The following press releases and media reports about Chinese companies were carried on December 2. To view a full article or story, click on the link next to the headline.
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Qihoo 360 (NYSE: QIHU) May Reach Buyout Deal Within Weeks – Source (Chinese article)
Manchester City Group Sells 13 Pct to Chinese Investors for $400 Mln (English article)
CMGE Seeks Relisting in China Months After Dropping From Nasdaq (English article)
Alibaba (NYSE: BABA Appoints Leaders to Run France, Germany Operations (Businesswire)
Fosun Pharma (Shanghai: 600196) Buys $65 Mln Stake in Online Health Firm Guahao (English article)
Bottom line: Beijing should eliminate barriers that are slowing the flow of private money into lending services, in a move to offset a slowdown in lending from traditional banks that are dealing with a growing bad-loan crisis.
Obstacles hinder private lending growth
A flurry of headlines last week highlighted the recent move by private companies into China’s financial services market, led by reports that Apple(Nasdaq: AAPL) could become the first major foreign company to offer electronic payments in the country. At the same time, a chilly reception for a Hong Kong IPO by regional lender Qingdao Bank (HKEx: 3866) highlighted the difficulties many traditional Chinese banks now face due to concerns about a looming bad debt crisis.
Beijing regulators should be commended for their recent efforts to open up the financial services market to more private investment, but should consider accelerating the campaign by streamlining bureaucracy for big and well-financed domestic and foreign names like Apple and Tencent(HKEx: 700). It should also consider a similar streamlining of bureaucracy for foreign banks, many of which have left China off their global roadmaps due to stiff restrictions that make doing business difficult. Read Full Post…
Bottom line: New York has lost its appeal for listings by smaller Chinese Internet companies, but should remain attractive for sector leaders like Didi Kuaidi and Meituan-Dianping.
Chinese NY IPOs shrink sharply in 2015
China’s imminent resumption of IPOs after a 4-month pause seems like a good opportunity to review what’s shaping up as the year of the “reverse IPO” in New York by Chinese companies. Market watchers will know that I’m talking about this year’s record wave of privatization bids by US-listed Chinese firms, which saw around 3 dozen companies announce plans to de-list from New York during the year with an eye to re-listing back in China.
That’s not to say that no Chinese companies listed in New York this year, and I was able to track down at least 4 that made such offers. But those 4 collectively raised a paltry $200 million, or just a tiny fraction of the nearly $30 billion that Chinese companies raised in a record year for New York IPOs in 2014. Read Full Post…
Bottom line: Apple could become the first big foreign company to offer domestic electronic payment services in China, representing a major accomplishment for CEO Tim Cook in his recent campaign to improve relations with Beijing.
Apple Pay eyes February China launch
Big names like Visa (NYSE: V), MasterCard (NYSE: MA) and PayPal have been waiting for years to offer electronic payment services in China, but now it appears that tech titan Apple(Nasdaq: AAPL) may be the first to break into the lucrative market. That’s the signal coming from the latest headlines, which say that Apple is aiming to formally launch its Apple Pay electronic payments service in its second largest global market in the next few months.
If Apple succeeds, the move would represent a major victory for the company and vindication of CEO Tim Cook’s recent campaign to cultivate better relations with Beijing. Apple Pay would be entering the market less than 2 years after the product’s formal launch, which is extremely fast for bureaucratic China. By comparison, Visa, MasterCard and PayPal have all been waiting more than a decade for China to open the market, and the 2 credit card giants even led a campaign that resulted in a complaint at the WTO. Read Full Post…
The following press releases and media reports about Chinese companies were carried on November 28-30. To view a full article or story, click on the link next to the headline.
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China Mobile (HKEx: 941) in $5 Bln Deal to Consolidate TieTong Assets (English article)
Oddo Counters Fosun (HKEx: 565) with 760 Mln Euro Offer for BHF Kleinwort Benson (English article)
Alibaba-backed (NYSE: BABA) Evergrande Soccer Team to Raise Over $400 Mln (English article)
P2P Lending Site Lufax to List on HK Stock Exchange in 2016 – Source (English article)
58.com (NYSE: WUBA) Hopes to Get Financial Services License in 2 Year – CEO (Chinese article)
Bottom line: Uber’s 2016 China expansion plan looks aggressive but typical for the company, while Didi Kuaidi should invest its big cash pot on expansion and becoming profitable rather than unrelated services like O2O take-out dining.
Uber, Didi race towards 2016 with big investments
Private car service leaders Uber and Didi Kuaidi are both in the headlines as we race towards the end of 2015, a year that will go down as a watershed for this fast-rising sector both in China and globally. The first news comes from Uber, which is detailing an aggressive expansion plan for 2016 as China surpasses the US to become its largest global market. The second headline has Didi Kuaidi confirming a major new investment in online take-out dining site Ele.me, just days after separate reports said that e-commerce giant Alibaba(NYSE: BABA) also wants to invest in the company.
This year has certainly been a watershed for both Uber and Didi Kuadi in China, reflecting the rapid rise of their private car services that use location-based (LBS) GPS technology to challenge traditional taxi operators. Uber has said repeatedly that China is its top priority outside its home US market. Reflecting that position, Uber took the unusual step of spinning off its China unit into a separate company earlier this year, and also said it would spend $1 billion in 2015 to build up its service in the market. Read Full Post…
Bottom line: Alibaba’s spin-off of its C2C marketplace for second-hand goods could reflect a new trend for big Internet firms to separately run individual assets, while LeTV may have provided most of the money in the first funding round for its smartphone unit.
Taobao spins off Xianyu
A couple of fund-raising headlines are spotlighting emerging trends in China, including a nascent move by big companies to spin off smaller units as separately run and funded entities. That move was center stage in new reports that e-commerce juggernaut Alibaba(NYSE: BABA) is spinning off its Xianyu marketplace that specializes in sales of second-hand goods between consumers.
The second headline comes from online video high-flyer LeTV(Shenzhen: 300104), and spotlights a trend that shows rapidly cooling investor sentiment towards overheated sectors like video and smartphones. That news has LeTV declining to name any of the backers in the first funding round for its fledgling smartphone unit, hinting that no serious investors were interested in this particular opportunity that raised $530 million. Read Full Post…
Bottom line: A new landscape in China’s O2O restaurant services market is taking shape around the “big 3” firms of Alibaba, Baidu and Tencent, with a Tencent-backed Meituan-Dianping the most likely to succeed.
Alibaba eyes Ele.me stake
We’re seeing more signs of a major shuffle in the China market for online-to-offline (O2O) dining services, with e-commerce leader Alibaba(NYSE: BABA) at the center of 2 major new developments in the space. One would see Alibaba invest $1.5 billion for about a third of Ele.me, the leader in O2O takeout dining services. The other has media reporting that Alibaba is looking to sell its 7 percent stake in Meituan-Dianping, China’s recently formed leading group buying site that operates a rival takeout dining service.
The big driver behind both of these stories is a major consolidation taking place in the O2O marketplace, where money-losing companies are suddenly scrambling to find wealthy backers after being cut off by their more traditional funding sources. Many of those companies have found a receptive audience from China’s cash-rich “big 3” Internet titans of Alibaba, Tencent(HKEx: 700) and Baidu (Nasdaq: BIDU). Read Full Post…
Bottom line: Jack Ma is unlikely to tamper with content at the South China Morning Post if he buys a stake in the iconic Hong Kong newspaper, but instead will look for ways to leverage its content using more dynamic new media platforms.
Jack Ma eyes HK newspaper stake
A sketchily-sourced report from 2 weeks ago is suddenly getting major new credibility, with word that Alibaba(NYSE: BABA) founder Jack Ma is near a deal to take a major stake in Hong Kong’s SCMP Group (HKEx: 583), publisher of one of Asia’s oldest and most profitable English language newspapers. The biggest twist in the latest reports is that Ma himself and not Alibaba would invest in SCMP, owner of the South China Morning Post newspaper.
The earlier reports were based on a story citing vague rumors that Ma was in talks with the SCMP, leading me to say that such a move looked logical even if sourcing in the reports was quite shaky. (previous post) The newest report has far more solid sourcing and comes from the reputable Bloomberg, meaning the chances are high that a deal is really happening. Read Full Post…
The following press releases and media reports about Chinese companies were carried on November 24. To view a full article or story, click on the link next to the headline.
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Tuniu (Nasdaq: TOUR) Announces $500 Mln Investment from HNA Tourism (GlobeNewswire)
Alibaba (NYSE: BABA) to Invest $1.5 Bln in Takeout Delivery Platform Ele.me (English article)
Alibaba’s Jack Ma Said to Be in Discussions to Buy SCMP (HKEx: 583) Stake (English article)
Trina Solar (NYSE: TSL) Announces Q3 Results (PRNewswire)
Bank of Jinzhou Starts $943 Mln Hong Kong Initial Offering (English article)
Bottom line: Reports of a recent spat between Meituan and Alibaba are probably exaggerated, but do point to growing tensions that could ultimately prompt Alibaba to sell its small stake in Meituan.
Alibaba, Meituan clash in takeout dining
Everyone is trying to interpret whether a split is imminent between e-commerce leader Alibaba (NYSE: BABA) and leading group buying site Meituan, following a flurry of reports about a spat between the pair over the past few days. The situation is casting a spotlight on the massive web of cross-ownership relationships between many of China’s Internet companies, which is creating odd bedfellows and other conflicts as a wave of mega mergers has swept China’s Internet over the last 2 years.
In this case the conflicts are coming on 2 fronts. The larger of those is related to Meituan’s pending mega merger with archrival Dianping, in a deal announced last month. That union also brought together China’s 2 largest Internet companies in another odd partnership, since Meituan is partly owned by Alibaba and Dianping counts Tencent(HKEx: 700) as one of its largest investors. Read Full Post…
