Bottom line: The looming completion of buyouts for Qihoo 360 and Mindray Medical points to growing momentum for successful privatizations of other Chinese firms waiting to de-list from New York.
Qihoo, Mindray head back to China
Two of the largest in a wave of privatizations by US-listed Chinese firms have just taken big steps forward, with major new announcements from software security specialist Qihoo 360 (NYSE: QIHU) and medical device maker Mindray (NYSE: MR). One case has Qihoo announcing a formal date for a meeting where shareholders will vote on its plan to privatize the company. The other has Mindray announcing it has formally completed its own buyout plan, and has filed to have its shares de-listed from New York.
It’s quite significant that both of these plans are moving forward now, since China’s own stock markets where both Qihoo and Mindray hope to eventually re-list have been in a state of turmoil these days. That turmoil has seen the main Shanghai index tumble around 20 percent this year, and it’s quite possible that more turbulence lies ahead. Read Full Post…
The following press releases and media reports about Chinese companies were carried on November 25. To view a full article or story, click on the link next to the headline.
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Apple (Nasdaq: AAPL) Seeks to Launch Apple Pay in China by February – Sources (English article)
Unicom (HKEx: 763) Drafts Proposal to Share 4G Network with China Telecom – Reports (English article)
China’s HNA Agrees to Buy 24 Pct of Brazilian Airline Azul (English article)
LeTV (Shenzhen: 300104) Drops Listing Plan for Filmed Entertainment Unit (Chinese article)
Bottom line: Jiuxian’s decision to list in China and Dangdang’s continued effort to de-list from New York show that low-quality Chinese firms will have difficulty getting attention from US investors and are probably better listing in their home market.
Jiuxian wine cellar to list on China’s OTC
Two news items continue to show a growing distaste for New York by Chinese web firms, led by word that veteran online wine seller Jiuxian has just received approval for an IPO on China’s over-the-counter (OTC) board. The second items comes from veteran e-commerce site Dangdang (NYSE: DANG), whose outspoken CEO is quoted complaining about his company’s low valuation and saying his plans are moving forward to de-list from New York and re-list in China.
The most commonly heard theme to these stories is that Chinese firms can get better valuations in their home market than New York, because their names are more recognized in China. But another theme that gets far less attention is that many of these complaining companies are simply low-quality products whose only real attraction is their “made in China” label. Read Full Post…
Bottom line: Apple’s new drive to sell legal music, books and video in China stands a reasonably good chance of success, banking on consumers’ growing willingness to pay for such products if they are convenient and affordably priced.
iTunes comes to China
Following the record-breaking debut for its iPhone 6s models, tech giant Apple (Nasdaq: AAPL) is taking a big new risk by attempting something no one has done yet successfully: making profits from selling legal music and movies in China. The move was part of a newly announced major expansion of Apple’s online store in its second largest global market. But while Chinese consumers have shown a big willingness to pay huge premiums for iPhones, it’s far from clear they’ll do the same for movies and music that they can usually download for free.
Apple sold a record 13 million iPhone 6s models worldwide in their first weekend on sale, easily beating the previous record of 10 million for the iPhone 6 models. China was an important factor in achieving the new record, since the iPhone 6 wasn’t available here during the first weekend of its global launch due to technical reasons. Apple hasn’t given any individual country figures yet, but it’s probably safe to assume it sold at least 3 million of the new iPhones in China during their opening weekend. Read Full Post…
Bottom line: Mecox Lane’s privatization plan should succeed, but the company is likely to continue its decline even if it re-lists in China under its current lackluster management.
Mecox Lane gets buyout offer
The current privatization wave is giving me a chance to revisit some companies that I haven’t written about in quite a while such as former e-commerce superstar Mecox Lane (Nasdaq: MCOX), which has just become the latest name to receive a buyout offer. In a slightly surprising twist, Mecox Lane’s shares tanked after it made the announcement, losing more than 8 percent to close around 20 percent below the buyout offer price.
Mecox’s announcement is one of the smallest so far in terms of deal value, since the company only has a market value of about $40 million. That’s even less than the $63 million education specialist New Oriental (NYSE: EDU) will need to pay an unusual special dividend announced just a day earlier, in a move I interpreted as a signal that the company had no plans to join the exodus of Chinese companies from New York. (previous post) Read Full Post…
The following press releases and media reports about Chinese companies were carried on July 18-20. To view a full article or story, click on the link next to the headline.
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AAFA Calls For New, Transparent Anti-Counterfeit Moves from Alibaba (NYSE: BABA) (press release)
Investors Prepare to Sue Dangdang (NYSE: DANG) Over Low Buyout Offer Price (Chinese article)
Bottom line: New buyout bids for Dangdang and YY look opportunistic due to a recent sell-off in their shares, while Baixing.com could lead a new wave of domestic IPOs for Chinese Internet firms next year.
Dangdang gets buyout offer
A few lingering buyout offers for US-listed Chinese firms are trickling in after Thursday’s market rally in China, with e-commerce stalwart Dangdang (NYSE: DANG) and the newer social networking site YY (Nasdaq: YY) both announcing new privatization plans. These 2 announcements look quite opportunistic, as they come after a sell-off that has seen Dangdang and YY’s shares plunge over the last 2 weeks, but right after a major one-day China rally that spilled over into the US.
At the same time, online classifieds site Baixing.com is charting a path for the future, with word that it’s scrapping its variable interest entity (VIE) structure that is typically used for Chinese firms looking to list in New York. The company is reportedly making the move as it eyes a domestic Chinese listing instead, and also as it receives new funding from online search leader Baidu (Nasdaq: BIDU). Read Full Post…
The following press releases and media reports about Chinese companies were carried on July 10. To view a full article or story, click on the link next to the headline.
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Alibaba (NYSE: BABA) Says Entertainment Unit Executive Taken Into Custody (English article)
The following press releases and media reports about Chinese companies were carried on May 29. To view a full article or story, click on the link next to the headline.
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China’s Top Online Travel Agent Ctrip (Nasdaq: CTRP) Taken Offline By Hackers (English article)
BOC Hong Kong (HKEx: 2388) Said to Narrow Bids for $6.8 Bln Nanyang Bank (English article)
Alibaba’s (NYSE: BABA) Online Bank Secures Launch Approval (English article)
HK Securities Regulator Confirms Investigation of Hanergy (HKEx: 566) (Chinese article)
Bottom line: Dangdang’s growth is likely to slow rapidly over the next 2 years as it gets marginalized by larger rivals, putting pressure on its owners to sell the company before it sinks back into the red.
Dangdang posts strong profit growth
Investors were breathing a big sigh of relief after reading the latest quarterly results from Dangdang (NYSE: DANG), as an ongoing turnaround at the former e-commerce leader boosted both its top and bottom lines. The news erased concerns that sparked a sell-off just a couple of weeks earlier, after the company unexpectedly announced a last-minute delay in the release of earnings report for unspecified scheduling reasons.
While the Dangdang fears were ultimately unfounded, the same hasn’t been true for former online video high-flyer Youku Tudou (NYSE: YOKU). In that instance, Youku Tudou played a similar scheduling trick for the release of its earnings report around the same time, and ultimately served up gloomy results. It also disclosed it was being probed by the US securities regulator for aggressive accounting that may have been illegal. (previous post) Read Full Post…
The following press releases and media reports about Chinese companies were carried on April 1. To view a full article or story, click on the link next to the headline.
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China To Delay Bank Tech Restrictions, US Treasury Official Says (English article)
Merged Didi, Kuadi Taxi App Value Could Reach $8.75 Bln After New Stake Sale (Chinese article)
