Bottom line: Momo’s stock should continue to perform well over the next few months as investors ignore a scandal around its CEO, while Spring Airlines stock should also debut strongly later this month in its newly approved IPO.
Spring Airlines approved for Shanghai IPO
It seems investors aren’t too concerned when CEOs of their companies are accused of corporate crimes, at least based on the strong trading debut for mobile social networking app maker Momo (Nasdaq: MOMO). Frankly speaking, I’m not surprised about the strong performance for Momo, whose CEO was accused of stealing property from his former employer NetEase (Nasdaq: NTES) and using that property to start up his new company. The fact of the matter is that such dishonesty and unethical behavior is quiet common in China’s corporate sector, and thus is unlikely to result in any punishment, be it a jail sentence or even negative investor sentiment. Read Full Post…
Bottom line: CGN Power’s shares could have some upside over the next 6 months, while Momo is likely to delay its IPO until next week as it responds to allegations of illegal actions by its CEO.
Nuclear prospects power CGN IPO
News continues to come thick and fast in the year-end IPO rush, with a number of colorful stories making this year’s listing frenzy a bit feistier than usual. Leading the headlines was a sizzling trading debut for nuclear power company CGN Power (HKEx: 1816), as investors clamored for a play in China’s drive to clean up its polluted air. Meantime, mobile social networking (SNS) app maker and listing candidate Momo issued an updated filing for its New York IPO, explaining wrongdoing claims against its CEO by his former employer NetEase (Nasdaq: NTES). Lastly, seafood company China Tuna has formally yanked its Hong Kong IPO plan, ending a messy affair that was spoiled by revelations by environmental advocacy group Greenpeace. Read Full Post…
The following press releases and media reports about Chinese companies were carried on December 11. To view a full article or story, click on the link next to the headline.
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China Nuclear Generator CGN Power (HKEx: 1816) Surges On HK Debut (English article)
Momo Responds To Attack On CEO Tang Yan By NetEase (Nasdaq: NTES) (Chinese article)
Chinese Taxi-Hailing App Didi Raises More Than $700 Mln (English article)
India Court Issues Order Banning Import, Sale Of Xiaomi Smartphones (Chinese article)
China Tuna Industry Group Withdraws HK IPO Application (Businesswire)
Bottom line: Momo’s IPO will go ahead but could debut weakly due to wrongdoing allegations against its CEO, while SouFun and Xunlei shares will be weak through 2015 due to a bad real estate market and stiff competition.
NetEase accuses Momo CEO of wrongdoing
The China Internet world is being rocked with scandals as we head into the end of the year, led by new allegations of wrongdoing against the founder and CEO of mobile social networking service Momo on the eve of its New York IPO. Meantime, recently listed online video site Xunlei (Nasdaq: XNET) is being rocked by accusations of putting pornography in some of its pop-up ads. Finally there’s leading real estate website SouFun (NYSE: SFUN), which is taking a hit after a highly-trumpeted agreement with a major real estate agency has fallen apart as China’s property market deteriorates. Read Full Post…
The following press releases and media reports about Chinese companies were carried on December 10. To view a full article or story, click on the link next to the headline.
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NetEase (Nasdaq: NTES) Says Momo CEO Was Corrupt While At Company (Chinese article)
Qunar (Nasdaq: QUNR) Forecasts Profit By End Of 2016 (Chinese article)
SouFun (NYSE: SFUN) Terminates Strategic Cooperation With Century 21 China (PRNewswire)
Tencent (HKEx: 700) Doubles 2015 Budget For Literature Subsidiary (English article)
LeTV (Shenzhen: 300104) Seeks License to Make Electric Car (English article)
Bottom line: Chen Tianqiao’s sale of his Shanda Games stake marks his symbolic exit from online entertainment, and he will probably return to deal-making by setting up his own private equity firm.
Chen Tianqiao steps down from Shanda Games
The slow-motion breakup of the online entertainment empire of Shanda Interactive has taken a major step forward, with news that the company is selling its entire stake in its core online gaming unit. The news follows previous reports that Shanda Interactive had reached a deal to sell a controlling stake in its Cloudary online literature unit, and its sale earlier this year of a controlling stake in its struggling Ku6 Media (Nasdaq: KUTV) online video unit. All of this comes as Shanda Interactive’s chairman and founder Chen Tianqiao looks to disband his empire that was an early leader in online entertainment, but later languished as it was overtaken by rivals like NetEase (Nasdaq: NTES) and Tencent (HKEx: 700). Read Full Post…
Most of China’s high-tech attention was focused on the scenic canal city of Wuzhen near Shanghai this past week, as a who’s-who of top Internet executives gathered for a conference that billed itself as a global gathering. Most of China’s top names were reportedly at the event, including Baidu’s (Nasdaq: BIDU) Robin Li, Alibaba’s (NYSE: BABA) Jack Ma and NetEase’s (Nasdaq: NTES) Ding Lei. But the guest list was notably lacking in major global names, and at least one executive commented on the sensitive subject of the exclusion of global leaders like Facebook (Nasdaq: FB) and Twitter (NYSE: TWTR) from the Chinese Internet.
Meantime, the marketing savvy Lei Jun, who is also CEO and hypemaster supreme for smartphone sensation Xiaomi, also managed to make his own mini splash in the microblogging realm by declaring his own ambition to overtake Samsung (Seoul: 005930) and Apple (Nasdaq: AAPL) to become the world’s biggest smartphone brand. Such hype from Lei isn’t all that unusual, though I was somewhat surprised to see several executives from other firms chime in with support for this upwardly mobile company. Read Full Post…
Bottom line: NetEase’s withdrawal from microblogging represents a broader decline for the overall sector, and is likely to put downward pressure on Weibo shares over the medium to longer term.
NetEase microblog withdrawal looks bad for Weibo
Media reports that web stalwart NetEase (Nasdaq: NTES) will finally shutter its microblogging service don’t come as a big surprise, since it’s been years since anyone has posed a challenge to the dominance of sector leader Weibo (Nasdaq: WB). But what does come as a slight surprise was the reaction to the news in Weibo’s share price. One would normally expect Weibo shares to rally on news of a competitor’s demise, but instead Weibo’s shares actually fell nearly 4 percent in the latest trading session. Read Full Post…
The following press releases and media reports about Chinese companies were carried on November 6. To view a full article or story, click on the link next to the headline.
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GM (NYSE: GM) China Sales Expand at Slowest Pace In 20 Months (English article)
China’s MIIT To Issue FDD-LTE 4G Licenses In December- Source (English article)
Gap (NYSE: GPS) Brand Surpasses 100 Stores In Greater China Region (Businesswire)
NetEase (Nasdaq: NTES) To Shutter Microblogging Service (Chinese article)
Sony (Tokyo: 6753) Mobile China Layoffs To Reach 700-800, Denies Leaving Market (Chinese article)
Latest calendar for Q3 earnings reports (Earnings calendar)
The near-monopoly held by Tencent’s (HKEx: 700) WeChat in China’s mobile messaging space could soon get a fresh shot of competition, with word that e-commerce giant Alibaba (NYSE: BABA) was in talks for an alliance to revive China Mobile’s (HKEx: 941; NYSE: CHL) fast-fading Fetion text messaging service. Such a powerful tie-up could take direct aim at the current stranglehold on the market held by WeChat, which now has more than 400 million active users and has become an indispensable communications tool for many. Read Full Post…
The names of top executives from some of the world’s leading tech firms have filled the headlines these last 2 days, as Apple (Nasdaq: AAPL) CEO Tim Cook, Facebook (Nasdaq: FB) CEO Mark Zuckerberg and IBM (NYSE: IBM) CEO Virginia Rometty visit China to promote their companies. But today I wanted to focus on a far less known Chinese Internet pioneer, Chen Tong, who is making headlines in his native China as he steps down at Sina (Nasdaq: SINA), the country’s leading web portal and one of its earliest Internet companies.
Perhaps one reason I’m attracted to Chen’s story is because he comes from a background similar to my own, starting out as a journalist when he joined a company in 1997 that would later lead to his employer of nearly 2 decades. Anyone who knows the Chinese Internet realizes that 2 decades is really the entire history of the medium in China, and Chen’s early arrival and wide popularity among industry veterans is drawing widespread praise and some sadness as he steps down. Read Full Post…
