The following press releases and news reports about China companies were carried on June 25. To view a full article or story, click on the link next to the headline.
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PBOC to Study Alibaba’s (NYSE: BABA) Shadow Banking Activities, Zhou Says (English article)
MediaTek (Taipei: 2454) Calls on Taiwan to Ease Limits on Investment from China (Chinese article)
MIIT Says Licensed Non-Telcos Allowed to Provide Free Voice Service (Chinese article)
Qualcomm (Nasdaq: QCOM) Sues Meizu for Patent Infringement (Chinese article)
SMIC (HKEx: 981) to Buy 70 Pct of Italy’s LFoundry for 49 Mln Euros (HKEx announcement)
Bottom line: Alibaba’s victory in a shareholder lawsuit is partly justified due to its pre-IPO disclosure that piracy is a major risk for the company, but it still should have disclosed a recent government report sharply criticizing it on the matter.
Alibaba triumphs in shareholder lawsuit
E-commerce giant Alibaba (NYSE: BABA) is a master at influencing public opinion through its own hype, but is far less successful with government officials who often view its aggressive ways with more skepticism. With that background in mind, the company’s new courtroom victory in a shareholder lawsuit looks like a refreshing nod of approval from a government source, setting it apart from the usual cheers from fans of the company’s stock. I would probably agree with that view, even though in this case I’m not sure I completely agree with the judge’s decision. Read Full Post…
Bottom line: Baidu’s new move into economic indexes looks like a smart use of big data but is also risky due to potential interference from Beijing, and stands a 30-40 percent chance of becoming a significant revenue source.
Baidu gets into index business
When it comes to economic indexes in China, Beijing holds a strong lock over the market due to its unique ability to collect the necessary data needed to compile broad national snapshots. But there’s also a political element to the story due to the sensitivity of economic growth and issues like unemployment. That makes leading search engine Baidu’s (Nasdaq: BIDU) decision to enter the business look both savvy and also slightly risky. But if Beijing doesn’t interfere, the plan looks like a potential new revenue source that would also raise Baidu’s profile by taking advantage of its mountains of big data. Read Full Post…
The following press releases and news reports about China companies were carried on June 23. To view a full article or story, click on the link next to the headline.
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Alibaba (NYSE: BABA) Wins Dismissal of Lawsuit Over Pre-IPO Regulatory Warning (English article)
Baidu (Nasdaq: BIDU) Creates Own Indexes to Paint Picture of China’s Economy (English article)
Fresh Food B2B M-commerce App Meicai Raises $200 Mln Series D Funding (English article)
Tujia Acquires Mayi, Becomes China’s Largest Shared Room Listing Service (Chinese article)
Stock Exchange Queries LeEco (Shenzhen: 300104) on Big Inventory, Accounts Receivable Rises (Chinese article)
Bottom line: Tencent’s Supercell purchase looks like a relatively smart use of its big cash pile, and will give it access to leading-edge games and let it focus on the more important task of developing an ecosystem of products and services around WeChat and QQ.
Tencent gets $8.6 bln charge from Supercell
Internet giant Tencent(HKEx: 700) has been a victim of its own success, accumulating one of China’s largest cash pots even as it remained quite conservative as an acquirer. But now the company has taken some pressure off of itself to invest that cash, with the announcement of its purchase of a controlling stake in Finnish game maker Supercell for a hefty $8.6 billion. I haven’t done any detailed research on the purchase, but this does appear to be the largest acquisition of all time by a Chinese Internet company, and is probably worth as much as or even more than all of Tencent’s other acquisitions to date combined. Read Full Post…
Bottom line: JD.com will quietly close Yihaodian after acquiring the online store from Walmart, and Amazon is the most likely next large player to withdraw from China’s e-commerce market in the next few years.
JD.com takes over Walmart’s Yihaodian
In what can only be described as a major surrender, Walmart (NYSE: WMT) is selling its struggling online flagship Yihaodian in exchange for about $1.5 billion worth of shares in JD.com (Nasdaq: JD), China’s second largest e-commerce player. The development isn’t a complete surprise, since Yihaodian has struggled to compete with JD and industry titan Alibaba (NYSE: BABA) since Walmart purchased the company 4 years ago. The withdrawal also shines a spotlight on the very real fact that foreign companies often can’t compete on China’s Internet, and raises the question of whether Amazon (Nasdaq: AMZN) might be the next to abandon the complex market. Read Full Post…
The headlines last week were littered with signs of growing unrest and chaos among the dozens of US-listed Chinese companies trying to privatize from New York and return to China in search of higher valuations. One of the biggest items saw signs of a new bidding war break out for private clinic operator iKang (Nasdaq: KANG), while another saw data center operator 21Vianet (Nasdaq: VNET) mount what increasingly looks like a stealth privatization campaign. A third saw social media website operator YY (Nasdaq: YY) become the first to abandon its privatization bid altogether, casting doubt on many of the other similar pending offers that have gone for months without any progress. Read Full Post…
Bottom line: A new IPO from Postal Savings Bank will price and debut strongly thanks to its conservative stance, while another offering from Orient Securities could also do moderately well due to its small size.
Postal Bank set for mega-IPO in HK
Two financial institutions are lining up to launch IPOs in Hong Kong this week, led by what’s likely to be the biggest offering this year by China’s stodgy Postal Savings Bank, whose listing could raise up to $8 billion. In a far smaller deal, brokerage Orient Securities is also set to announce a HK$1.15 billion ($174 million) IPO deal as soon as today, in what looks like a slightly desperate bid for cash following its much larger Shanghai listing last year at the height of China’s stock market boom. Read Full Post…
Bottom line: A new China Life bid for iKang could trump Yunfeng, while 21Vianet could be mounting a stealth privatization bid that would see it slowly sell most of its shares to big buyers before mounting a formal de-listing attempt.
China Life eyeing bid for iKang?
A few strange twists are taking place in the story that has seen some 40 US-listed Chinese companies launch privatization bids since the start of last year, led by the surprise re-heating of a bidding war for private clinic operator iKang (iKang). In a separate headline, data center operator 21Vianet (Nasdaq: VNET) gave a new signal that it will abandon a previous buyout offer and may launch a stealth de-listing bid instead. And in the strangest development, the board of web portal operator Sohu (Nasdaq: SOHU) has rejected an investment plan by the company’s founder that looked like a prelude to a possible buyout offer at the time. Read Full Post…
Bottom line: Shares of Alibaba and JD.com will remain under pressure for the next few months from opportunistic short selling, but should rebound late this year due to strong growth prospects for their core e-commerce business.
Short sellers pressure Alibaba, JD shares
Separate reports are spotlighting a recent short-selling spree targeting China’s 2 leading e-commerce companies, Alibaba (NYSE: BABA) and JD.com (Nasdaq: JD), wiping out billions of dollars in market value over the last few weeks. But the negative sentiment also raises the question of whether there’s something systemically wrong with these companies and China’s e-commerce market in general, or whether this is a short-term phenomenon created by people looking to make some quick profits. Read Full Post…
The following press releases and news reports about China companies were carried on June 15. To view a full article or story, click on the link next to the headline.
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Alibaba (NYSE: BABA) Sees Growth Rising to 48 Pct in First Forecast (English article)
ChemChina, New Hope Said to Weigh McDonald’s (NYSE: MCD) Franchise Bids (English article)
Yingli Green Energy (NYSE: YGE) Reports Q1 Results (PRNewswire)
China’s Midea (Shenzhen: 000333) Wants Only 49 Pct of Kuka: Sources (English article)
NXP (Nasdaq: NXPI) Selling Products Unit for $2.75 Bln to Chinese Group (English article)
