The following press releases and media reports about Chinese companies were carried on September 12-14. To view a full article or story, click on the link next to the headline.
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China to Issue Online Car Hire Service Regulations – Source (English article)
Meituan in Urgent Need of Funds as Online Take-Out Dining Wars Continue (Chinese article)
Boeing (NYSE: BA) Plans to Finish Some 737 Jetliners in China: Report (English article)
Trina (NSYE: TSL) Plans IPO of `Growthco’ to Manage Solar Farm Developments (English article)
Update: Since originally writing this post, Alibaba has put out a statement denying it is reducing graduate hiring, and says it has sent more than 1,400 job offer letters to graduating students for 2016 (Chinese article)
Bottom line: Alibaba’s reduction in its university recruiting program is an extension of a hiring freeze announced earlier this year, and is part of a much-needed effort to make its large headcount more efficient.
Alibaba trims campus recruitment
In what some may interpret as a sign of trouble, media are reporting that e-commerce leader Alibaba (NYSE: BABA) is sharply scaling back its recruitment of new college graduates. The interpretation of trouble is relatively obvious, since Alibaba has wooed investors with its breakneck growth story since its record IPO last year. Thus a sharp slowdown in hiring of young talent could signify a parallel slowdown in overall growth.
But the news shouldn’t come as a huge surprise, since Alibaba announced just 4 months ago that it would freeze its global headcount for the rest of the year. (previous post) That move was aimed at giving the company time to rationalize its huge workforce of 30,000, many of whom have joined as a result of Alibaba’s lightning growth that has included numerous acquisitions over the last 2 years. Read Full Post…
The following press releases and media reports about Chinese companies were carried on August 22-24. To view a full article or story, click on the link next to the headline.
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China Said Nearing Overhaul of Big 3 Telecom Leadership (English article)
Citic Fund Unit Said to Plan $100 Mln Uber Investment (English article)
Ping An (HKEx: 2318) Says Plans IPO for Lufax Online Lender (English article)
Huawei Prepares to Launch Honor Brand Smartphones in US (Chinese article)
Group Buying Site Meituan Losing 600 Mln Yuan Per Month – Source (Chinese article)
Bottom line: Baidu’s tie-up with a major Japanese noodle chain looks like a smart move to build up its fledgling takeout dining business, though it will need to do more to win back investors concerned about its aggressive spending on O2O investments.
Baidu ties with Ajisen Ramen
A week after its stock was hammered by concerns about big spending on its online-to-offline (O2O) services, leading search engine Baidu (Nasdaq: BIDU) has found a major new ally for that part of its business in Japanese noodle chain Ajisen Ramen (HKEx: 538). This particular deal will see the Hong Kong-listed Ajisen and another investor pump $70 million into Baidu’s takeout dining service, providing a major supporter not only due to the investment but also the chain’s strong presence in major Chinese cities.
Baidu’s stock is still recovering from a hammering last week that saw the shares fall by nearly 20 percent to a year-low after it reported anemic 3.3 percent profit growth in its latest reporting quarter due to heavy spending on O2O services. (previous post) Such services include things like buying takeout restaurant food online, and purchasing items from real-world stores through group buying sites. Read Full Post…
Bottom line: Alibaba’s massive online grocery promotion looks aimed at countering potential new challenges from Walmart, as the US retailing giant overhauls its China e-commerce operations.
Alibaba launches major grocery promotion
Just days after Walmart (NYSE: WMT) made a major shift in its China e-commerce strategy, local market leader Alibaba (NYSE: BABA) is firing back with a massive 1 billion yuan ($160 million) promotion that looks squarely aimed at the US retailing giant. This particular promotion comes in the grocery space, which also happens to be a core strength of Yihaodian, the major plank in Walmart’s China e-commerce operation. Alibaba’s announcement also comes just days after Walmart announced it was buying out its partners in Yahaodian to take full control of the site and better integrate it with its existing China operations. Read Full Post…
Bottom line: Meituan is feeling increasing isolation as its 2 chief rivals strengthen partnerships with Baidu and Tencent, and is likely to be forced into a similar tie-up by the end of next year to maintain its industry-leading position.
Meituan feels growing isolation
Leading group buying site Meituan is finally responding to a flurry of reports involving its own finances and a new challenge coming from top search engine Baidu (Nasdaq: BIDU), releasing data that reflect its own strong growth and market dominance. At the same time, CEO Wang Xing is also shooting down rumors that his company is in the process raising $1 billion in new funds, and is repeating his previous position that his company isn’t in any hurry to make an IPO.
The sudden release of information by this low-profile company raises the bigger question of what’s the motivation behind this flurry of activity for the normally low-profile Meituan. I personally believe the company isn’t gearing up for an IPO, especially in the wake of all the market turbulence in China right now and the flood of US-listed Chinese companies that have announced plans to privatize and return home to re-list. Read Full Post…
The following press releases and media reports about Chinese companies were carried on July 16. To view a full article or story, click on the link next to the headline.
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McCain raises concerns about possible China bid for Micron Tech (Nasdaq: MU) (English article)
Huawei Gets Permission to Manufacture Cellphones in India (Chinese article)
China’s Tsinghua Gives $100 Mln to Android Challenger (English article)
Meituan to Acquire Chinese Travel Search Engine Kuxun – Source (English article)
HK Securities Regulator Orders Halt to Trading in Hanergy (HKEx: 566) (Chinese article)
Bottom line: Baidu’s new $200 million investment in its take-out dining service is likely to be followed by a sale of the platform to its Nuomi group buying unit, as part of its effort to build up an O2O company to compete with Dianping.
Baidu pumps up take-out dining site
Online search leader Baidu (Nasdaq: BIDU) continues to play catch-up to leading group buying sites Meituan and Dianping, with word that it’s investing a fresh $200 million in its young Internet-based take-out dining service. The move comes just weeks after e-commerce leader Alibaba (NYSE: BABA) announced a similar move to boost its own take-out delivery service, and as Tencent-backed (HKEx: 700) Dianping boosts its own early lead in the space through its Ele.me take-out delivery unit.
All of these companies are scrambling to build up their online-to-offline (O2O) businesses, which bring together Internet-based platforms for services like ordering food and merchandise, with real-world retailers like restaurants and department stores. Tencent is clearly placing its O2O bets with Dianping, which began life as a restaurant ratings site but has moved into a growing number of related areas like group buying and take-out delivery. Read Full Post…
Bottom line: Tencent’s new bond issue and Meituan’s $1 billion fund-raising plan are likely to mark the end of a wave of massive capital raising, as investors pause until China’s financial markets stabilize.
Meituan eyes new $1 bln fund-raising
China’s stock market turmoil may have brought an abrupt end to the booming IPO markets in Shanghai, Shenzhen and Hong Kong, but it hasn’t completely killed investor appetite for hot Internet companies. That’s the conclusion one could draw based on the latest series of mega-deal announcements, including a record $2 billion fund-raising by hired car services app operator Didi Kuaidi.
That fund-raising was formally announced the same day that reports emerged saying leading group buying site Meituan was aiming to raise another $1 billion, less than a year after it raised $700 million. Last but not least, social networking giant Tencent (HKEx: 700) is preparing to raise $100 million of its own, announcing it has just priced the latest tranche of bonds in a previously announced program to issue up to $10 billion in new debt. Read Full Post…
The following press releases and media reports about Chinese companies were carried on July 9. To view a full article or story, click on the link next to the headline.
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Group Buying Site Meituan Prepares to Raise $1 Bln, Value Doubles in Half Year (Chinese article)
Alibaba (NYSE: BABA) Increases Investment in Singapore Post by $138 Mln (Chinese article)
Bottom line: Baidu’s spending blitz at Nuomi looks like a good but expensive strategy to help the company quickly pick up market share in the group buying space, and could pose a serious challenge to industry leaders Dianping and Meituan.
About Internet Giant Baidu
Baidu revs up spending at Nuomi
Internet giant Baidu(Nasdaq: BIDU) is making a major push into the group buying space, announcing a bold campaign that includes 20 billion yuan ($3.2 billion) in new spending as it aims to replicate its earliest success in online search. This particular campaign is focused on Baidu’s Nuomi group buying site that it purchased a year and a half ago, and has the site’s chief saying he aims to overtake industry leaders Dianping and Meituan in the next 1 year and 3 years, respectively.
This particular campaign surprised me a bit, as Baidu hasn’t really announced any major plans for Nuomi since buying the company from struggling social networking site Renren (NYSE: RENN) for more than $200 million. But this kind of move would be similar to what Baidu did with online travel site Qunar (Nasdaq: QUNR), which was already growing quickly when Baidu purchased a controlling stake in 2011. Since then, Qunar has made an IPO and Baidu has poured big money into the company, which is now posing a serious challenge to longtime industry leader Ctrip. (Nasdaq: CTRP) Read Full Post…
