Bottom line: The see-saw performance of iDreamSky shares after its buyout offer reflects a growing number of speculators in the market for US-listed China shares, while Legend’s Hong Kong IPO is likely to price and debut weakly.
iDreamSky gets buyout offer
As we head into the end of June, the first half of 2015 is set to set an unusual record of becoming the first such period to see a negative number of New York IPOs by Chinese companies. That fact is being driven by a record number of companies that have announced privatization plans, including the latest by mobile game developer iDreamSky (Nasdaq: DSKY). If this latest plan is successful, iDreamSky would also set a new record for shortest time ever as a New York-listed Chinese firm, since the company only made its IPO last August.
Meantime, one actual IPO that is moving forward is coming in Hong Kong, where Legend Holdings, parent of PC giant Lenovo (HKEx: 992), has set a price range, date and chosen a ticker for its offering. This particular deal appears to be getting a ho-hum reception in Hong Kong, as most investors remain fixated on a rally across the Chinese border that has seen China’s domestic stock markets more than double over the last year. Read Full Post…
The following press releases and media reports about Chinese companies were carried on June 16. To view a full article or story, click on the link next to the headline.
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Didi Kuaidi Seeks $1.5 Bln in Funding to Fend Off Uber – Source (Chinese article)
Alibaba (NYSE: BABA) Plans to Roll Out Paid Video Service (Chinese article)
Lawson Plans To Triple China Convenience Store Count to 1,000 in 2-3 Years (Chinese article)
iDreamSky (Nasdaq: DSKY) Receives Proposal to Acquire the Company (GlobeNewswire)
Cisco (Nasdaq: CSCO) Plans to Lay Offs Several High-Level China Executives (Chinese article)
The following press releases and media reports about Chinese companies were carried on June 12. To view a full article or story, click on the link next to the headline.
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Homeinns (Nasdaq: HMIN) Announces Receipt of “Going Private” Proposal (PRNewswire)
Integrated Silicon (Nasdaq: ISSI) Agrees To Be Bought By China’s Uphill (English article)
Xiaomi Invested 1.8 Bln Yuan in its Content Business Since November 2014 (English article)
Qualcomm (Nasdaq: QCOM) Greater China President Resigns for Job at Xiaomi (Chinese article)
Alibaba (NYSE: BABA) Chief Jack Ma Says No Plans to Buy Yahoo, eBay (Chinese article)
Bottom line: The ongoing privatization wave of Chinese firms abandoning New York listings is likely at or near a peak, with gaming and solar companies as some of the likeliest candidates to make new announcements.
E-House heads for exit door
The exodus from New York by neglected Chinese companies marches on this week, with online real estate company E-House (NYSE: EJ) becoming the latest to receive a management-led buyout offer. At the same time, online dating site Jiayuan (Nasdaq: DATE) has announced that a suitor who made a similar offer for the company in March has sharply raised its bid, following complaints that the original offer grossly undervalued the company.
When the history books are written, the second quarter of 2015 could well go down as the height of a wave of privatization bids for New York-listed Chinese firms, whose shares have languished in the last few years due to lack of interest from US investors. At the same time, many of those companies are casting an envious eye on China’s rallying stock markets, and are almost certainly hoping to re-list at home in the future. Read Full Post…
Bottom line: China’s securities regulator should work with overseas-listed Chinese firms to chart a well-defined path for them to return home to list, to encourage such movement and avoid burdensome bureaucracy.
Chinese “turtles” return home to list
A growing trend that is seeing Chinese firms abandon US listings to return home gained big momentum last week, when 2 more companies announced plans to de-list from New York and a third that privatized 2 years ago moved close to a China re-listing.
In the first category, medical devices maker Mindray Medical (NYSE: MR) announced a management led buy-out offer late in the week, which was followed a day later by a similar offer for solar panel maker JA Solar (Nasdaq: JASO). Meantime, formerly New York-listed outdoor advertising specialist Focus Media took a major step toward becoming the first Chinese company to re-list at home by injecting itself to an existing Shenzhen-traded company. Read Full Post…
Bottom line: Alibaba’s new hiring of a Washington insider to head its international government affairs reflects its attempts to look more global, and also an intense lobbying campaign to ensure its name stays off an annual US piracy list.
Alibaba bulks up in Washington
E-commerce giant Alibaba (NYSE: BABA) has just made a major new addition to its Washington lobbying team, as it gears up for what’s likely to become one of its biggest battles yet on Capitol Hill. That battle will see the company try to convince the Obama administration that it’s a strong partner in the battle against piracy, as it tries to stay off an annual list published by Washington that singles out major internet sites that don’t do enough to stamp out counterfeiting.
Alibaba’s new hire of former GE Capital executive Eric Pelletier to head its international government affairs is also part of its attempts to look more global by adding big-powered non-Chinese to its top management ranks. The move parallels similar hires by equally globally-minded companies including networking equipment giant Huawei and leading PC maker Lenovo (HKEx: 992), which are also trying to convince the world that they’re truly global players and not just Chinese companies. Read Full Post…
Bottom line: The sale of new shares at a discount by Alibaba Pictures and Kingsoft reflects growing competition for funds in Hong Kong, while Mindray is likely to seek a China re-listing following its privatization from New York.
Kingsoft in fund-raising plan
A flurry of fund-raising activity on China’s periphery is in the headlines as we end the week, led by 2 separate plans by Alibaba’s (NYSE: BABA) film unit and software maker Kingsoft (HKEx: 3888) to raise a combined $2 billion. At the same time, medical device maker Mindray (NYSE: MR) has become the latest in a recent string of companies to receive buy-out offers, following years of lackluster performance for its New York-listed shares.
The underlying theme to these 3 stories is a huge stock market rally in China itself, which has seen the benchmark Shanghai index more than double over the last year. That rally is making companies like Mindray envious, prompting many to de-list from New York and target re-listings at home. At the same time, the China effect is also spilling over into adjacent Hong Kong, making it much easier for Chinese companies listed there to also raise new cash. Read Full Post…
Bottom line: Alibaba’s potential new venture to bring Japanese imports to China looks like a smart move that plays to Beijing’s desire to boost consumer spending, and could serve as a template for similar import-related tie-ups.
Alibaba talks tie-up with Yahoo Japan
A potential major new tie-up between Alibaba (NYSE: BABA) and Yahoo Japan (Tokyo: 4689) aimed at bringing more Japanese imports to China looks full of promise, providing a possible major new growth source for the Chinese e-commerce giant. Such a tie-up would be especially exciting because it would bring together 2 of the largest e-commerce companies from the world’s second and third largest economies. It would also receive strong support from Beijing, which is rapidly dismantling many import barriers as it tries to boost consumer spending to prop up a slowing Chinese economy. Read Full Post…
Bottom line: Alibaba’s new tie-up with SMG could produce a homegrown financial news and information giant drawing on both companies’ strengths, but could also face obstacles due to the 2 partners’ differing backgrounds and styles.
Alibaba buys into SMG financial newspaper
E-commerce titan Alibaba (NYSE: BABA) is taking an interesting new step into the news media realm, with word that it’s investing 1.2 billion yuan ($200 million) in one of China’s leading financial newspapers that is owned by Shanghai Media Group (SMG), the country’s second largest state-owned media company. I’ve watched for the last couple of years as traditional newspapers like SMG’s China Business News, or CBN, have struggled to chart a new path in the digital media age.
For many of these traditional media, that movement has meant putting their content online, and launching a mobile app, but not much more. As a result, many are seeing their revenue shrink as advertisers flock to more dynamic new media, mirroring a trend in the west. In that light, this new Alibaba tie-up could breathe some new life into CBN’s new media push, providing new ideas and other expertise to reverse the newspaper’s decline.
Bottom line: Uber should consider forming closer alliances with local city governments to boost its chances of survival in China.
By Jeffrey Towson
Uber struggles in China
Hired car services giant Uber is now in the situation you never want to be in in China: a foreign company on the wrong side of both the government and powerful local competitors. Ask Google (Nasdaq: GOOG) and Yahoo (Nasdaq: YHOO) how that worked out. However, Uber can still win in China. They have one last move that could reverse the situation. They can do what homegrown rivals Kuaidi and Didi won’t. They can ignore the advice of Alibaba (NYSE: BABA) Chairman Jack Ma and marry the government.
Ma has famously said “Never, ever do business with government. Love them. Don’t marry them. So, we never do projects for government.” Compare this to statements by Kuaidi’s CEO Joe Lee, who said “One thing we learned is if we want to grow fast, we need to make sure the government supports us. Because in China, they can stop you in one day — they shut down your server and you’re out.” Read Full Post…
The following press releases and media reports about Chinese companies were carried on June 4. To view a full article or story, click on the link next to the headline.
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Alibaba (NYSE: BABA) To Invest 1.2 Bln Yuan In Financial Newspaper CBN (Chinese article)
BYD (HKEx: 1211) To Raise Up To 15 Bln Yuan Through New A-Share Issue (HKEx announcement)
LeTV (Shenzhen: 300104) to Invest HK$6 Bln in Hong Kong TV Market (English article)
Ctrip (Nasdaq: CTRP) Says No Longer Wants M&A With Qunar (Nasdaq: QUNR) (PRNewswire)
European Business Lobby Slams China’s Draft National Security Law (English article)
