The following press releases and news reports about China companies were carried on May 14-16. To view a full article or story, click on the link next to the headline.
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Anti-Counterfeiting Group Suspends Alibaba (NYSE: BABA) After Member Outcry (English article)
Apple (Nasdaq: AAPL) Invests $1 Bln in Chinese Ride-Hailing Service Didi Chuxing (English article)
Stock Exchange Queries LeEco (Shenzhen: 300104) Over Film Unit’s High Value (Chinese article)
UPDATE: Since issuing its original microblog post, PPTV has issued new posts on its account that appear to indicate it won’t be closing. To view the latest posts, please click here.
Bottom line: PPTV looks set to become the first major victim of China’s online video wars after its microblog publication of a farewell message, while the money-losing Xunlei could become the second casualty.
PPTV bidding farewell?
Two of China’s major online video companies with mid-sized backers are in the headlines today, with ominous signals coming from PPTV and Xunlei (Nasdaq: XNET) that reflect the intense competition they face. The most intriguing headline has PPTV, which is owned by electronics retailing giant Suning (Shenzhen: 002024), announcing on its official microblog that it is closing, even as its actual website remains active.
The other headline has Xunlei, which is backed by smartphone maker Xiaomi, announcing its latest quarterly results that showed it swung to a loss as it battles with much larger rivals for an audience. We can probably also assume that PPTV was losing big money, and in fact just about everyone in China’s online video space is now in the red. Typical of the group is Youku Tudou, the industry leader whose net loss doubled to $70 million in last year’s third quarter before it was bought by e-commerce giant Alibaba (NYSE: BABA). Read Full Post…
The following press releases and news reports about China companies were carried on May 12. To view a full article or story, click on the link next to the headline.
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PPTV Posts Farewell Microblog Message, Website Remains Active (Chinese article)
Canadian Solar (Nasdaq: CSIQ) Reports Q1 Results, Raises Annual Revenue Guidance (PRNewswire)
Wanda Group Reconsiders De-Listing Property Unit: Sources (English article)
LeEco (Shenzhen: 300104) Joins Forces with Twitter for Global Brand Expansion (Businesswire)
Bottom line: Baidu’s shares could see more downside of 5-10 percent as a scandal involving its core search service plays out, but its dominant position means its business is unlikely to suffer a major longer term impact from the crisis.
Baidu ordered to clean up search results
It seems that I was wrong when I predicted that a scandal surrounding search leader Baidu (Nasdaq: BIDU) would quickly blow over and not much would change in the company’s misleading ways for displaying search results. The company is still at the center of major headlines In the second week since the scandal broke, this time getting ordered to change the way it displays search results.
That order was part of a broader set of government directives telling Baidu to change its ways, and other reports indicated the company has already taken down ads from thousands of medical companies. Such moves could theoretically have a major impact on Baidu’s lucrative search business, since hospitals, drug companies and medical device makers reportedly account for a very large part of its advertising revenue. Read Full Post…
Bottom line: More big global brands are likely to leave a major US anti-piracy group after its admission of Alibaba, which will suffer some negative publicity as it tries to clean up its sites of trafficking in fake goods.
Gucci quits US anti-piracy group after Alibaba joins
How would you feel if your former foe who constantly stole from you suddenly applied for membership in one of your favorite clubs? The answer is “probably not very happy”, which has led luxury goods giant Gucci to abruptly resign from a global anti-counterfeiting group after it admitted Chinese e-commerce leader Alibaba (NYSE: BABA) as its newest member.
This pair of companies have plenty of bad blood between them due to Gucci’s allegations of pirated goods being sold over Alibaba’s popular online marketplaces. Gucci parent Kering has sued Alibaba twice over the issue, most recently a year ago in New York, accusing the Chinese company of knowingly assisting in trade of counterfeit goods over its platforms and profiting from the process. Read Full Post…
Bottom line: Tiger Brokers could see strong growth by banking on Chinese demand for US and Hong Kong stocks, but also faces some risk if Beijing decides to regulate the company as a financial firm.
Tiger Brokers eyes Chinese with appetite for US, HK stocks
I’m kicking off my new series on noteworthy venture-backed companies with the fast-growing Tiger Brokers, which is feeding off a Chinese love of stocks and growing demand for access to overseas markets. In the current climate where China’s own stock markets have become quite volatile and prone to big sell-offs, Tiger’s gateway to the US and Hong Kong stock markets could prove a potent draw to Chinese traders looking to diversify their portfolios with international stocks from more mature markets.
In a small but highly symbolic footnote to this story, Tiger is also finally giving Chinese investors access to many of China’s hottest companies that are traded overseas, including the Internet “big 3” of Baidu (Nasdaq: BIDU), Alibaba (NYSE: BABA) and Tencent (HKEx: 700). That could ultimately provide some upside for many of those stocks over the longer term, since Chinese investors are likely to boost trading volumes for many of these homegrown companies whose shares previously languished due to lack of familiarity among western investors. Read Full Post…
Bottom line: A flurry of new corporate crackdowns will have the biggest impact on Baidu due to its role in a scandal over false advertising claims, and indicates this year’s summer crackdown season could be hotter than usual.
China cracks down on web merchants, drug makers
Summertime in China is a season for crackdowns, and we’re getting a taste of a potentially hot summer ahead fueled by a high-profile scandal involving false advertising claims on leading search engine Baidu (Nasdaq: BIDU). Three separate crackdowns are in the headlines as we begin the new week, including 2 that look potentially tied to the Baidu scandal.
That scandal consumed China for much of last week, after a student with cancer claimed he was duped into seeking treatment at a hospital that made false claims about its ability to treat his disease. (previous post) In his long list of complaints before he died of his illness, Wang Zexi also accused Baidu of deception for putting the hospital and its inflated claims high in his search results simply because the hospital paid a rich premium for such high placement. Read Full Post…
Bottom line: LeEco’s plan to develop a major Silicon Valley office on land purchased from Yahoo reflects the rapid rise and global ambitions of the former, and the accelerating decline of the latter.
LeEco eyes new Silicon Valley home
A new report involving a Silicon Valley land deal is shining a spotlight on Chinese Internet giant LeEco (Shenzhen: 300104) and US counterpart Yahoo (Nasdaq: YHOO), illustrating the rapid rise of the former and accelerating descent of the latter. The deal itself is rather mundane, involving a 48.6 acre plot of undeveloped land that Yahoo bought a decade ago for $100 million near its Silicon Valley headquarters. LeEco is reportedly eyeing the land for development of a new campus, some 2 years after it set up its original dual US headquarters in Silicon Valley and Los Angeles.
LeEco, formerly known as LeTV, is one of China’s fastest rising online entertainment companies that is increasingly moving into a wide array of new product areas. Two of those are e-commerce and smart cars, and I suspect the Silicon Valley expansion would house both of those initiatives. LeEco is also moving into film production, though that element of its US efforts is probably based out of its Los Angeles office. Read Full Post…
Bottom line: A new global tie-up with Uber marks a major advance for Ant Financial’s Alipay, while new Internet car initiatives by Tencent and Alibaba are unlikely to find big audiences despite getting big resources from their backers.
Alibaba, Tencent car initiatives drive ahead
A series of stories involving Alibaba (NYSE: BABA) and Tencent (HKEx: 700) reflect the growing importance China’s leading Internet firms are placing on cars, which could be the next major battleground for web-based services. Alibaba is in 2 related headlines, including one that says its affiliated Ant Financial unit has signed a major tie-up that will allow anyone in the world to use its Alipay electronic payments service to pay for Uber hired cars.
The other 2 headlines both involve car manufacturing, including one that says mass production has begun for the first Internet-equipped model co-produced through a tie-up between Alibaba and SAIC (Shanghai: 600104), China’s leading car maker. The other headline says a car-making venture backed by Tencent has been quietly poaching workers from the likes of Google (Nasdaq: GOOG) and Germany’s Daimler (Frankfurt: DAIGn), as it gears up for its own production. Read Full Post…
The following press releases and news reports about China companies were carried on May 4. To view a full article or story, click on the link next to the headline.
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Tencent (HKEx: 700) Venture Poaches Google Talent as Chinese Techs Pile into Autos (English article)
SAIC Begins Mass Production for Car Jointly Produced With Alibaba (NYSE: BABA) (Chinese article)
Bottom line: A new strategic partnership between Amazon and Chinese retailer Gome could expand later this year into an equity alliance that would see the former buy about a fifth of the latter for around $500 million.
Gome ties with Amazon
A year after getting dumped by private equity giant Bain, fading electronics retailer Gome (HKEx: 493) is being courted by yet another big western name, with word of a new major tie-up with global e-commerce leader Amazon (Nasdaq: AMZN). This particular tie-up is most intriguing due to the timing, which comes after reports emerged last year saying Gome’s controversial founder Huang Guangyu might soon be freed from prison after serving about half of a 14-year sentence for bribery and insider trading.
Reports of the early release, combined with a buyout of Bain’s 5 percent stake last year, hint that Huang may be making new plans for Gome if and when he emerges from prison soon. This new tie-up with Amazon suggests that a major investment from the US e-commerce giant could be in the offing, which could be part of Huang’s plan to breathe new life into his faded retailing empire. Read Full Post…
