It’s summertime and that means the short selling sharks have come out in search of new prey, making fresh attacks on PC giant Lenovo (HKEx: 992) and real estate braggart Evergrande (HKEx: 3333) in a bid to capitalize on lingering investor doubts about Chinese companies’ accounting practices. Both companies saw their shares tumble late last week after negative reports came out, with Lenovo shares shedding 11 percent while Evergrande fell as much as 18 percent.
Tag Archives: Lenovo
News Digest: June 23-25, 2012 报摘： 2012年6月23-25日
The following press releases and media reports about Chinese companies were carried on June 23-25. To view a full article or story, click on the link next to the headline.
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◙ China Telecom Equipment Firms May Be Subsidized: US Lawmaker (English article)
◙ Evergrande (HKEx: 3333) Refutes Short-Seller Attack by Citron (PRNewswire)
◙ Canadian Solar (Nasdaq: CSIQ), SkyPower Close Landmark Purchase, Launch Int’l JV (PRNewswire)
◙ Lenovo (HKEx: 992) Denies Downward Forecast Report, Says to Outgrow PC Market (HKEx announcement)
◙ UPS (NYSE: UPS), FedEx (NYSE: FDX) Get Courier Licenses, to Boost Domestic Routes (Chinese article)
◙ China PICC Gets Hong Kong Exchange Nod For Up to $3 Billion IPO: Source (English article)
News Digest: June 19, 2012 报摘： 2012年6月19日
The following press releases and media reports about Chinese companies were carried on June 19. To view a full article or story, click on the link next to the headline.
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◙ Solar Boom Heads to Japan Creating $9.6 Billion Market (English article)
◙ Japan’s Rakuten (Tokyo: 4755) Considers Return to China (Chinese article)
◙ China Mobile (NYSE: 941) to Receive Fixed-Line Network License – Source (English article)
◙ Lenovo (HKEx: 992) Parent Legend Holdings to List by 2016 – New Chief Executive (Chinese article)
◙ China Finance Online (Nasdaq: JRJC), Baidu (Nasdaq: BIDU) Pair on Mobile Web App (PRNewswire)
News Digest: June 16-18, 2012 报摘： 2012年6月16-18日
The following press releases and media reports about Chinese companies were carried on June 16-18. To view a full article or story, click on the link next to the headline.
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◙ Burger King Continues Aggressive Global Expansion with Accelerated Growth in China (Businesswire)
◙ Tencent (HKEx: 700) Vice President, Soso General Manager Resign – Source (English article)
◙ Agricultural Bank of China (HKEx: 1288) Received License to Operate NY Branch (Businesswire)
◙ Silverlake, TPG, Primavera Line Up On AsiaInfo (Nasdaq: ASIA) – Sources (English article)
◙ Deloitte Exec: Lenovo’s (HKEx: 992) IBM PC Purchase Didn’t Really Succeed (Chinese article)
Lenovo: China’s Newest Telco? 联想涉足电信服务
I’ll admit that I don’t always have the kindest words for PC giant Lenovo (HKEx: 992), which too often to me looks like a follower rather than a leader, even as it tries to steal the global PC crown from Hewlett-Packard (NYSE: HPQ) in what would certainly be a huge accomplishment for a Chinese company. But that said, I’m happy to say that for once I’m quite intrigued by the latest news that Lenovo is charging into what looks like an unexplored territory for a PC company by teaming with an operator of cloud computing services to offer broadband services specifically linked to its new series of recently launched ThinkPad computers. (English article; Chinese article) The innovative deal, which has Lenovo pairing with a cloud services operator called Macheen, allows users of many new ThinkPad computers to surf the web in the US and most major Western European markets on a plan provided directly by Lenovo. Furthermore, the plan doesn’t require any long-term contracts, meaning users can access the service whenever they want for a flat fee of about $2 per half hour or $9 per day. This kind of model looks interesting to me, as it targets a group of more budget-conscious PC users who might want to occasionally surf the web on their portable computers but wouldn’t want to pay for a separate data plan from a regular mobile wireless carrier. By partnering with another company for the plan, Lenovo is essentially entering the telecoms services sector in a relatively risk-free way, as the telecoms company, in this case Macheen, will be taking most of the risk in terms of providing all mobile Internet services. At the same time, this partnership will allow Lenovo to gain some valuable experience in the telecoms services sector, which it could potentially use in future products including not only new PCs, but also in smartphones, gaming consoles and smart TVs — all areas that Lenovo has entered in the last couple of years and areas that could become important parts of its business in the years ahead. As far as I can see, the biggest risks to the plan lie in many of the usual places, namely in execution and product design. Lenovo isn’t exactly known for its innovative product designs, so if consumers could easily ignore this new product if the new broadband plans aren’t easy to activate and use, and if the ThinkPads themselves don’t integrate the software well. What’s more, it’s also unclear to me if the market is really very big for this kind of broadband mobile plan that appears to target budget-conscious consumers who might not want to sign up for more traditional 3G or 4G data plans. For all these reasons, I would probably only peg this new initiative’s chances of success at less than 50 percent. But regardless of how this individual plan works out, I still have to commend Lenovo for trying something innovative to promote and popularize its products as it chases its ultimate goal of becoming the world’s largest maker of computing devices. At the very least, the plan will also provide it with some experience in telecoms services, which could also become an important area for hardware makers in the future.
Bottom line: Lenovo’s move into telecoms services through a broadband product marks an important step towards more innovation, even though the actual initiative is likely to fail.
Related postings 相关文章:
◙ Lenovo Results: Second Time the Charm? 联想在日德的收购会重蹈覆辙？
◙ Lenovo’s TV Gamble: Failure Ahead? 联想电视赌注：未来会失败吗？
◙ NEC China Cellphones: New Lenovo Tie-Up? NEC计划重回中国手机市场 或与联想联姻
News Digest: June 12, 2012 报摘： 2012年6月12日
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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◙ Huawei, ZTE (HKEx: 763) Execs Sentenced to 10 Years for Corruption in Algeria (English article)
◙ 7 Days (NYSE: SVN) Announces Strategy Update and Share Repurchase Program (PRNewswire)
◙ Lenovo (HKEx: 992) Launches No-Contract Mobile Broadband Service (English article)
◙ NetEase (Nasdaq: NTES) Invests Over RMB 10 Mln in Mobile Literature Content (English article)
◙ Shanda Games (Nasdaq: GAME) Reports Q1 Unaudited Results (PRNewswire)
Lenovo Results: Second Time the Charm? 联想在日德的收购会重蹈覆辙？
Top Chinese PC maker Lenovo (HKEx: 992) has just announced some impressive results, saying recent acquisitions in Germany and Japan helped to lift its profit 60 percent in its latest fiscal quarter, as revenue rose an equally strong 54 percent. (Earnings announcement) But as a long-time China watcher, my first reaction is: I’ve seen this before, as the company’s results also got a quick boost back in 2006 after its ground-breaking purchase of IBM’s (NYSE: IBM) PC assets, which instantly gave its revenue a major boost with a large new global presence. But history watchers will also remember that honeymoon period was relatively short lived, and Lenovo later suffered big losses and launched a major reorganization after many of IBM’s former clients defected and it couldn’t efficiently run IBM’s overseas operations. So the question now becomes, are we going to see an encore performance of the IBM deal, which would see Lenovo’s fortunes rapidly fall and end with another reorganization; or will it learn from its previous IBM experience and this time do better, perhaps even achieving its goal of overtaking Hewlett-Packard (NYSE: HPQ) to become the world’s largest PC company? Before I gave my answer, let’s take a quick look at the big picture, starting with the latest acquisitions that saw Lenovo purchase German PC maker Medion and take over the PC operations of Japan’s NEC (Tokyo: 6701) last year. The US may have been a difficult labor market for Lenovo, but the challenges there will seem small compared to what it will face in Japan and Germany, the former due to its tradition of companies providing lifetime employment to workers and the latter due to its strong labor unions. Those kinds of labor issues were largely behind the failure of TCL’s (HKEx: 1070) purchase of a French TV maker and the purchase of Siemens’ (Frankfurt; SIEGn) cellphone assets by Taiwan’s BenQ nearly a decade ago. Lenovo was a little smarter this time in Japan, taking over NEC’s PC operations through a joint venture rather than an outright purchase, meaning NEC will remain as a partner to help to run the operation. But TCL also tried the joint venture approach with France’s Thomson, and clearly that didn’t work. In terms of customer defections, I would also expect those to start happening soon. In this case, the defections could be even worse, since Japanese and German consumers and businesses are especially quality conscious, and are unlikely to like the idea that they are buying computers from a Chinese company instead of a German or Japanese one. All that said, look for both of these acquisitions to run into problems, with labor issues likely to flare up in the next year and customer defections to accelerate as corporate purchasing contracts expire. The situation could become worse as many of Lenovo’s recent forays into new product areas are also likely to run into trouble, meaning the company could quickly see its new zooming top and bottom lines start to stumble, setting the stage for yet another reorganization in the next 2-3 years.
Bottom line: Lenovo could soon see history repeat, with strong results after 2 recent acquisitions setting the stage for integration difficulties and an eventual reorganization.
Related postings 相关文章:
◙ Lenovo’s TV Gamble: Failure Ahead? 联想电视赌注：未来会失败吗？
◙ TCL Cellphones: History Repeats Itself TCL手机业务历史重演
◙ Lenovo Completes Leadership Change, Yang Uninspired 联想完成高层调整，杨元庆难鼓舞人心
News Digest: May 24, 2012 报摘： 2012年5月24日
The following press releases and media reports about Chinese companies were carried on May 24. To view a full article or story, click on the link next to the headline.
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◙ Lenovo (HKEx: 992) Reports Fiscal Q4 and Full Year Results (Businesswire)
◙ China Mobile (HKEx: 941) to Spend 20 Bln Yuan on Handset Subsidies This Year – CEO (Chinese article)
◙ Suntech (NYSE: STP) Reports Q1 Financial Results (PRNewswire)
◙ Sina’s (Nasdaq: SINA) Weibo Microblog Incorporates Web Search (English article)
◙ TCL (HKEx: 1070) Showcases Its LED SMART Television in “Marvel’s The Avengers” (Busineswire)
Baidu Smartphones Set to Stumble 百度进军智能手机市场或以失败告终
I don’t like to sound too negative for 2 days in a row, but one day after predicting failure for PC giant Lenovo’s (HKEx: 992) new smart TV initiative I have to give a similar forecast for the recent rush into smartphones by a growing number of Chinese Internet players, with search leader Baidu (Nasdaq: BIDU) leading the charge. Chinese media have been buzzing for the last few days about Baidu’s new offering, a low-end smartphone that runs on the company’s self-developed operating system and was co-developed with TV maker Changhong (Shanghai: 600839). (Chinese article; English article) Baidu’s move follows the announcement of similar self-developed smartphones from online game specialist Shanda and Internet security firm Qihoo 360 (NYSE: QIHU), and the latest reports that online game specialist NetEase (Nasdaq: NTES) may also be getting into the space. (English article) Let’s have a closer look at the Baidu smartphone initiative, as that one is the most advanced, following the previous roll-out of an original Baidu model that failed to gain much attention under a partnership with Dell (Nasdaq: DELL). This latest tie-up with Changhong differs from the Dell model in that it is significantly cheaper, costing just 899 yuan, or about $140. I’ve looked at pictures of the new phone, and while a photo doesn’t always tell the full story, the handset truly does look clunky and cheap. I’m a bit surprised that Baidu is partnering with such unexperienced companies, first with Dell and now Changhong, in this initiative that is no doubt costing a lot of money. Dell is more known for its computers than cellphones, though the 2 product types do share some similarities. Changhong is known almost exclusively for its TVs, which have almost nothing in common with smartphones. That said, I really don’t expect much if any success for this new Baidu-Changhong model, which will have to compete with much more attractive low-cost smartphones from fast-growing domestic firms ZTE (HKEx: 763; Shenzhen: 000063) and Huawei, which mostly use Google’s (Nasdaq: GOOG) popular and reliable Android operating system. In fact, Baidu’s initiative looks like an attempt to imitate Google with Android, acknowledging the increasing importance of the mobile Internet. I applaud Baidu for putting big resources into this important new area, but honestly believe its smartphone initiative is set for failure. If Baidu wants to increase its chances of success, it could start by partnering with a major smartphone maker rather than Changhong, though I suspect many such players would be reluctant to form such a tie-up. Meantime, I would make similar predictions for the other smartphone initiatives from Shanda, Qihoo and now NetEase. I’m not sure why all these companies are taking such steps, as the smartphone market is already quite crowded with much more experienced and resource-rich players like Apple (Nasdaq: AAPL) and Samsung (Seoul: 005930). Perhaps all these companies just have too much money and are looking for a place to spend it.
Bottom line: Baidu’s smartphone initiative is likely to fail due to competition and inexperience, but could stand a better chance of success with better manufacturing partners.
Related postings 相关文章:
◙ Huawei Follows ZTE to Lower Profits 继中兴之后华为利润也降低
Lenovo’s TV Gamble: Failure Ahead? 联想电视赌注：未来会失败吗？
I should credit leading PC maker Lenovo (HKEx: 992) for being ahead of the curve by releasing its new smart TV in China last week, getting a slight lead on a widely anticipated launch for by Apple (Nasdaq: AAPL) for a similar new product group that could revolutionize the way people watch TV. (English article) Reviews are still few for Lenovo’s new product, a 55-inch TV called the K91; but based on its past track record as a company with limited capability in new product design, I would offer only a very small chance for this product to succeed, potentially costing Lenovo hundreds of millions of dollars in development and marketing costs. The reason for my pessimism is simple: Lenovo, a specialist in PCs for developing markets, has never shown any ability to be a leader in new product design, especially in areas where it has little or no experience. Its previous forays into cellphones, gaming consoles and tablet PCs have all been mostly flops, failing to generate any buzz or excitement after having to compete with better designed products from the likes of more innovative firms like Apple, Samsung (Seoul: 005930), Asustek (Taipei: 2357) and HTC (HKEx: 2498). Given that poor track record, I have little reason to believe this latest initiative will succeed either, especially since such smart TVs are a completely new category and thus there are few products out there to use as a guidebook into what works and what doesn’t for this area. I do at least have to give Lenovo credit for trying hard by buying state-of-the art technology for its first smart TV, with components coming from such top-end suppliers as chip designer Qualcomm (Nasdaq: QCOM), audio technology firm DTS (Nasdaq: DTSI) and its operating system based on Google’s (Nasdaq: GOOG) popular Android platform. The company may also be making a smart choice by launching the product in its home China market, where it is the dominant PC brand and which accounts for around half of its sales. But its early launch even in China could mean very little if its product doesn’t contain content and functionality that ordinary consumers want. What’s more, competing products from Samsung and especially Apple are likely to hit the market in a matter of months, meaning Lenovo won’t have much of a head-start over these rivals whose products will no doubt contain more features and generate more buzz than the Lenovo TVs. Lenovo hasn’t said very much about response for the product in the week since its launch, saying only that performance has exceeded its expectations. (Chinese article) But considering its past track record, look for the K91 to post disappointing sales over the longer term, perhaps in the tens of thousands this year, and for this broader smart TV initiative to end up as a failure for Lenovo like many of its other new product initiatives.
Bottom line: Lenovo’s new smart TV initiative is likely to fail despite an early head-start over rivals in China, with products from foreign rivals likely to eventually dominate the market.
Related postings 相关文章:
◙ NEC China Cellphones: New Lenovo Tie-Up? NEC计划重回中国手机市场 或与联想联姻
◙ Lenovo Completes Leadership Change, Yang Uninspired 联想完成高层调整，杨元庆难鼓舞人心
◙ Apple Feasts on China, Baidu Burps 苹果在华享受盛宴，百度盛宴停顿
Bottom line:
China: Room for How Many Amazons? 中国电商市场到底有多大？
China’s e-commerce space seems to get noisier by the day, with about a half dozen companies vying to become the nation’s next Amazon (Nasdaq: AMZN) by launching a steady stream of new initiatives in recent months taking them into a dizzying array of new product areas, many far removed from their roots. But at the end of the day there may only be room for 2 or possibly 3 mega online retailers in the market, and we should expect to see many of these aggressively expanding players ultimately either merge with rivals, or more likely quietly shutter their online shops in the next 1 to 2 years as they feel the heat of excessive competition now gripping the market. The latest in the steady flow of new initiatives has Suning (Shenzhen: 002024), better known for its bricks-and-mortar shops selling home appliances and electronics, opening a wine shop this week on its fast-expanding e-commerce site. (English article) News of this new online direction actually first emerged last month, along with reports that Suning would also get into the even more unrelated business of online travel services. Suning is hardly the only one to be branching into all kinds of strange new directions these days in the online space. Its forays into wine and travel come as the country’s second largest e-commerce site, 360Buy, which also goes by the name of Jingdong Mall, has also embarked on its own series of strange initiatives far beyond its original focus as an online electronics seller. Earlier this year the company launched a new book-selling business, and more recently reports have emerged that it will also get into the somewhat unrelated real estate and travel services businesses. (previous post) Then there’s Dangdang (NYSE: DANG), China’s only publicly listed e-commerce company, which began life as an online book seller similar to Amazon. But also similar to Amazon, the company has recently expanded into a number of new directions, including a major tie-up with GOME (HKEx: 493), one of China’s top bricks-and-mortar electronics retailers, in a bid to enter the online market for electronics and home appliances. If all of this is starting to sound like everyone is stepping on everyone else’s turf, it’s because that indeed seems to be what’s happening, with apparently little or no regard for profits or focusing on strategic new areas to complement existing core businesses. Not to be outdone in all this, the nation’s leading e-commerce site TMall, owned by Alibaba, is reportedly gearing up to significantly beef up its presence in the electronics space by signing major names like Philips (Amsterdam: PHG), Lenovo (HKEx: 992) and LG Electronics (Seoul: 066570) to an expanded area in its online mall dedicated to the highly competitive space. Outside all this expansion by domestic names, US retailing giants Wal-Mart (NYSE: WMT) and Amazon itself are also aggressively building up their China presences, the former through its investments in another major site called Yihaodian and the latter through its Joyo platform purchased several years ago, which recently changed its name to Amazon China. The Chinese e-commerce market is certainly big and can support more than one major player, though I seriously doubt it can support all these big names now scrambling to get into just about any new area they can find. The broader e-commerce market itself was worth around 500 billion in 2010, meaning perhaps its now worth about $100 billion — certainly not a small sum but also not enough for all the companies now chasing that limited pot of dollars. At the end of the day, look for 2 or perhaps 3 of these big players to survive in the longer term, with profitable companies like TMall and ones with cash-rich backers like Amazon China and Yihaodian, standing the best chances for success. But even those companies may have to make major adjustments before the current situation stabilizes, bringing widespread pain to nearly everyone as players open and close new business areas before they find the right mix.
Bottom line: The recent rapid expansion of major e-commerce firms into new product areas is unsustainable, and will end with many failures before 2-3 players emerge after a coming cleanup.
Related postings 相关文章:
◙ Alibaba’s Tianmao Takes on Electronics 天猫发力家电市场
◙ Dangdang, GOME In New Alliance, More to Come 国美携手当当网 或开启类似合作序幕
◙ 360Buy Losing Focus With Travel Plan 京东商城涉足在线旅行服务业 偏离核心业务
