If you can’t build it yourself, then go out and buy it. That looks like the message coming from leading search engine Baidu (Nasdaq: BIDU), which has just raised a tidy $1.5 billion in its first-ever bond offering that could be used in part for acquisitions as the company looks to diversify. Baidu surprised many, myself included, with this massive new bond offering, which comes as growth for its core search business shows signs of slowing sharply.
Tag Archives: Qunar
Qunar Joins Year-End IPO Queue 去哪儿网有望年底赴美上市
We’re seeing growing signs that a mini-parade of Chinese IPOs could march through New York in the last 2 months of 2012, with word that online travel site Qunar hopes to list in the US by the end of the year. (Chinese article) If the reports are true, Qunar would join a small but growing list of Chinese companies that could make US listings by year end, with video sharing sites operated by Xunlei and Sohu (Nasdaq: SOHU) also sending similar signals. (previous post) If these listings go well, we could even see one of the shakier companies that has been waiting patiently to make a listing quickly move forward with an IPO, with online clothing retailer Vancl the most likely candidate in this category.
News Digest: October 31 报摘： 2012年10月31日
The following press releases and media reports about Chinese companies were carried on October 31. To view a full article or story, click on the link next to the headline.
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- China’s Big Banks Set For Slowest Annual Profit Growth Since Going Public (English article)
- Air China (HKEx: 753), GA Telesis in Aircraft Leasing, Spare Parts JV (Businesswire)
- ICBC (HKEx: 1398) Announces Q3 Results (HKEx announcement)
- Dangdang (NYSE: DANG) Opens Store on TMall (Chinese article)
- Baidu’s (Nasdaq: BIDU) Qunar Aims for US IPO By Year End (Chinese article)
- Latest calendar for Q3 earnings reports (Earnings calendar)
Qihoo Alliance Offensive Targets Baidu 奇虎掀起联姻潮 欲与百度试比高
Qihoo 360 (NYSE: QIHU) is stepping up its challenge to Baidu’s (Nasdaq: BIDU) dominance in online search, with word that the security software specialist has formed a new alliance with leading online travel firm Ctrip (Nasdaq: CTRP). (English article; Chinese article) This new alliance appears to be part of a clever tactic by Qihoo to form new tie-ups with Internet companies that specifically want to see more competition in the Chinese search market and thus are willing to work closely with Qihoo as it embarks on a new online search initiative. Accordingly, I wouldn’t be surprised to see more such announcements in the months ahead as Qihoo tries to build up its So.com search engine as a viable alternative to Baidu’s own service that now controls around three-quarters of the market.
Sohu Video, Qunar in IPO Marches 搜狐视频、去哪儿网加紧上市步伐
The latest news bits indicate the video sharing unit of web portal Sohu (Nasdaq: SOHU) and online travel services firm Qunar are both marching rapidly towards overseas IPOs, with both companies positioning themselves to move quickly if and when the current market freeze ever eases. Sohu has been saying for much of the last year that it wants to spin off its video unit into a stand-alone company for an eventual overseas listing, and now the company has formally separated the unit’s sales force into a separate entity. (Chinese article) Meantime, domestic media are also quoting a top executive of Qunar, which is backed by online search leader Baidu (Nasdaq: BIDU), as saying his company has passed industry leader Ctrip (Nasdaq: CTRP) in air ticket sales, in what sounds like a drive to raise the company’s profile in the run-up to its own IPO. (English article; Chinese article)
News Digest: September 22-24, 2012 报摘： 2012年9月22-24日
The following press releases and media reports about Chinese companies were carried on September 22-24. To view a full article or story, click on the link next to the headline.
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- Microsoft Asks PetroChina (HKEx: 857), Others to Stop Using Pirated Office – Sources (Chinese article)
- Qunar Monthly Air Ticketing Revenue Surpasses Ctrip (Nasdaq: CTRP) (English article)
- Volvo Cars Likely to Miss 2015 China Sales Goal: CEO (English article)
- Suntech (NYSE: STP) Receives Continued Listing Standards Notice from NYSE (PRNewswire)
- Panasonic (Tokyo: 6752) Details Damage to China Manufacturing Sites (Businesswire)
Ctrip Bonds: Outspending Private Rivals 携程债券：超出私募的竞争对手
As competition intensifies in nearly every major space on the Chinese Internet, companies are finding themselves increasingly in need of new money as their profits tumble and cash reserves dwindle. The options for new funding are particularly limited for younger private companies, whose main source of money is usually private equity and venture capital that is relatively limited. Older listed companies have more choices, since they can tap financial markets by issuing bonds or new shares to raise money. That distinction is seeing a small but growing number of older Chinese Internet firms raise money by issuing new debt to compete with their smaller but very aggressive rivals in the fight for market share. In the latest development on that front, leading online travel services provider Ctrip (Nasdaq: CTRP) has just announced plans to issue up to $140 million in convertible bonds . (company announcement)
Ctrip Travels Overseas With Priceline 携程网与外国公司价格线合作
Ctrip (Nasdaq: CTRP) has just announced a new tie-up with US travel services giant Priceline (Nasdaq: PCLN), marking the latest partnership with an overseas partner by Chinese firms looking to tap growing demand from increasingly wealthy Chinese travelers. These tie-ups are also being driven by intense competition that has recently emerged in the travel space, as up-and-coming younger firms with names like Qunar and TravelSky and new sites opened by big Internet names like Jingdong Mall look to steal market share from older established players like Ctrip and eLong (Nasdaq: LONG).
New Stumbles from BYD, Sina, Qunar 比亚迪、新浪及去哪儿遭遇新问题
Chinese companies are feeling the summertime heat of a slowing home economy, with new reports emerging from an array of sectors reflecting turbulence at troubled car maker BYD (HKEx: 1211; Shenzhen: 002594), and also at a year-old struggling luxury goods channel operated by leading web portal Sina (Nasdaq: SINA). Neither of these reports is too surprising for reasons I’ll soon explain; but perhaps a bit most worrisome are other reports saying up-and-coming online travel services site operator Qunar has also laid off some employees, in a sign that China’s economic slowdown is starting to affect even healthier companies.
China’s TravelSky Joins Global Travel 信天游与美国同业Sabre结盟Rush
I don’t usually like to commend myself, but I have to say that it appears I was correct with my recent prediction that something was happening in the normally low-profile travel sector, as we’ve seen a nonstop stream of new initiatives from the sector since then, nearly all involving new international tie-ups. (previous post) Barely a day seems to go by now without the announcement of a new tie-up between a Chinese company with a foreign counterpart in the travel space, including the latest announcement from US air and hotel ticketing giant Sabre Holdings that it is forming a new alliance with China’s TravelSky. (company announcement) The tie-up looks quite interesting, as it will instantly make the 30,000 Chinese hotels on TravelSky’s network available for booking by users of Sabre’s system, while making Sabre’s 100,000 properties available to TravelSky users. This kind of a tie-up is clearly designed to cater to both the growing number of Chinese traveling to the West, as well as the big numbers of western tourists who travel to China. The alliance also appears more aimed at bookings made by travel agencies, rather than do-it-yourself travel booking sites that cater mostly to individual consumers. As such, it won’t compete very directly with more consumer-oriented online travel booking sites like Ctrip (Nasdaq: CTRP), eLong (Nasdaq: LONG) and Qunar, which tend to focus on individual travelers in the domestic market. But if TravelSky does eventually get into the consumer market, it could instantly have a very attractive product with this new Sabre tie-up, allowing it to quickly gain share on Ctrip and the other major domestic players. The move also seems to be part of a broader one that has Chinese airlines and hotel booking firms trying to become more international. I previously wrote that this new globalization drive, which seems to have gained recent momentum, is probably being driven by Beijing, which wants all of its sectors to become more globally competitive rather than simply relying on their protected home market. Regardless of the reason for this sudden surge in global tie-ups, the recent momentum means we will probably see many more similar announcements in the months ahead, shaking up the relatively small, protected field of players, most of whom have largely relied up to now on their home China market. The looming shake-up and industry shift was apparent in another form overnight on Wall Street, where Ctrip itself announced a $300 million share repurchase program to bolster its sagging stock. (company announcement) Ctrip shares rallied about 4 percent after the announcement, but they are still at just about a third of their levels from just a year ago, amid a broader depressed market for US-listed Chinese shares following a series of accounting scandals last year. I’ve always been quite positive on Ctrip due to its industry-leading position and strong ability to focus on its core travel services business. But the company may need to follow the recent trend and look for more expansion opportunities outside China — including possible tie-ups with foreign partners — or risk losing both share and relevance to more aggressive rivals.
Bottom line: A new tie-up between a top China hotel booking service and a US counterpart is part of a growing globalization trend for Chinese providers of travel services.
Related postings 相关文章:
◙ Airlines on Global Flight, New Tie-Ups Ahead? 航空公司环球飞行，未来有新合作？
◙ China Eastern’s Budget Play: Turbulence Ahead 东方航空成立廉价航空公司：将面临动荡
Ctrip Profit Slows Amid Online Travel Rush 在线旅游热潮中携程利润放缓
A number of interesting news bits are coming from the online travel space, led by the latest quarterly results from industry leader Ctrip (Nasdaq: CTRP) that show competition is rapidly heating up in this space, where another up-and-comer named Tujia.com has just received new venture funding. After dominating China’s online travel space for years, Ctrip and eLong (Nasdaq: LONG) are getting a recent wave of new competition from others finally waking up to the potential of the online travel sector, fueled by demand from more and more Chinese who have extra money and time to spend on travel. That demand has helped to propel a new field of rivals, including online travel site Qunar, which itself received a major investment from online search leader Baidu (Nasdaq: BIDU) late last year. (previous post) Others moving aggressively into the space include e-commerce giant 360Buy, which also calls itself Jingdong Mall, and now Tujia.com, which specializes in vacation packages. (previous post) Let’s take a quick look at Ctrip’s results, which show the company’s revenue grew a respectable 19 percent in the first quarter, even as profit tumbled 28 percent. (results announcement) A look at the numbers shows that reduced commissions are partly behind the profit decline, as hotels and airlines come under pressure to boost their own profits and also have more platforms to sell their products from. But the big reason for Ctrip’s profit decline appears to be sales and marketing expenses, which jumped nearly 50 percent and now account for more than one-fifth of total revenue. Clearly Ctrip is having to spend a lot more to maintain its growth than it did in the past, reflecting the growing competition in the market that is only likely to get worse, putting further pressure on profits. For the moment at least, investors seem to like what they see in these latest results, initially bidding up Ctrip shares as much as 5 percent after the report came out, though now they are up only 2 percent in after-hours trade. From my perspective, this kind of increased sales and marketing spending will be critical for Ctrip to maintain its market-leading position, and for that reason I wouldn’t be too concerned just yet by this profit erosion. But at some point the company will have to return to profit growth, or risk being abandoned by investors. Meantime, Tujia has just landed a new round of venture funding, with Ctrip itself as one of the investors, along with US travel site operator HomeAway (Nasdaq: AWAY) and US investment firms Lightspeed Venture Partners and CDH Investments. (announcement) No terms were given in the announcement, but I would expect this round is probably in the $10-$20 million range, and the presence of so many high-profile investors means that Tujia should be well positioned to grow in its niche area of providing vacation packages, and could make a New York IPO in the next couple of years. With all these fast-rising players in the market, look for everyone to feel the heat in terms of falling margins, and perhaps even a merger or 2 involving one or more of the big names in the next couple of years.
Bottom line: Ctrip’s latest results reflect intensifying competition in the online travel space, with some consolidation likely in the next 2 years.
Related postings 相关文章:
◙ Baidu’s Qunar: Going Places 百度投资的去哪儿网：前途无量
◙ Jin Jiang Looks for Room at the Global Lodge 锦江集团寻求跻身国际高端酒店之列
