Bottom line: The delay in Netflix’s plans to enter China this year may be due to lobbying from domestic online video companies, and it could be several more years before it gets permission to form a China venture.
China absent in major Netflix expansion
Shareholders of US entertainment giant Netflix (Nasdaq: NFLX) will be disappointed to learn that China wasn’t included on the company’s global road map, as it announced a major expansion for its signature online video service. Many believed that an entry to China could come as early as this year, after media reported last spring that Netflix was in talks to set up a Chinese online video joint venture with Wasu Media (Shenzhen: 000156), which is backed by e-commerce giant Alibaba (NYSE: BABA).
But the road into China was never going to be easy for any foreign online video company, due to Beijing’s heavy censorship of the Internet and also its inherent bias against big foreign companies. All that said, Netflix isn’t exactly writing off China completely either, but is simply saying its road into the market may take longer than it previously hoped. Read Full Post…
The following press releases and media reports about Chinese companies were carried on January 7. To view a full article or story, click on the link next to the headline.
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Alibaba (NYSE: BABA) CEO Outlines His 2016 Expansion Strategy (English article)
Netflix (Nasdaq: NFLX) Now Live in Almost All countries, Skips China (English article)
China Huawei’s 2015 Smartphone Shipments Jump 44 Pct, Cross 100 mln (English article)
Sogou’s 2015 Revenue to Reach $600 Mln – CEO (English article)
Jin Jiang (HKEx: 2006) Reaches Initial Framework Agreement to Buy Vienna Hotels (Chinese article)
Bottom line: Alibaba’s shares and Ant Financial’s new fund-raising plans will come under pressure if China’s stock markets enter a new correction, a possibility that looks high in the current environment.
China sell-off pressures Alibaba shares
E-commerce giant Alibaba (NYSE: BABA) is facing several new challenges as we head into 2016, led by a big drop in its stock on the first trading day of the year after China’s domestic stock markets plunged 7 percent. The 5.6 percent drop in Alibaba’s stock in New York on Monday wiped out around $10 billion in market value, as investors worried that US-listed Chinese stocks could get infected by a potential a new correction on China’s stock markets.
In separate headlines, Alibaba-affiliated Ant Financial is reportedly back in the market to raise at least $1.5 billion, in the run-up to a potential IPO as soon as later this year. That figure looks quite large, and I’ve previously said we’re unlikely to see many private fund-raising rounds of that size this year. But the figure is actually down quite a bit from Ant’s only other fund raising last July, reflecting growing caution from investors worried about China’s slowing economy. Read Full Post…
The following press releases and media reports about Chinese companies were carried on January 5. To view a full article or story, click on the link next to the headline.
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Alibaba’s (NYSE: BABA) Ant Financial Finance Arm Said to Seek at Least $1.5 Bln (English article)
New World (HKEx: 17) to Prepare Buyout Offer for $7 Billion China Unit – Source (English article)
Qunar (Nasdaq: QUNR) Names New CEO, CFO, COO (GlobeNewswire)
Smartphone Maker Meizu Cuts 5 Pct of Headcount to Boost Competitiveness (Chinese article)
Xiaomi Co-Founder Li Wanqiang Returns to Head Xiaomi Pictures Division (Chinese article)
Bottom line:Wanda’s decision to set up its sports division headquarters in Guangzhou is part of a diversification away from Beijing, and could presage an IPO for the unit in Hong Kong as early as next year.
Wanda sets up sports HQ in Guangzhou
A recent series of major sporting moves is back in the financial headlines as 2016 approaches, with word that real estate giant Wanda Group is setting up a new headquarters for its growing sports business in the southern city of Guangzhou. Those same reports hint at another major theme in the new year, which could see a new wave of IPOs for some of these big new sporting investments by names like Wanda.
Sporting investments have become a major theme in the current year, reflecting a sudden desire for content and related services to feed China’s fast-growing entertainment sector. E-commerce giant Alibaba (NYSE: BABA) kicked off the wave last year with its investment in a domestic soccer club, and has been joined this year by a wide range of companies that includes Wanda, electronics retailer Suning (Shenzhen: 002024) and online video operator LeTV (Shenzhen: 300104). Read Full Post…
The following press releases and media reports about Chinese companies were carried on December 30. To view a full article or story, click on the link next to the headline.
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Baidu (Nasdaq: BIDU) Takeout Delivery Seeks $300-500 Mln in Funding – Sources (English article)
European Chamber Says Still Has Concerns on China Anti-Terror Law (English article)
Bottom line: Alibaba is placing its take-out dining service bets on Ele.me with its new $1.25 billion investment, and will spend other major resources next year to try to clean up its sites of trafficking in fake goods.
Alibaba invests in Ele.me
E-commerce juggernaut Alibaba (NYSE: BABA) is back in the M&A market, gobbling up a headline-grabbing 28 percent of leading online-to-offline (O2O) take-out dining service Ele.me for a tidy $1.25 billion. Alibaba has yet to confirm the deal, which would become the latest in a growing string of investments worth $1 billion or more for the company. A deal of this size would have been major news just 3 years ago before a wave of M&A began sweeping China’s Internet, though now such transactions have become far more common.
Meantime, Alibaba is in another set of headlines in its battle against piracy, with word that it’s adding 200 people to the team charged with ridding its huge online marketplaces of trafficking in pirated goods. This particular move comes less than 2 weeks after Alibaba managed to avoid seeing its name reappear in an annual US list of the world’s most notorious marketplaces for trafficking in pirated goods. Having dodged that bullet, Alibaba is now showing it plans to get far more serious in tackling the problem next year. Read Full Post…
The following press releases and media reports about Chinese companies were carried on December 26-28. To view a full article or story, click on the link next to the headline.
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Alibaba (NYSE: BABA) Invests $1.25 Bln in Ele.me, Becomes Largest Stakeholder (Chinese article)
Bottom line: Apple should put out a short statement to answer online chatter that its new China headquarters looks like an older software park in Shandong, while Alibaba’s latest high-profile hire is its own move to tackle piracy on its sites.
Alibaba prioritizes piracy in 2016
A trio of piracy-related stories are in the headlines as we head into year-end, reflecting the recent focus that Beijing has put on an issue that is likely to get big attention in 2016. Leading the news are online observations by some web surfers that Apple’s (Nasdaq: AAPL) new China headquarters building bears a striking resemblance to a much older software park in northeastern Shandong province.
Next there’s the announcement of a major new anti-piracy hire by e-commerce juggernaut Alibaba (NYSE: BABA), which dodged a bullet last week by keeping its name off an annual US list naming the world’s most notorious markets for pirated goods. Alibaba’s new announcement has seen it name a former top Apple investigator to lead a renewed campaign to rid its online marketplaces of trafficking in pirated goods. Read Full Post…
Bottom line: China’s global Internet conference this week was mostly empty pageantry, but it did reveal that Baidu might like to privatize from New York one day, and attracted a handful of China-friendly global executives.
Wuzhen Internet pow-wow mostly empty talk
China’s big Internet pow-wow this week in the picturesque town of Wuzhen hasn’t produced much news despite its big aspirations, reflecting Beijing’s tight control over cyberspace and companies that do business there. But the globally-minded event did produce at least one interesting tidbit on the recent privatization wave by US-listed Chinese companies, and also an entertaining photo of 2 top executives that went viral online.
The news item came from Robin Li, founder of leading Chinese search engine Baidu (Nasdaq: BIDU), who hinted that he hopes to someday join the recent wave of Chinese companies now privatizing from New York due to undervaluation. The photo that went viral captured a humorous moment involving a catnap during the conference by Zhou Hongyi, the controversial and more often outspoken CEO of security software specialist Qihoo 360 (NYSE: QIHU). Read Full Post…
Bottom line: Suning’s move into sports is aimed at providing content for its PPTV online video service, but is also the latest in a string of wide-ranging investments that reflect a company with an identity crisis.
Suning invests in soccer
Sports teams are becoming flavor of the day for Chinese firms with entertainment aspirations, with word that retailing giant Suning (Shenzhen: 002024) has joined the bandwagon via a new investment in a local soccer club. The company’s latest deal will see it invest 523 million yuan ($80 million) in the Jiangsu Sainty Football Club, which like many other professional Chinese sports teams is struggling financially.
Suning’s interest in soccer is probably related to its 2013 purchase of PPTV, a relatively large player in China’s crowded online video space. The Suning-PPTV tie-up left many people puzzled at thee time of that announcement, since the 2 companies have little in common. But Suning has been aggressively promoting the service in its trademark consumer electronics stores, and in August it announced a plan to invest 1 billion yuan into a campaign to sell smart TVs equipped with PPTV’s online video service. Read Full Post…
