The following press releases and media reports about Chinese companies were carried on March 5. To view a full article or story, click on the link next to the headline.
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China Says Tech Firms Have Nothing To Fear From Anti-Terror Law (English article)
China’s Net Mobile Users Could Shrink This Year – Unicom (HKEx: 762) Chief (Chinese article)
Trina Solar (NYSE: TSL) Announces Q4 And Full Year 2014 Results (PRNewswire)
Phoenix SatelliteTV (HKEx: 3002) Warns Of 24-32 Pct Profit Drop For 2014 (HKEx announcement)
China Mobile (HKEx: 941) Launches 4G Roaming Services in 71 Countries And Regions (PRNewswire)
The following press releases and media reports about Chinese companies were carried on March 4. To view a full article or story, click on the link next to the headline.
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Obama Sharply Criticizes China’s Plans For New Technology Rules (English article)
ZTE (HKEx: 763) Doubled 4G Shipments, Global Share Exceeded 25 Pct In 2014 (Businesswire)
JD.com (Nasdaq: JD) Announces Q4 And Full Year 2014 Results (Globe Newswire)
China Overtakes US At The Box Office In February (English article)
Li Dongsheng Becomes Biggest TCL (Shenzhen: 000100) Shareholder After New Placement (Chinese article)
Bottom line: Beijing needs to roll out new rules allowing limited foreign investment in sensitive areas or risk seeing private companies like Ant Financial suffer from slower growth and artificially low valuations.
foreign investment bans need new approach
Alibaba-affiliated (NYSE: BABA) Ant Financial has been on a financial roller coaster ride over the past month, as it tries to raise billions of dollar to fund its growth en route to an IPO that will offer Chinese investors one of their first plays into the private banking sector. Some reports have said the new funding could value Ant, whose largest asset is the Alipay electronic payments service, at up to $50 billion. But others have put the figure as low as $30 billion, reflecting the intense negotiations taking place. Read Full Post…
The following press releases and media reports about Chinese companies were carried on March 3. To view a full article or story, click on the link next to the headline.
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58.com (NYSE: WUBA) Buys Real Estate Sales Site Anjuke For $267 Mln (Chinese article)
Britain’s Marks & Spencer (London: MKS) To Close 5 Shanghai Stores (English article)
Home Furnishings and Decoration E-tailer Jia.com Wins $160 Mln Series D Funding (English article)
New China Life Ends Plan For Strategic Stake Sale To Alibaba (NYSE: BABA) (Chinese article)
38 Online Lottery Ticket Sellers Suspend Sales, No Word On Resumption (Chinese article)
Bottom line: Ant Financial is likely to get a low valuation from its new private placement due to the exclusion of foreign investors, but could see the figure reach up to $70 billion by the time of its 2017 IPO if it can rapidly build up its new services.
SOEs squeeze Ant Financial’s valuation
Yet another report has come out about an ongoing private placement by Ant Financial, saying the financial services affiliate of e-commerce giant Alibaba (NYSE: BABA) is now planning a domestic IPO in 2017. That’s a little later than was indicated in previous reports, which were probably a little too optimistic about a company whose various businesses are mostly less than 2 years old.
But the more interesting element in this recent flurry of reports has been what valuation the new private placement will bring for Ant, which is financially separate from the New York-listed Alibaba. Some of the earlier reports indicated Ant could be valued at up to $50 billion, which admittedly looks quite optimistic for a firm at its stage of development. But now the latest reports are bringing the number down sharply, saying the new funding will value Ant at between $35 billion and $40 billion. Read Full Post…
The following press releases and media reports about Chinese companies were carried on February 28-March 2. To view a full article or story, click on the link next to the headline.
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China issues 4G FDD Licences To China Telecom (HKEx: 728), Unicom (HKEx: 762) (English article)
China draft Counterterror Law Strikes Fear In Foreign Tech Firms (English article)
Bottom line: A mega IPO by Postal Savings Bank next year is likely to attract little or no interest from private investors, while an upcoming IPO by 55Tuan could do slightly better but will still get only a lukewarm reception.
55Tun misses pricing target date
A couple of unattractive IPOs are in the headlines as China gets back to work after the Lunar New Year holiday, led by a massive plan by China’s Postal Savings Bank to raise up to $25 billion as soon as next year. While that plan may be a year or more away, a more advanced listing by group-buying site 55Tuan has failed to price its shares by a previously announced target date, leading some to speculate that the deal is running into trouble. Neither of these deals looks very exciting to me, and I suspect they won’t attract much interest from private investors either. Read Full Post…
The following press releases and media reports about Chinese companies were carried on February 26. To view a full article or story, click on the link next to the headline.
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China’s Postal Savings Bank Plans $25 Bln IPO: China Daily (English article)
NetEase (Nasdaq: NTES) Expands Global Presence With First HQ In The West (Businesswire)
WeChat Speeds Holiday Cash Gifts With Shakes, Red Envelopes (English article)
China Drops Leading Technology Brands For State Purchases (English article)
SMIC (HKEx: 981) In Talks To Acquire South Korea’s Dongbu HiTek – Sources (Chinese article)
Bottom line: China’s chocolate market could follow the recent boom for coffee as a lifestyle product, benefiting foreign names like Nestle, Hershey and Dove that can tap the preference for premium brands.
Nestle, Hershey seek success in upscale chocolate
A couple of chocolate stories were in the headlines over the Lunar New Year holiday, spotlighting the big potential for the foreign treat to boom in a similar way that coffee has over the last few years. One story had Swiss giant Nestle (Zurich: NESN) saying it will look to chocolate and premium coffee to boost its stagnating China sales. The other had US chocolate giant Hershey (NYSE: HSY) also predicting strong growth for the China market, following its own recent local acquisition. Read Full Post…
Bottom line: The merger of Didi and Kuaidi taxi apps could mark the start of a new round of consolidation between non-core assets of China’s major Internet firms.
Taxi apps Didi and Kuaidi to merge
After 2 years of making nonstop headlines due to their intense rivalry, leading taxi apps Didi Dache and Kuaidi Dache are leading the news once more with a new and quite unexpected merger. But equally interesting was the fact that this merger also marked an unusual shift in the equally bitter rivalry between Internet titans Alibaba (NYSE: BABA) and Tencent (HKEx: 700), which are Kuaidi’s and Didi’s main backers, respectively. That element of the story has huge implications, as it shows that China’s “Big 3” Internet companies of Tencent, Alibaba and Baidu (Nasdaq: BIDU) may be willing to consider similar mergers of their non-core assets, paving the way for a new and much-needed round of consolidation in areas like online video, mapping and group buying. Read Full Post…
Bottom line: An SEC probe is likely to find that Alibaba misled investors by failing to disclose a government report about widespread piracy on its Taobao site, which will weigh on its shares for the rest of the year as it moves to fix the problem.
Alibaba under scrutiny by the SEC
E-commerce giant Alibaba (NYSE: BABA) is quickly learning that the publicity it craves can be a double-edged sword, with word the company is being investigated for failing to disclose important negative information in the run-up to its blockbuster IPO last year. I’ve never been a big fan of Alibaba’s tendency to hyperbole, even though I do think it’s a fairly well-run company and quite savvy in its core e-commerce area. My general view is that companies should let their performance be their loudest spokesman, and let investors decide the rest.
Alibaba founder Jack Ma is the antithesis of that approach, and loves to hype his company at every opportunity he can. His cheerleading skills helped Alibaba secure a valuation well above what many expected, allowing it to raise a record $25 billion in its New York IPO last fall. Now it seems that the US securities regulator is looking into whether Alibaba failed to disclose key information that could have significantly cooled investor enthusiasm for the company’s IPO shares. Read Full Post…
