The following press releases and media reports about Chinese companies were carried on March 19. To view a full article or story, click on the link next to the headline.
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Yahoo (Nasdaq: YHOO) To Close Beijing R&D Center (Chinese article)
The following press releases and media reports about Chinese companies were carried on March 17. To view a full article or story, click on the link next to the headline.
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Hunan TV’s Online Video Platform Mango TV Lands 1 Bln Yuan Series A – Source (English article)
Tencent (HKEx: 700), Shanda Literature Units Join To Form Online Reading Group (Chinese article)
NZ’s Fonterra Buys Stake In China’s Beingmate (Shenzhen: 002570) For $553 Mln (English article)
Legend Group Plans July IPO, To Raise Up To $3 Bln – Report (Chinese article)
Consortium to Acquire Shanda Games (Nasdaq: GAME) Adds New Members (PRNewswire)
Bottom line: Orient Securities IPO should price and debut strongly on strong sentiment towards brokerages, which should perform well over the short- to medium-term if China’s broader economy continues to slow.
Orient Securities IPO draws strong interest
Despite new uncertainties about their future, Chinese brokerages continue to remain a hot ticket as investors bet they’ll benefit from a booming domestic stock market and new business from a pilot program allowing more foreigners to buy Chinese stocks. That’s my assessment following word that the biggest domestic IPO since 2011, from Orient Securities, has been massively oversubscribed by a factor of more than 90. Put another way, some $150 billion worth of investor money is chasing the $1.6 billion offering, meaning barely 1 in 10 investors will be able to get any shares. Read Full Post…
The following press releases and media reports about Chinese companies were carried on March 14-16. To view a full article or story, click on the link next to the headline.
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Citi-Linked China Broker’s IPO 90 Times Oversubscribed In $150 Bln Investor Rush (English article)
Alibaba (NYSE: BABA) Says UCWeb Chief Yu Yongfu To Head AutoNavi Unit (Chinese article)
Solar Panel Makers Setting Up Offshore Plants To Avoid US Anti-Dumping Tariffs (Chinese article)
Home Decoration Site To8to Completes $200 Mln Series C Funding (English article)
Bottom line: Alibaba’s 2 latest big investments in Snapchat and Snapdeal look like good bets for strong financial returns, but are unlikely to produce any major strategic benefit.
Alibaba in talks for Snapdeal stake
I was a bit confused on my first reading of the headlines today, after seeing articles saying e-commerce leader Alibaba (NYSE: BABA) was in talks to invest in 2 companies whose “snappy” names sounded quite similar. But a closer reading made it clear that these were 2 very different deals, one involving the popular US social networking service (SNS) Snapchat, and the other involving a popular Indian e-commerce site called Snapdeal.
Despite their big geographic and product differences, these 2 deals seem to represent a growing trend for Alibaba, which is no longer acquiring companies but instead only buying small strategic stakes. The strategy looks mostly advantageous to the investment targets. That’s because it’s helping to push up the valuations of names like Snapchat and Snapdeal to frothy levels, much the way Alibaba used similar investments to pump up its own valuation in the run-up to its IPO last year. Read Full Post…
Bottom line: China job cuts at GSK and Tesla reflect broader adjustments that major multinationals are making as Beijing cleans up its business climate and fails to meet many of its aggressive targets for new sectors.
GSK, Tesla take tough medicine with job cuts
Two high-profile multinationals are slimming down in China, with word that British drug giant GlaxoSmithKline (London: GSK) and US electric car superstar Tesla (Nasdaq: TSLA) have both made major job cuts to their local operations. Both cases acknowledge the difficulties of navigating the tricky China market, which superficially looks quite large and full of potential but in reality is quite fraught with obstacles.
Despite their differences, these 2 cases actually share some fundamental similarities based on unrealistic expectations many foreign firms have when they come to China. GSK’s woes stem from a bribery scandal that dates back almost 2 years, in which Beijing exposed and later punished the company for systematically bribing doctors and other medical professionals to purchase its drugs. Such practice is common in China, but Beijing is trying to clean up the business landscape. Read Full Post…
The following press releases and media reports about Chinese companies were carried on March 12. To view a full article or story, click on the link next to the headline.
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Alibaba (NYSE: BABA) Preparing To Invest $200 Mln In Snapchat – Source (Chinese article)
Baidu (Nasdaq: BIDU) Halts Updates, Maintenance For Mobile OS (Chinese article)
Car Inc (HKEx: 699) Announces Full-Year 2014 Results (HKEx announcement)
Online Listings Site Ganji Launches IPO Process – CEO (Chinese article)
Chinese Shoe Factory Workers Strike Over Benefits (English article)
Bottom line: Apple Watch should debut strongly in China thanks to extensive partnerships with top Chinese retailers and app makers, giving the product instant relevance in the local market.
Apple Watch coming to China
Global gadget leader Apple (Nasdaq: AAPL) has been in the local tech headlines nonstop these last few days, wowing Chinese fans with a customized version of its new Apple Watch that will debut in China next month as part of its global launch. Pundits are mixed on how the watch will fare in China, but I expect it should do quite well thanks to inclusion of China’s hottest apps together with the company’s own strong reputation for well-designed, cutting-edge products.
In a separate but probably related Apple headline, media are also reporting a new smart air conditioner that the company has developed with local appliance leader Haier (HKEx: 1169) will also debut in April. Apple first announced this alliance last June as part of a broader smart device alliance under the name of HomeKit, and I suspect the Apple Watch will be usable with these new air conditioners. Read Full Post…
The following press releases and media reports about Chinese companies were carried on March 11. To view a full article or story, click on the link next to the headline.
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EU Accuses 3 Chinese Firms Of Non-Compliance With Solar Panel Agreement (Chinese article)
P&G (NYSE: PG) Fined 6 Mln Yuan Over Crest’s Teeth-Whitening Ads (English article)
Sina (Nasdaq: SINA) Reports Q4 2014 Financial Results (PRNewswire)
Haier Says First HomeKit Air Con With Apple (Nasdaq: AAPL) To Debut In April (Chinese article)
Apple (Nasdaq: AAPL) Watch Not Yet Setting Chinese Pulses Racing (English article)
The following press releases and media reports about Chinese companies were carried on March 7-9. To view a full article or story, click on the link next to the headline.
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Amazon (Nasdaq: AMZN) China Opens Store on Alibaba (NYSE: BABA) Tmall (English article)
Momo (Nasdaq: MOMO) Announces Q4, Full Year Financial Results (Globe Newswire)
JD.com (Nasdaq: JD), iFlytek (Shenzhen: 002230) In Smart Home Products JV (English article)
Bottom line: China needs to realize that hardware from private western firms isn’t a risk to national security, and change its stance on new security-related requirements or risk another major trade war.
China’s growing insecurity
China’s growing insecurity is quickly shaping up as the next front line in a seemingly endless series of business disputes with the west, with word that Beijing is weighing a major new anti-terrorism law that would place huge new intrusive conditions on western technology firms. This story has been gaining rapid momentum over the last year, though until now many of the moves have been largely talk and one-time actions aimed at individual companies.
This new move, involving a proposed counter terrorism law, looks set to formally place many of the previous requirements on all foreign tech companies that sell their equipment to Chinese government agencies and other sensitive sectors like banks. Most of the companies being targeted come from the telecoms and related sectors, including networking equipment and the software that runs such equipment. Read Full Post…
