The following press releases and media reports about Chinese companies were carried on September 2. To view a full article or story, click on the link next to the headline.
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NetEase’s (Nasdaq: NTES) Board Approves $500 Mln Share Repurchase Program (PRNewswire)
Phoenix New Media (NYSE: FENG) to Cut Staff, Retrench – Memo (Chinese article)
Alibaba (NYSE: BABA) Launches “Tmall Vineyard Direct” With Robert Mondavi Wines (Businesswire)
AsiaInfo to Acquire Trend Micro Chinese Subsidiary (Businesswire)
Following last week’s wild ride for Chinese stocks, now seems like a good opportunity to revisit the flurry of privatization bids for US-listed China Internet companies and how they’re faring. The list of headlines is led by reports that the biggest of the buyout bids for software security maker Qihoo 360 (NYSE: QIHU) is showing signs of unraveling, as investors balk at the widening gap between their original buyout offer and the company’s latest share price following last week’s sharp declines.
Meantime, another much smaller deal first announced at the height of the buyout wave in June has been quietly completed, resulting in the delisting of shares for China Mobile Games. Completion of this second deal just a couple of months after it was originally announced shows that such buyouts can still be done despite the big sell-offs in both China and New York that are making it hard to value such deals. Read Full Post…
The following press releases and media reports about Chinese companies were carried on August 29-31. To view a full article or story, click on the link next to the headline.
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Investor Group Considers Cutting $9 Bln Offer for Qihoo (NYSE: QIHU) (English article)
Take-Out Dining Platform Ele.me Completes $630 Mln Series F (English article)
Bottom line: Qihoo and Meizu are likely to struggle with their new smartphone campaigns in India, where intensifying competition will also undermine domestic rivals like Xiaomi and Huawei that have recently entered the market.
Qihoo unveils new Qiku smartphones
Qihoo (NYSE: QIHU) and Meizu have announced they are taking their smartphones to India, becoming the latest Chinese brands to export to the fast-growing but increasingly competitive market. India is actually the second stop on Qihoo’s smartphone roadmap, which will begin in its home China market with the launch of the first 2 models of its new Qiku smartphone brand. Meizu has become a major second-tier player in its home China market over the last few years, and formally announced its own move into India this week as it looks to move overseas.
The pair will join several of China’s top smartphone makers in the increasingly crowded India market, which shares many qualities with China. Xiaomi launched in India last year and the market quickly became its second largest globally, while Huawei’s Honor brand has also scored rapid progress in the market. But Qihoo’s biggest competitor in India could be Coolpad (HKEx: 2369), which is already a big player in the market but will also produce Qihoo’s new smartphones through a joint venture formed by the pair last year. Read Full Post…
The following press releases and media reports about Chinese companies were carried on August 27. To view a full article or story, click on the link next to the headline.
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Global PC Shipments to Fall 8.7 Pct This Year – IDC (Chinese article)
Bottom line: Qihoo could drop its privatization plan and launch a buyout offer for Coolpad, in a bid to protect its joint venture with Coolpad and stop a rival offer for the company from LeTV.
Bidding war shaping up for Coolpad?
A new media report is detailing an intriguing behind-the-scenes clash taking place between security software specialist Qihoo 360 (NYSE: QIHU) and online video company LeTV (Shenzhen: 300104), with big stakes involved for both sides. If the report is true, Qihoo is quickly finding itself in a difficult position that could end with collapses for its recent privatization bid or its joint venture partnership formed late last year with smartphone maker Coolpad (HKEx: 2369).
The clash is pitting 2 of China’s highest-profile Internet executives against each other, with Qihoo’s outspoken CEO Zhou Hongyi coming under a surprise attack from younger rival LeTV CEO Jia Yueting. In this case it appears Zhou may soon have to choose between going forward with his plans to privatize Qihoo, or abandon that plan and instead mount a counter-offensive to prevent LeTV from making a bid to take control of Coolpad. Read Full Post…
The following press releases and media reports about Chinese companies were carried on August 12. To view a full article or story, click on the link next to the headline.
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Xiaomi Kicks Off India Production for Strengthened Redmi 2 Edition (Chinese article)
China Jails Former Bright Food Chief For 18 years For Embezzling $30 Mln (English article)
Tencent (HKEx: 700) Reports 360 (NYSE: QIHU) Cloud Service for Pornography (Chinese article)
ChemChina, Camfin to Launch Tender Offer for Rest of Pirelli (Milan: PECI) (English article)
Phoenix New Media (NYSE: FENG) Reports Q2 Unaudited Financial Results (PRNewswire)
Bottom line: Investors are regaining confidence that some of the bigger, recently announced buyouts for US-listed China companies could be completed, but believe many smaller deals will ultimately collapse.
Perfect World completes buyout
Online game operator Perfect World (Nasdaq: PWRD) has formally completed its management-led buyout, offering us a good opportunity to check the status of dozens of other pending offers that look shaky due to recent turbulence in China’s stock markets. Perfect World was one of a handful of companies that launched their privatization drives before May, when a wave of new bids fueled by speculative money from China’s frothy stock markets suddenly began.
I’ve previously said that many of the earlier bids like Perfect World’s are likely to succeed, as their funding sources seemed more solid. But some of the other bids may run into trouble due shaky money sources that may rapidly disappear as China’s stock markets show signs of heading into another tailspin. Read Full Post…
Bottom line: New Oriental’s special dividend sends a signal that it has no plans to de-list from New York, even as short-sighted companies like Qihoo continue buyout plans in pursuit of higher valuations in China.
New Oriental awards special dividend
Nearly 2 weeks after the last US-listed Chinese companies announced plans to privatize, education specialist New Oriental (NYSE: EDU) is sending a different signal that indicates it has no plans to abandon its New York listing anytime soon. That signal comes in a footnote to New Oriental’s newly announced quarterly earnings, in which it declares a rare special dividend — something you wouldn’t expect a company to do if it was planning to soon de-list.
At the same time, software security specialist Qihoo (NYSE: QIHU) is reaffirming its previous plans to push ahead with its privatization scheme, even as investors remain skeptical that this particular deal could fall apart. Qihoo is easily the largest of China’s companies looking to privatize so far, and clearly investors are worried that the company won’t be able to complete its buyout worth nearly $10 billion due to the recent market volatility in China. Read Full Post…
Bottom line: Qihoo’s new Dazen smartphones stand a low chance of success, even if they provide better quality to comparably priced rivals, due to their late entry to the overheated ultra low-end of China’s smartphone market.
Qihoo unveils Dazen smartphone
About a half year after announcing its intent to enter China’s crowded smartphone space, software security specialist Qihoo (NYSE: QIHU) has unveiled its new product under a brand name that sounds clever and catchy but is decidedly downscale. Qihoo has just announced that its new smartphones will carry the brand name of Dazen, and will sell for a bargain basement price of 899 yuan, or about $150.
The move appears to be an extension of Qihoo’s longtime strategy of selling products cheaply or even giving them away for free, and then using those products as a marketing tool for its other paid products and services. But in this case the strategy of going after the ultra low end looks a bit questionable, since that part of the market is already quite crowded and many brands are believed to be losing money. Read Full Post…
The following press releases and media reports about Chinese companies were carried on July 22. To view a full article or story, click on the link next to the headline.
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Apple (Nasdaq: AAPL) CFO Says ‘Very Confident’ in China After Market Turmoil (English article)
