Bottom line: Huawei’s aggressive H2 targets for its Honor sub-brand hint that sales for its core Huawei smartphones may be stumbling, while rumors of a wave of executive departures at Smartisan also hint at dire financial conditions at the company.
New distress signals are coming from China’s overheated smartphone sector in the form of headlines involving leader Huawei and smaller niche player Smartisan. Before I detail the headlines, I should note that some may disagree with my interpretation, since neither news item directly confirms any trouble. But that said, nobody ever wants to admit to bad news, and in both cases the headlines appear to confirm earlier signs of stress at each company. Read Full Post…
The following press releases and news reports about China companies were carried on July 14. To view a full article or story, click on the link next to the headline.
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China’s Wanda Buys Britain’s Odeon Cinema Group for $1.2 Bln (English article)
BYD (HKEx: 1211) Loses Bulk of $270 Mln Electric Bus Order in China (English article)
Huawei, Midea (Shenzhen: 000333) Team Up in Smart Home Devices (Chinese article)
Ku6 Media (Nasdaq: KUTV) Announces Completion of Merger (PRNewswire)
Aluminum Distributor Fubang Jingye to Buy Mobile Game Firms Crimoon, Skymoons (English article)
Bottom line: Huawei’s new lawsuits against Samsung in China and T-Mobile in the US are designed to show the company is now a major global player, and could also be preemptive to deflect attention from upcoming bad news.
China’s latest smartphones superstar Huawei is suddenly getting quite aggressive in the courtroom, with word the company has filed new lawsuits against global leader Samsung (Seoul: 005930) and US wireless carrier T-Mobile (Nasdsaq: TMUS). Those reports are coming as new data show that Huawei boosted its position as China’s leading smartphone brand with 17.3 percent of the market in the second quarter. (English article) Huawei’s sales surge continues an ongoing trend, though the sudden courtroom aggression is relatively new for the company, which was more used to getting sued in the past than suing other companies over patent violations. Read Full Post…
The following press releases and news reports about China companies were carried on July 8. To view a full article or story, click on the link next to the headline.
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McDonald’s (NYSE: MCD) Said to Narrow Bids for $2 Bln China Rights (English article)
Huawei files with Second China Court in Samsung (Seoul: 005930) Patent Suit (English article)
Qihoo 360 (NYSE: QIHU) Gets $3 Bln Loan to Support Privatization (Chinese article)
HNA, Li Ka-shing Firm Short-Listed for CIT Plane Leasing Unit Sale: Sources (English article)
The following press releases and news reports about China companies were carried on July 7. To view a full article or story, click on the link next to the headline.
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Apple (Nasdaq: AAPL) Drops to Fifth in China’s Mobile Market as Locals Rise (English article)
Huawei Files US Patent Lawsuit Against T-Mobile (Nasdaq: TMUS) (Chinese article)
SAIC, Alibaba (NYSE: BABA) to Mark Chinese Foray Into Connected Cars With SUV (English article)
Canadian Solar (Nasdaq: CSIQ) Sells Solar Power Projects in China (PRNewswire)
China Resources Beer (HKEx: 291) Plans $1.2 Bln Rights Issue to Buy SABMiller’s JV Stake (English article)
Bottom line: Washington’s 2 month extension of a temporary license for ZTE to keep buying from its US suppliers indicates a final ruling is likely by year end in a similar probe against Huawei for illegally selling US products to Iran.
After a tense period earlier this year when it appeared it could lose access to some of its key suppliers, telecoms equipment maker ZTE (HKEx: 763; Shenzhen: 000063) has been given continued access to those suppliers under a new extension of its earlier deal with Washington. The clash stemmed from a Washington ruling that ZTE sold US-manufactured telecoms equipment to Iran in violation of trade restrictions. Washington was set to punish ZTE by cutting it off from its many US suppliers, but later relented after the Chinese company agreed to cooperate with an investigation into the matter. Read Full Post…
Bottom line: Reports of big sales target reductions could point to a looming slowdown for Huawei, as it tries to move out of low-end smartphones and into an increasingly saturated higher end of the market.
After posting phenomenal growth over the last year to become the world’s third biggest smartphone brand, China’s Huawei may be seeing a slowdown that’s reportedly prompting it to sharply cut its sales targets for this year. If the reports are true, the downward revision would mark a sudden reversal for Huawei, which has been posting sales growth in the 50-60 percent range since the middle of last year when its recent surge began. Such a shift would hardly be unprecedented in the fast-changing smartphone world, though it would come as a slight surprise since the company’s phones have become quite popular here in China, approaching the status of global superstar Apple (Nasdaq: AAPL). Read Full Post…
The following press releases and news reports about China companies were carried on June 24. To view a full article or story, click on the link next to the headline.
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MIIT to Forbid Non-telcos from Providing Free Enterprise Voice Calling – Reports (English article)
Sanpower Group Enters Bidding for McDonald’s (NYSE: MCD) China Stores (Chinese article)
Qunar (Nasdaq: QUNR) Announces Receipt of “Going Private” Proposal (GlobeNewswire)
Mango TV Raises 1.5 Bln Yuan in Second Funding Round, Valuation Doubles (Chinese article)
Huawei Lowers 2016 Smartphone Target by 20 Mln Units – Report (Chinese article)
Bottom line: Reluctance to transfer its technology killed CRI’s breakthrough deal to build the first US high-speed rail line, showing that emerging Chinese tech leaders must be more open to such transfers if they hope to succeed globally.
The story that has seen China’s rapid modernization using western technology took an unusual twist last week, when a US firm aiming to build America’s first high-speed rail line abruptly canceled its tie-up with a Chinese partner over technology transfer issues. The US builder of the line connecting Los Angeles and Las Vegas was quite direct, blaming its decision on Washington’s condition requiring that rail cars for the project be locally manufactured. Read Full Post…
Bottom line: Micromax’s plan to sell smartphones in China is likely to sputter due to intense competition, while Huawei stands a 50-60 percent chance of becoming one of the world’s top 2 smartphone brands by 2020.
It seems the smartphone road connecting China and India isn’t just one-way, with word that leading Indian brand Micromax is planning to enter the intensely cut-throat Chinese market. Meantime, Chinese leader Huawei is looking beyond its home market and to the rest of the globe, with its brash smartphone chief declaring his target of passing Apple(Nasdaq: AAPL) and Samsung (Seoul: 005930) to take the world’s smartphone crown within 5 years. Read Full Post…
The following press releases and news reports about China companies were carried on June 4-6. To view a full article or story, click on the link next to the headline.
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Accor Gains After Report That Jin Jiang (HKEx: 2006) Aims to Increase Stake (English article)
China’s HNA Group Eyes South American Airline Groups Avianca – Sources (English article)
SoftBank Proceeds From Alibaba (NYSE: BABA) Selldown Rise to $10 Bln (English article)
Huawei Aims to Pass Samsung, Apple in 5 Years to Become Top Smartphone Brand (Chinese article)
Indian Smartphone Maker Micromax Plans to Enter China Next Year (Chinese article)