Security software maker Cheetah Mobile is trying to add some spring to its sputtering New York IPO with newly released data showing it was quite profitable in the first quarter, with mobile revenue accounting for 17 percent of its revenue. It’s hard to interpret too much from these newly announced numbers since no year-ago figures were given in the report I read. But what seems clearer is that Cheetah is trying hard to revive interest in its public listing, which is rapidly stumbling as the current window for IPOs in New York and Hong Kong quickly closes. Read Full Post…
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Japan’s Line, Microsoft Xbox Move Into China
After years of hovering at the edge of China’s gadget and app markets, Japanese mobile instant messaging giant Line and Microsoft’s (Nasdaq: MSFT) Xbox gaming console are both reportedly preparing to enter the market. Line’s plan looks the most exciting to me, as the product has quickly gained a major following in Asia and could find a receptive audience in China with its new partnership. Meantime, I’m less optimistic about Xbox, as its China entry comes after its consoles have been available on the local gray market for years, and it will face competition from a new group of homegrown products. Its choice of the struggling Shanghai Media Group (SMG) as its partner also doesn’t look too exciting to me. Read Full Post…
New York IPO Scorecard: Still Some Life
Two weeks after this year’s first Chinese IPO in New York, there’s still a bit of life left in the market despite recent signs of slowing momentum. That’s my quick assessment after looking at the performance of the 4 companies to list so far this year, starting with education services firm Tarena (Nasdaq: TEDU), followed by clinic operator iKang (Nasdaq: KANG) and finally online real estate services firm Leju (NYSE: LEJU) and microblogging giant Weibo (Nasdaq: WB). Meantime, media are reporting that this year’s most highly anticipated IPO from Alibaba is getting delayed, after reports emerged last week that the e-commerce giant could make its first regulatory filing for a New York offering this week. Read Full Post…
Weibo Debut Clouds Outlook For Tech IPOs
Everyone’s buzzing today about the trading debut of Weibo (Nasdaq: WB), following a performance by the Sina (Nasdaq: SINA) microblogging unit that was filled with mixed signals. Potential investors in the company will inevitably have many questions about Weibo’s future, as it seeks to carve out a secure and profitable place for itself in China’s competitive social networking (SNS) space. But from the bigger perspective, this mixed performance is the latest sign that the window of positive sentiment towards Chinese Internet IPOs is closing fast in New York, though it could remain open for perhaps another few weeks.
News Digest: April 12-14, 2014
The following press releases and media reports about Chinese companies were carried on April 12-14. To view a full article or story, click on the link next to the headline.
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- Jumei.com Files For New York IPO To Raise Up to $400 Mln (Chinese article)
- Sina (Nasdaq: SINA) Announces up to $500 Mln Share Repurchase Program (PRNewswire)
- AutoNavi (Nasdaq: AMAP) Agrees to Be Acquired by Alibaba (English article)
- Sohu (Nasdaq: SOHU) CEO Zhang Prepares For Change, Eyes Common Netizens (Chinese article)
- Trina Solar (NYSE: TSL) Updates Q1 2014 Guidance (PRNewswire)
- Latest calendar for Q1 earnings reports (Earnings calendar)
Tarena Sputters As Year’s First China IPO In NY
Educational services provider Tarena (Nasdaq: TEDU) has become the first Chinese company to list in New York this year, posting a disappointing debut hinting that US investor enthusiasm towards China stocks may be starting to cool. But truth be told, Tarena hardly looks like the vast majority of Chinese companies rushing to list in New York, most of which are in the Internet space. By comparison, Tarena is a relatively niche provider of education services for software engineers that is growing quickly enough but is still quite small. Read Full Post…
Shanda Overhaul Continues With Ku6 Media Sale
Earlier reports that the founder of online entertainment company Shanda was looking to sell his empire have taken an interesting twist, with word that a buyer has emerged for the company’s struggling Ku6 Media (Nasdaq: KUTV) online video unit. News that Shanda will sell 41 percent of Ku6 sent the unit’s shares soaring 43 percent, as investors bet the company would get privatized. The move adds weight to previous reports that Shanda founder Chen Tianqiao wants to sell off the various pieces of his online entertainment empire, with leading e-commerce firm Alibaba named as a potential buyer. Read Full Post…
E-House Finds Strong Partner In Tencent
Perhaps I was a bit hasty a couple of weeks ago in declaring that a new IPO plan by online real estate company E-House (NYSE: EJ) for its Leju unit looked like the recycling of an old listing that flopped and was eventually privatized. Since that initial announcement, E-House has followed with a couple of new plans for Leju, both involving collaboration with Tencent (HKEx: 700), China’s biggest Internet company. In the latest of those, E-House has just announced that Tencent will become a strategic investor in Leju, paying $180 million for 15 percent of the unit. (company announcement) Read Full Post…
China Mobile’s Sagging Profit: Time To Buy?
I don’t usually offer direct investment advice in this space, but today I can’t resist opining that perhaps investors are being a bit hasty in dumping shares of China Mobile (HKEx: 941; NYSE: CHL) after the nation’s dominant wireless carrier reported its first annual profit decline in more than a decade. The decline shouldn’t come as a huge surprise, since China Mobile reported an 8.8 percent profit decline in the third quarter. Obviously falling profits are never something investors want to see. But in this case it’s also worth noting that China Mobile has responded to the challenge with a number of new initiatives that show it is finally waking up to a new reality where it faces growing competition from the private sector. Read Full Post…
NetEase Moves Into US, Vipshop Tries Russia
Two of China’s leading Internet companies are taking their first baby steps outside their home market, with word that online game maker NetEase (Nasdaq: NTES) is moving into the US and fast-rising discount e-commerce firm Vipshop (NYSE: VIPS) is tying up with a Russian partner. The pair are joining China’s “big 3” Internet firms, Alibaba, Baidu (Nasdaq: BIDU) and Tencent (HKEx: 700), in making recent moves outside their home market, as each looks for new growth opportunities. All of these companies also want to convince the world that they can compete in the real world outside their own highly protected and heavily restricted home market. Read Full Post…
Internet Consolidation To Test Anti-Monopoly Regulator
After years of fragmentation, China’s Internet has undergone a sudden and radical overhaul over the past year, with 3 major firms emerging as major consolidators. The frenzy of new tie-ups and acquisitions has been a welcome development, helping to cool overheated competition in a wide array of sectors where most companies were losing money.
But with the emergence of Alibaba, Tencent (HKEx: 700) and Baidu (Nasdaq: BIDU) as the 3 major consolidators, China’s anti-monopoly regulator should start to give closer scrutiny to future deals to avoid too much reduction in the competition necessary to ensure future innovation and consumer choice. Such scrutiny could and should ultimately lead to the veto of some future deals, especially larger ones, by regulators who need to become more assertive in the space.
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