The following press releases and media reports about Chinese companies were carried on December 23. To view a full article or story, click on the link next to the headline.
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Group Buying Site Meituan Lands $700 Mln Series D Funding – Sources (English article)
Changjiang Electronics (Shanghai: 600584) Offers $780 Mln For Stats ChipPac (English article)
Huace Film (Shenzhen: 300133) Invests In Korea’s Next World Entertainment (Chinese article)
Qihoo 360 (NYSE: QIHU) To Offer Free Voice Calling With New Internet App (Chinese article)
Alibaba (NYSE: BABA) To Launch Own-Brand Products, No Smartphone Plans (Chinese article)
Bottom line: 2015 will see an acceleration in 4G services, with China Telecom and Unicom winning commercial FDD licenses in the first quarter and 2-4 VNO licensees potentially emerging as real rivals to the big 3 telcos.
4G set to take off in 2015
A number of telecoms stories are in the headlines today, highlighting the huge hopes everyone has for new 4G services that will open up the market to a wide array of new products. Leading the headlines are word that China Telecom (HKEx: 728; NYSE: CHA) and Unicom (HKEx: 763; NYSE: CHU) have gotten the green light to expand their trial 4G networks, as the nation’s 2 smaller mobile carriers play catch-up to industry titan China Mobile (HKEx: 941; NYSE: CHL).
At the same time, another new report is showing the pathetic state of under-utilization for China Mobile’s 3G network, which uses a homegrown technology that has been plagued with problems. Finally there’s a third report saying the telecoms regulator has just issued its fifth and possibly final batch of virtual network operator (VNO) licenses, creating several dozen new carriers that will compete in in 4G by leasing capacity on the networks of the big 3 telcos. Read Full Post…
Bottom line: Qunar’s ballooning losses reflect its aggressive spending on market share, which will turn off investors and pressure its stock until it shows signs of moving towards profitability.
Qunar losses swell past revenues
My third-quarter Chinese earnings season officially ends today with the newly issued results of online travel agent Qunar (Nasdaq: QUNR), whose losses appear to be spiraling out of control. Frankly speaking, I could never really understand why investors were so attracted to this company, whose main asset seems to be its association with leading Chinese search engine Baidu (Nasdaq: BIDU), which also happens to be Qunar’s majority stakeholder. Read Full Post…
Bottom line: Dwindling investor appetite will result in a weak debut for Momo’s upcoming IPO, which may also get negative publicity as it gets caught in a minor scandal in its home China market.
Momo pares back IPO target
Mobile social networking service (SNS) provider and IPO candidate Momo Inc has become a regular feature in the Chinese headlines these last few days, but for all the wrong reasons. The company was in the news late last week when it slashed the size of its planned New York listing, and is now back with a fresh set of headlines on a scandal involving crooked business dealings. This certainly isn’t the kind of publicity a company wants on the eve of its IPO, which was set to price and debut either this week or next. There’s really not much room for Momo to delay the plan without falling into the Christmas holiday lull, meaning its debut could fizzle due to the stream of bad news. Read Full Post…
The following press releases and media reports about Chinese companies were carried on November 29-December 1. To view a full article or story, click on the link next to the headline.
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Alibaba-Backed (NYSE: BABA) Momo Seeks Up To $232 Mln In Chat App IPO (English article)
Wanda Cinema Line Gets First-Round Regulatory Approval For China Listing (Chinese article)
Cosmetics Start-Up Hanhoo Gets 100 Mln Yuan-Plus Funding From Sequoia (Chinese article)
TPG Exits China Grand Auto Investment Via Haitong (HKEx: 665) Sale (English article)
Ctrip (Nasdaq: CTRP) Says Execs Sold Company Shares For Cruise Investment (Chinese article)
Bottom line: After a slow start, China’s VNO program is picking up momentum, with new operators poised to sign up a collective 50 million in total subscribers as soon as the middle of next year.
VNOs gain momentum
After a decidedly slow start in their first half year of life, China’s young crop of virtual network operators (VNOs) are starting to show some new signs of momentum, including a boost with the new awards of licenses to leading online video site Youku Tudou (NYSE: YOKU) and fast-rising smartphone maker Xiaomi. The VNO program is part of Beijing’s efforts to breathe new life into the telecoms services sector by opening it up to new private operators that can compete with the big 3 state-run telcos. But the program has been plagued with glitches since the first new services launched in the spring, with the result that progress has been slower than expected. Read Full Post…
Bottom line: A weak debut for eHi reflects waning investor enthusiasm for Chinese IPOs, while a new $585 million investment in Huayi Bros reflects strong growth prospects for the independent filmmaker.
eHi IPO sputters out of the gate
A flurry of fund-raising events are in the headlines today, led by a weak trading debut for car rental specialist eHi Car Services (NYSE: EHIC) and a big capital infusion for Huayi Bros (Shenzhen: 300027), one of China’s leading independent film makers. Rounding out the activity are reports confirming that smartphone high-flyer Xiaomi has made its largest investment to date, spending $300 million for a stake in iQiyi, China’s second largest online video site owned by Internet search leader Baidu (Nasdaq: BIDU). Read Full Post…
Bottom line: A year-end rush of Chinese IPOs will include mostly second-tier firms seeking to capitalize on positive market sentiment, leading to weak pricing and delayed trading debuts.
eHi IPO delayed
The year-end rush of IPOs that I’ve been predicting has hit a speed bump, with word that one offering set to debut last week has been delayed and a second has been scaled back dramatically. The first piece of news saw car rental specialist eHi (NYSE: EHIC) unexpectedly delay its offering at the last minute, reportedly after the company came under suspicion of submitting false information in some of its earlier IPO filings. Meantime, Sky Solar Holdings (Nasdaq: SKYS) had to dramatically scale back its planned US listing after meeting with lukewarm demand, as it became the first solar panel-linked company to make a US listing in 4 years. Read Full Post…
Nearly a month after their global launch, Apple’s (Nasdaq: AAPL) latest iPhones are now formally on sale here in China. We’ll no doubt get flooded with numbers about initial sales in the next few days, some of which may be correct but many of which will probably be just guesses. One larger question that’s on everyone’s mind is promotions by the nation’s 3 telcos, as China Mobile (HKEx: 941; NYSE: CHL), China Unicom (HKEx: 762; NYSE: CHU) and China Telecom (HKEx: 728; NYSE: CHA), as all come under government pressure to cut back on their aggressive subsidies.
The early news looks relatively good for Apple on that front, with one media report saying the 3 telcos are mostly maintaining their aggressive iPhone subsidies from previous levels. We’ll examine that issue shortly, and whether it even matters much. But first let’s look at the bigger picture that had the iPhone 6 receive a relatively strong reception after it went on sale in China on Friday, 4 weeks after its global debut and 3 weeks after its Asia launch. Read Full Post…
Supreme Court rules for Tencent in antitrust lawsuit
Big foreign multinationals may be feeling the heat from a recent string of anti-monopoly investigations, but Chinese Internet firms won’t have to face such worries anytime soon. That’s the latest message coming from Beijing, with word that China’s Supreme People’s Court has ruled in favor of social networking giant Tencent (HKEx: 700) in a long-running lawsuit claiming the company controlled a monopoly in the instant messaging market. I originally sided with Tencent when the case was filed 3 years ago by security software specialist Qihoo 360 (NYSE: QIHU), because I felt the lawsuit looked retaliatory for an unrelated suit between the pair at that time. But much has changed since then, most notably the meteoric rise of Tencent’s wildly popular WeChat mobile instant messaging service that has become an indispensable tool for millions of people in China, myself included. Read Full Post…
A new cloud computing tie-up between US networking equipment giant Cisco (Nasdaq: CSCO) and leading Chinese TV maker TCL (HKEx: 1070; Shenzhen: 000100) caught my attention more due to its broader implications for both companies rather than the modest size of the actual investment. The deal comes as Cisco is facing difficulties in China, the direct result of an ongoing spat between Washington and Beijing over cyber security. At the same time, it also represents the latest in a string of recent signals that TCL is eying some new global alliances, a decade after 2 high-profile tie-ups with other western partners ended in disaster. Read Full Post…
