The following press releases and news reports about China companies were carried on April 29. To view a full article or story, click on the link next to the headline.
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Carl Icahn Says Sold Entire Apple (Nasdaq: AAPL) Stake on China Woes: CNBC (English article)
Bottom line: New China setbacks for Disney and Paramount look relatively minor, and reflect their growing involvement in a market whose fast growth is also driving Comcast’s pursuit of DreamWorks Animation.
DreamWorks’ China exposure draws Comcast
In a very rare occurrence, 3 top Hollywood studios are all in the China headlines today, reflecting the growing links between these media titans and a country that could become the world’s largest entertainment market in the next decade. Leading the headlines are relatively minor China setbacks for Disney (NYSE: DIS) and Paramount Pictures, which are facing new battles with Beijing censors and unhappy local clients, respectively.
Meantime, DreamWorks Animation (NYSE: DWA) is reportedly in talks to be bought by US cable TV giant Comcast (Nasdaq: CMCSA), and some are pointing out that a major driver behind the deal may be DreamWorks’ strong China exposure. That’s because DreamWorks Animation has bet big on the market, with a major joint venture in Shanghai that produced the latest installment in its Kung Fu Panda series. Read Full Post…
The following press releases and news reports about China companies were carried on April 28. To view a full article or story, click on the link next to the headline.
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Apple (Nasdaq: AAPL) Stumbles in China as Local Phone Makers Head Up-Market (English article)
ICBC (HKEx: 1398) Launches First Chinese Credit Cards in US with UnionPay (English article)
Alibaba-Disney (NYSE: DIS) Partnership Is Frozen in China After Just 5 Months (English article)
Movie Ticket Booking Platform Weiying Shidai Wins 3 Bln Yuan Series C+ Funding (English article)
Yintech (Nasdaq: YIN) Falls Flat in US Debut as Chinese Peers Seek De-listing (English article)
Bottom line: Alibaba’s new cloud tie-up shows that Korea is a primary market for its global expansion, while the new $4.5 billion funding for its Ant Financial affiliate could be followed by an IPO within the next 12 months.
Alibaba in Korea cloud initiative
E-commerce giant Alibaba (NYSE: BABA) is in a couple of major headlines today, led by word that its Ant Financial affiliate has just raised a whopping $4.5 billion in only its second-ever funding round. That particular story has been rippling through the headlines for a few weeks now, and is most notable because the deal is finally done and is triple the company’s original fund-raising target.
The other headline has Alibaba itself in a new deal to launch cloud computing services in South Korea, working in a partnership with a unit of local telecoms giant SK Telecom (Seoul: 017670). This particular deal is interesting because it represents Alibaba’s recent search for global growth stories, in a bid to satisfy investors worried about a slowdown in its home China market. Read Full Post…
The following press releases and news reports about China companies were carried on April 27. To view a full article or story, click on the link next to the headline.
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Bottom line: 58.com’s stock could be set for some upside in the second half of the year, as it returns to profitability after a well-executed acquisition spree that has sharply boosted its revenue growth.
58.com feasts on ads, acquisitions
Classified ads may not sound like the sexiest area of the Internet, but they’ve provided some strong growth for the acquisitive 58.com (NYSE: WUBA), which is fast emerging as a leader in the space and is often called the Craigslist of China. The company’s aggressive acquisition campaign has led to explosive revenue growth, but has also pushed the company into the loss column as it digests its many recent purchases.
That could present a good buying opportunity for investors with a longer term perspective, as 58.com looks set to return to the profit column and continue its strong revenue growth. If all goes according to plan, 58.com could end next year as China’s undisputed leader in the online advertising services realm. The company is already squarely ahead of the older 51job.com (Nasdaq: JOBS) and is on track to surpass current leader Zhaopin (Nasdaq: ZPIN), which both focus on online job recruiting. Read Full Post…
Bottom line: Ant Financial could raise more than $22 billion in a 2017 IPO if China’s Internet bubble remains intact for the next year, though there’s a 50-50 chance that bubble will burst and the company’s value will stagnate or even come down.
Ant Financial targets massive dual listing
Just a week after reports emerged that it was nearing one the biggest fundings of all time by a private Chinese company, a new report is saying that Alibaba-affiliated (NYSE: BABA) Ant Financial is on the cusp of formally closing a massive capital raising of more than $3.5 billion. Flush with all that cash from only its second funding round, the company is looking quite confident and saying it hopes to make the biggest IPO of all time on a Chinese domestic stock exchange.
Specifically, the latest report in the influential China Business Network says Ant hopes to eclipse the current record held by the 2010 IPO from Agricultural Bank of China (HKEx: 1288; Shanghai: 601288), one of China’s big 4 state-run lenders. Ant’s offering could come as soon as next year in a dual listing in China and Hong Kong, following the surprise disclosure that Ant would meet the strict profitability requirements for such a listing . Read Full Post…
Bottom line: Asos’ China retreat is due to the country’s extremely competitive e-commerce landscape, and shows that western retailers need to devote significant resources to succeed in the market.
Asos bows from China
In what looks like a first for a major western retailer, British fashion seller Asos (London: ASC) has officially pulled the plug on its China operations. Some might say that’s nothing new, since much bigger names like supermarket operator Tesco (London: TSCO) and electronics seller Best Buy (NYSE: BBY) have made similar moves in the last 5 years after failing to find a big enough audience among Chinese consumers.
But Asos is a different case, since it’s one of a growing number of western retailers that are choosing to come to China as a pure e-commerce plays, in a bid to save the huge costs involved with traditional stores and also take advantage of the nation’s online shopping craze. The problem is that China’s e-commerce craze has also attracted thousands of other retailers, and Asos couldn’t find a way to differentiate itself from the crowd. Read Full Post…
Bottom line: Alibaba’s new co-production deal with Paramount suggests the pair could soon form an equity alliance, following Paramount’s February announcement that it may sell a stake of itself to a strategic partner.
Alibaba Pictures invests in 2 Paramount films
The hyperactive Alibaba (NYSE: BABA) is in yet another major headline today, forming a tie-up to co-produce 2 of the most successful movie franchises from Hollywood giant Paramount. But what’s most intriguing about this latest deal is the timing, since it comes just over a month after Paramount announced it may be preparing to sell a stake of itself to a Chinese buyer.
Paramount announced that intent in late February, as part of a broader move by Hollywood to cash in on China’s booming box office that is the world’s second largest behind only the US. (previous post) Paramount and the other Hollywood studios also like the fact that Chinese buyers are often willing to pay big premiums for big-name brands, which should theoretically help to boost the stock prices of those foreign companies. Read Full Post…
Bottom line: Pony Ma’s big charitable donation reflects some restlessness with his Tencent empire, while Robin Li’s potential pursuit of the AC Milan soccer club reflects a recent interest by Chinese billionaires in sports club ownership.
Robin Li chasing AC Milan?
Two of China’s richest Internet entrepreneurs are in the headlines today for their personal spending, led by a huge gift from Tencent (HKEx: 700) chief Pony Ma as he follows many of his western peers into philanthropy. Meantime, Baidu (Nasdaq: BIDU) chief Robin Li may also be following several of his Chinese peers into the realm of sports team ownership, with word that he may be one of the leaders of a group aiming to buy Italian soccer club AC Milan.
Neither of these stories will have much impact on Tencent or Baidu, since both involve each companies’ founder engaging in personal interests. But they do provide some insight into the personalities of these multi-billionaires, who still make most or all of the major decisions about their companies. Read Full Post…
Bottom line: Beijing and local governments should move more aggressively to regulate O2O takeout dining services, and encourage consolidation around 2-3 players with the scale and resources to ensure the sector’s healthy development.
Ele.me gets big new funding from Alibaba, Ant
New signs of overheating emerged in China’s online takeout dining realm last week, as one of the nation’s top players and a smaller rival landed major new funds to fuel their money-losing operations. The pair of deals saw China’s two leading e-commerce companies, Alibaba (NYSE: BABA) and JD.com, collectively pump nearly $1.5 billion into new investments in the space, even as other major players like Tencent (HKEx: 700) and Baidu (Nasdaq: BIDU) are also beefing up their services.
The flood of new money has produced a rapidly escalating round of price wars, offering deals for consumers but creating chaos in the market and on the streets of major cities like Beijing and Shanghai. This kind of boom is quite typical for China’s emerging high-tech sectors, but in this case also poses unique challenges due to practical dangers such as threats to food and road safety. Read Full Post…
