Bottom line: China is positioned to become a global leader in development of open platforms as an Internet business model, but regulators should take a more active role in overseeing these marketplaces.
Ctrip joins open platform rush
China is quickly becoming a global leader in a type of online business that uses an open platform model at its core, with travel stalwart Ctrip (Nasdaq: CTRP) becoming the latest entrant into the space after years of operating a more traditional closed platform service. While traditional closed platforms see website operators sell products directly to consumers, open platforms let operators simply manage online marketplaces where consumers can shop for products from a wide range of third-party merchants. Read Full Post…
The following press releases and media reports about Chinese companies were carried on December 20-22. To view a full article or story, click on the link next to the headline.
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China’s Fosun (HKEx: 656) Raises Offer For Club Med (Paris: CU) (English article)
Waldorf Buyer Anbang Invests In Property, Banking Stakes (English article)
China Mobile (HKEx: 941) Targets 250 Mln 4G Users By End Of 2015 (Chinese article)
BYD (HKEx: 1211) Stock Rebounds, Confirms Buffett Hasn’t Sold Down Stake (Chinese article)
Ctrip (Nasdaq: CTRP) Launches Open Platform For Travel Agents (Chinese article)
The following press releases and media reports about Chinese companies were carried on December 16. To view a full article or story, click on the link next to the headline.
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Qihoo (NYSE: QIHU) Set To Buy Smartphone Maker For 5 Bln Yuan – Source (Chinese article)
Xiaomi Makes 1.266 Bln Yuan Investment In Midea (Shenzhen: 000333) (Chinese article)
Tuniu (Nasdaq: TOUR) Wins $148 Mln From Hony, JD.com, Ctrip (Chinese article)
China Unicom (HKEx: 762) Drops to Eight-Month Low As Manager Probed (English article)
Childcare E-commerce Site ‘Miyabaobei’ Secures $60 Mln Series C Funding (English article)
The following press releases and media reports about Chinese companies were carried on December 13-15. To view a full article or story, click on the link next to the headline.
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Tesla’s (Nasdaq: TSLA) China President Resigns After Less Than 9 Months (English article)
BAIC Motor, Investors Said Poised To Raise $1.4 Bln In IPO (English article)
Tencent-Backed (HKEx: 700) Private Bank Approved To Begin Business (Chinese article)
Xiaomi Issues Statement Confirming Sales Suspension In India (Chinese article)
Ctrip To Spend $15 Mln To Boost 3 Pct Stake In Tuniu (Nasdaq: TOUR) – Source (Chinese article)
Bottom line: Qunar’s ballooning losses reflect its aggressive spending on market share, which will turn off investors and pressure its stock until it shows signs of moving towards profitability.
Qunar losses swell past revenues
My third-quarter Chinese earnings season officially ends today with the newly issued results of online travel agent Qunar (Nasdaq: QUNR), whose losses appear to be spiraling out of control. Frankly speaking, I could never really understand why investors were so attracted to this company, whose main asset seems to be its association with leading Chinese search engine Baidu (Nasdaq: BIDU), which also happens to be Qunar’s majority stakeholder. Read Full Post…
Bottom line: Ctrip’s explanation for a recent major share sale by top executives looks reasonable and shouldn’t be cause for concern, while Tuniu won’t gain any short-term advantage from its new war with Tongcheng.
Ctrip execs invest in cruising
A couple of news bits are cruising through the online travel space this first week, with industry leader Ctrip (Nasdaq: CTRP) and recently listed Tuniu (Nasdaq: TOUR) both engaged in new strategic moves. In the former case, Ctrip is explaining a recent wave of selling of its shares by top company executives, saying the move was prompted by their need for cash for a new strategic investment. The latter case has Tuniu reportedly engaged in an entertaining behind-the-scenes battle with unlisted rival Tongcheng for the lucrative and fast-growing overseas travel market. Read Full Post…
The following press releases and media reports about Chinese companies were carried on November 29-December 1. To view a full article or story, click on the link next to the headline.
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Alibaba-Backed (NYSE: BABA) Momo Seeks Up To $232 Mln In Chat App IPO (English article)
Wanda Cinema Line Gets First-Round Regulatory Approval For China Listing (Chinese article)
Cosmetics Start-Up Hanhoo Gets 100 Mln Yuan-Plus Funding From Sequoia (Chinese article)
TPG Exits China Grand Auto Investment Via Haitong (HKEx: 665) Sale (English article)
Ctrip (Nasdaq: CTRP) Says Execs Sold Company Shares For Cruise Investment (Chinese article)
The following press releases and media reports about Chinese companies were carried on November 26. To view a full article or story, click on the link next to the headline.
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Tencent (HKEx: 700) To Air HBO In China As Govt Shuts Down Free Sites (English article)
Bottom line: Qunar could experience some short-term loss of business due to the withdrawal of Home Inns properties from its site, and its open platform business model makes it prone to such problems.
Home Inns checks out of Qunar lodge
Signs of turmoil are coming from the lodge operated by Qunar (Nasdaq: QUNR), with word that the online travel agent has just lost a major customer with the abrupt departure of leading budget hotel chain Home Inns (Nasdaq: HMIN). The departure of such a major customer, if true, would mark a big blow to Qunar, which had a recent similar break-up with chief rival Ctrip (Nasdaq: CTRP). Home Inns’ decision is motivated by different reasons than Ctrip’s, which I’ll explain shortly. But the 2 spats highlight the fact that Qunar’s business model, which centers on an open platform for third-party travel agents, is far more prone to problems than traditional travel sites that directly sell products like hotel rooms and air tickets to consumers. Read Full Post…
The headlines are buzzing today with news about newly listed Alibaba (NYSE: BABA), led by word that the e-commerce giant may explore an electronic payments tie-up with global gadget leader Apple (Nasdaq: AAPL). I’ll be quite frank and say that such a tie-up would seem destined for disaster, based on the previous experience between Alibaba and Yahoo (Nasdaq: YHOO), its only other major partner in a similar past tie-up.
Meantime, Alibaba has also announced a spin-off of its fledgling online travel business, posing the interesting possibility of some major acquisitions as it tries to quickly expand the unit and also presenting a challenge to sector leaders Ctrip (Nasdaq: CTRP) and Qunar (Nasdaq: QUNR). Lastly there’s the largely technical news bit that Alibaba’s stock broke through the $100 mark for the first time in the latest trading session, putting it nearly 50 percent above its IPO price, as investors eagerly await the company’s maiden earnings report set for next Tuesday. (earnings calendar) Read Full Post…
Wanda Group is already one of China’s leading commercial property owners, and now it’s taking aim at the fast-growing travel sector with word that it’s purchased a major travel agency in affluent Zhejiang province. There’s no financial detail on the deal, but the purchase should help to bolster Wanda’s position that has already made it China’s leading travel company just 2 years after its formation. The group could ultimately become one of China’s leading integrated travel and leisure companies if it eventually lists, providing an attractive alternative to the crowded field of publicly listed firms like online travel agent Ctrip (Nasdaq: CTRP) and leading hotel operator Home Inns (Nasdaq: HMIN). Read Full Post…
