The following press releases and media reports about Chinese companies were carried on October 31-November 2. To view a full article or story, click on the link next to the headline.
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Jin Jiang (HKEx: 2006) Prepares to Raise 4.5 Bln Yuan to Improve Capital Structure (Chinese article)
Tsinghua Unigroup to Take 25 Pct in Taiwan’s Powertech (Taipei: 6239) for $600 Mln (English article)
VMWare (NYSE: VMW), Sugon (Shanghai: 603019) Form China JV (Chinese article)
Bright Food Said to Prepare IPO of $1 Bln Manassen Foods Distribution Arm (English article)
LeTV (Shenzhen: 300104) CEO Sells 100 Mln Shares, Lends Proceeds to Company (Chinese article)
The following press releases and media reports about Chinese companies were carried on October 29. To view a full article or story, click on the link next to the headline.
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Mobile Restaurant Queuing App ‘Delicious No Wait‘ Wins $100 Mln Series C (English article)
Bottom line: LeTV’s latest hired car services investment and high-profile poaching of top talent from a rival look similar to the recent rapid rise and sputtering of Xiaomi, and the company could follow a similar trajectory by this time next year.
LeTV steals top talent from Youku Tudou
After watching the meteoric rise of online video sensation LeTV (Shenzhen: 300104) over the past year, I’m quickly tiring of this company and its hyperactive diversification strategy. The latest move in that drive is taking LeTV onto the road, with word the company is investing a hefty $700 million for a controlling stake of struggling private car services firm Yidao Yongche.
At the same time, other media are reporting that LeTV has just stolen a top executive from chief rival Youku Tudou (NYSE: YOKU), which announced last week it has received a buyout offer from e-commerce giant Alibaba (NYSE: BABA). Anyone feeling a sense of deja vu from these latest 2 LeTV headlines, and from LeTV’s meteoric rise in general, would be correct. Read Full Post…
Bottom line: Beijing needs to accelerate reform of traditional media in the face of rising challenges from players like Alibaba and Baidu, or risk seeing many of these state-run companies fall into irrelevance.
Alibaba challenges traditional media to speed up reform
A wave of mega-mergers sweeping through China’s Internet over the last 2 years saw its biggest deal to date announced late last week, when e-commerce leader Alibaba (NYSE: BABA) offered $4.6 billion for the more than 80 percent of leading online video site Youku Tudou (NYSE: YOKU) it doesn’t already own. The move marked the latest challenge to China’s traditional media industry, which has been monopolized for years by state-run broadcasters and printed publications.
If this latest mega-deal gets completed, a new Youku Tudou with access to Alibaba’s cash and other vast resources will almost certainly accelerate its challenge to traditional media by aggressively rolling out compelling new on-demand products and premium content. Read Full Post…
Bottom line: LeTV’s fledgling e-commerce business could rise quickly but may also experience growing pains that bring negative publicity, as media start to tire of the company’s constant hype and its fortunes start to stagnate.
LeTV jumps into e-commerce
Online video sensation LeTV(Shenzhen: 300104) has never been one to do anything quietly, and that’s true once more with its sudden jump into the hotly contested e-commerce space. In its usual high-profile fashion, LeTV has sent out emails to reporters detailing its huge success with a recent e-commerce promotion, and also its launch of a US e-commerce site.
But the media weren’t giving to much ink to LeTV’s hype, and instead focused on negative reports of logistical problems connected to its recent promotion on September 19. Such problems don’t come as a huge surprise for an e-commerce newcomer like LeTV, which is far better known for its online video service than Inernet shopping. Read Full Post…
The following press releases and media reports about Chinese companies were carried on October 15. To view a full article or story, click on the link next to the headline.
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Huawei Biggest China Smartphone Brand in Q3, Xiaomi Finishes Second (Chinese article)
3 China Telcos Complete Sale of Towers to China Tower (HKEx announcement)
Online Loan Search Platform Rong360 Lands 1 Bln Yuan Series D Funding (English article)
LeTV (Shenzhen: 300104) in Product Delivery Scandal After Sept 19 Promotion (Chinese article)
Geely (HKEx: 175) Said to Plan Research Center for London Black Cabs in UK (English article)
Bottom line: Qihoo’s settlement of its dispute with Coolpad could ultimately see the former buy out their joint venture, leaving the latter open to a takeover by LeTV.
Qihoo, Coolpad settle JV dispute
Security software specialist Qihoo 360 (NYSE: QIHU) and smartphone maker Coolpad (HKEx: 2369) have announced a settlement in the spat over their troubled joint venture, though this hardly looks like the end of an entertaining story that has captivated China’s high-tech world for the last few months. This kind of settlement seemed likely, after Qihoo tried to forcibly sell its stake in the joint venture to Coolpad over claims that the latter had violated an anti-compete clause in their agreement.
Qihoo and Coolpad formed their joint venture last year, and Qihoo made its complaint after Coolpad later formed another smartphone manufacturing partnership with online video company LeTV (Shenzhen: 300104) in June. Now Qihoo says it has settled its dispute by agreeing to boost its stake in the Coolpad joint venture to 75 percent, giving it clear control of the enterprise. Read Full Post…
A brewing spat between security software giant Qihoo 360 (NYSE: QIHU) and struggling smartphone maker Coolpad (HKEx: 2369) has provided some good entertainment for followers of China’s vibrant Internet sector over the last few weeks. The tale has all the elements of a good trashy romance novel, including a love triangle and vengeful scheming by China’s most famous Internet bad-boy.
But more fundamentally, the tale is also filled with valuable lessons for anyone doing business in China’s high-tech sector, or really in any of the country’s emerging industries where private entrepreneurs are driving the growth. The story’s biggest moral is to be careful when choosing your business partners – a lesson that many private investors have learned over the last 3 decades as China transforms from a socialist system to a market-oriented economy. Read Full Post…
The following press releases and media reports about Chinese companies were carried on September 10. To view a full article or story, click on the link next to the headline.
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3 China Telcos to Start Taking iPhone 6s Orders from Sept 10 (Chinese article)
Alibaba’s (NYSE: BABA) Koubei to Spend 5 Bln Yuan on Offline Merchants in 2015 (English article)
Minsheng Investment to Spend 30 Bln Yuan on Indonesia Industrial Park (Chinese article)
Coolpad (HKEx: 2369) Shares Drop 17 Pct at Trading Resume, Amid Qihoo Dispute (Chinese article)
LeTV (Shenzhen: 300104) Invests in Battery Charging Company (Chinese article)
Bottom line: The next few months are likely to see a battle unfold for control of Coolpad, with Qihoo as the likely victor and a smaller chance that LeTV could emerge as a white knight savior.
Tug of war brews for control of Qihoo
What’s likely to become an entertaining battle for control of smartphone maker Coolpad (HKEx: 2369) has taken a new twist, with the company criticizing its joint venture partner Qihoo 360 (NYSE: QIHU) for being a control freak. The remarks from an unnamed Coolpad executive represent the first semi-official response to a surprise move by Qihoo to shut down their joint venture formed less than a year ago.
Qihoo’s said earlier this week that it planned to exercise a “put option” that would effectively shutter the joint venture, forcing Coolpad to pay $1.5 billion to buy out Qihoo’s stake. Qihoo said it was entitled to make the move after Coolpad violated a non-compete clause in their agreement by selling a major stake in itself to online video firm LeTV (Shenzhen: 300104), which was also planning a move into the smartphone business. But the struggling Coolpad can hardly afford the $1.5 billion price tag that Qihoo has said dissolution of the venture will cost. Read Full Post…
Bottom line: Qihoo’s latest move forcing Coolpad to buy-out their joint venture could be a bargaining tactic to pressure Coolpad into ditching a separate tie-up with LeTV, and could spark a bidding war for Coolpad by Qihoo and LeTV.
Bidding war brewing for Coolpad?
Smartphone maker Coolpad (HKEx: 2369) has become a bit of a hot potato lately, though it’s not clear if the company is hot property or a pariah these days. The company was one of China’s earliest smartphone makers, and quickly built up share as a leading name in its fledgling home market. But rampant competition as others piled into the market hurt its prospects, prompting it to form a major equity tie-up with security software maker Qihoo (NYSE: QIHU) last December, and then with online video firm LeTV (Shenzhen: 300104) last month.
The LeTV tie-up surprised many, and led Qihoo feeling betrayed. Now Qihoo, whose equity tie-up came in the form of a joint venture, appears to be seeking revenge for that betrayal. In its latest move to express its outrage, Qihoo has just announced it will exercise a non-compete option in their agreement that will force Coolpad to buy out their joint venture at double the current market value. Read Full Post…
