and the other in online video. Both crackdowns actually began earlier, and these latest moves just show the regulators don’t feel that their job is finished yet.
Of course it’s a slight oversimplification to say this broader series of crackdowns is coming from a single source, since the commerce regulator has been the main driver behind the e-commerce crackdown and the broadcasting and publishing regulator is behind the video clean-up. But those 2 concurrent campaigns, along with other similar ones, probably underscore a recent resolve by central leaders in Beijing to clean up a Chinese business landscape that’s often riddled with corrupt and illegal practices. Read Full Post…
