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Renren Inc. (NYSE: RENN) latest Business and Financial News , by former Reuters journalist Doug Young based in China.

News Digest: February 15, 2012 报摘： 2012年2月15日

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The following press releases and media reports about Chinese companies were carried on February 15. To view a full article or story, click on the link next to the headline.

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◙ HP’s (NYSE: HPQ) China PC Market Share Drops to 5.3% (English article)

◙ Renren (NYSE: RENN) Updates Preliminary Q4 Results and Q4 Earnings Date (PRNewswire)

◙ ZTE (HKEx: 763) Announces Progress of Material Litigation With Ericsson (HKEx announcement)

◙ Amazon (Nasdaq: AMZN) Removes iPad From China Site, GOME, 360Buy Still Selling (Chinese article)

◙ Yahoo (Nasdaq: YHOO)-Alibaba Talks At An Impasse: Sources (English article)

◙ Latest calendar for Q1 earnings reports (Earnings calendar)

Tudou-Sina Tie-Up: More to Come？ 土豆网联手新浪

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Five months after buying a 9 percent stake in Tudou (Nasdaq: TUDO) shortly after its New York IPO, Sina (Nasdaq: SINA) has just announced its first tie-up with the online video site, China’s second largest, in what looks like the first of more to come, perhaps ending with the biggest tie-up of all, an outright acquisition. Under their first tie-up announced late on Friday, the 2 companies have launched a platform allowing sharing of Tudou videos on Sina’s popular Weibo microblogging platform. (English announcement; Chinese article) This particular tie-up looks quite interesting, as it combines Tudou’s rich online video library with Weibo’s 250 million users to create a potent platform that would be extremely attractive to advertisers — one of the main income sources both companies are relying on in their search for sustained profits. This combination could not only help Tudou steal advertising dollars from rivals like Youku (NYSE: YOKU) and Sohu (Nasdaq: SOHU) video, but could also help Weibo chase dollars now going to traditional social networking sites like Renren (NYSE: RENN) and Kaixin, as this kind of online video offering will give it a more traditional SNS feature. Sina shares didn’t do much after the news came out, actually dropping a bit despite a rise in the broader market. But more interesting was the reaction in Tudou shares, which jumped 16 percent to $16.25 — a healthy gain although still far below the $29 that Tudou sold shares for in its IPO last August. That jump is certainly fueled in part by excitement over this new deal, but another major factor is also growing expectation that Sina may make an outright offer for the company in the not-too-distant future. Such an offer would make sense for Sina, which needs a video offering to better compete with Sohu and looks like an increasingly important piece in general for a diversified web portal. From Tudou’s perspective, a merger would instantly give it access to Sina’s huge user base, both through its core portal business as well as subsidiaries like Weibo. Of course the major sticking point could be price, assuming Tudou Chairman Gary Wang wants to sell, which is far from certain. But even if he wants to sell, he may be loathe to part with his company for less than its IPO price, which would be a hefty 80 percent premium to its last closing price. Still, this kind of a merger looks almost too logical for either side to ignore, and I wouldn’t be surprised to see Sina either significantly increase its stake or buy Tudou outright by the end of this year.

Bottom line: A new tie-up between Sina’s Weibo and Tudou looks like a smart for both sides, and could pave the way for the former to acquire the latter by year-end.

Related postings 相关文章:

◙ Sina Taps On Back Door Into Tudou 新浪可能收购土豆

◙ Sohu’s Blowout Earnings: IPO In Store for Video? 搜狐发喜报视频业务或上市

◙ Tudou IPO Set to Stumble Out of the Gate 土豆上市首日难有精彩表现

Twitter Eyeing China? Twitter想进中国？

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The world was buzzing over the weekend with news from the world’s 2 biggest social networking sites, Facebook and Twitter, with implications not only for themselves but also the China market in different ways. Twitter’s move was the more interesting in that regard, as it announced a new policy that could let posts on its site be seen in some markets but not others — a move that could clearly make it more viable in places like China where many sensitive topics are officially banned for online discussion. (Chinese article) Meantime, the markets were also buzzing with word that Facebook could file for its highly anticipated IPO this week, news that got investors excited about China SNS sites, with shares of both Renren (NYSE: RENN) and Sina (Nasdaq: SINA), operator of the wildly popular Weibo service, both posting nice gains on Friday. But let’s return for a moment to Twitter, as that’s the news that has the biggest potential to shake-up China’s microblogging sphere now dominated by Weibo. Anyone who lives in China knows that both Twitter and Facebook have been blocked in the market since the spring of 2009, presumably because they operate offshore and thus aren’t subject to China’s strict self-censorship laws for all of its websites. Facebook has signaled a number of times it still intends to make a play for China (previous post), with founder Mark Zuckerberg visiting China about a year ago and saying he wants to visit again as clearly the market is a critical piece of any global Internet strategy. Twitter has been much quieter on the subject, without ever really saying what its future plans are for the market now dominated by Weibo, which has around 250 million users. This latest adjustment at Twitter looks clearly aimed at the China market, as it would ease Chinese regulators’ concerns about the service’s ability to keep unwanted posts from outside markets off the site. Still, I’m not totally convinced Twitter has its eye on China just yet, mostly because Weibo itself has struggled to make any money in the market, despite its incredible popularity. Furthermore, anyone who plays in China SNS will now have to deal with Beijing’s recently announced real-name registration system, which will not only put a big burden on the SNS services themselves but is likely to deter many web surfers who like to remain anonymous. On the whole, I suspect this move by Twitter may be designed to test the China waters and will be followed by a visit to Beijing to see what regulators think. If the reaction is positive, I wouldn’t be surprised to see Twitter taking some kind of modest initiative in China by the end of this year, though it will face a difficult road catching up to Weibo.

Bottom line: Twitter’s latest policy shift allowing market-specific content controls could signal it is considering a move into China, which could come by the end of this year.

Related postings 相关文章:

◙ Despite China Rebuff, Facebook Going Back for More Facebook明知山有虎，偏向虎山行

◙ Cleanup Resumes, Facebook Sniffs Out China Investors 在美上市的中国企业将继续面临“大清洗”

◙ Weibo Gets Confidence Vote From Digital Sky DST投资消息或提振新浪短期前景

News Digest: January 28-30, 2012

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The following press releases and media reports about Chinese companies were carried on January 28-30. To view a full article or story, click on the link next to the headline.

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◙ Solar CEOs See Boom in China Will Ease Glut in 2012: Energy (English article)

◙ Obama Officials Back Bill to Hit China Subsidies (English article)

◙ Facebook IPO Talk Lifts China SNS, Including Sina (Nasdaq: SINA), Renren (NYSE: RENN) (Chinese article)

◙ Sany (Shanghai: 600031) Will Buy German Cement-Pump Maker Putzmeister (English article)

◙ Baidu (Nasdaq: BIDU) to Report Q4 Results on Jan 30, Revenue Seen Up 88 Pct (Chinese article)

◙ Latest calendar for Q1 earnings reports (Earnings calendar)

Microblog Clampdown: Only Chapter 1? 实名制向网络行业吹去冷风

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A new rule requiring microbloggers to register using their real names continues to send chills through the online world, with a new report saying the campaign will soon be extended to other social media. The domestic media reports cite an unnamed government official in Beijing, which announced the initial rule late last week (previous post), saying more guidelines will follow requiring all sites to implement real-name registration throughout their various social networking sites to give operators like Sina (Nasdaq: SINA), Tencent (HKEx: 700) and Renren (NYSE: REN) quick and easy access to who is doing what and pass that information to government officials upon request. (English article) If China was looking to kill or severely stifle development of its fledgling but vibrant social media, this certainly looks like a good way to do it. The initial rule appeared to target microblogging sites, which would have dealt a blow to a limited number of companies, most notably Sina’s popular Weibo service. But this new expanded rule would potentially affect any and every kind of social media service, from microblogging to social networking services (SNS) operated by Renren and Kaixin and even instant messaging services like Tencent’s popular QQ. The traditional SNS services may be best positioned to weather this storm, as most encourage their users to register using their real names, whereas the big majority of microblogging and instant messaging users use Internet names that are often difficult or impossible to trace. But regardless of any of that, this expanded requirement will send a strong signal that anything and everything a person writes in any of these sites is being monitored by the government, discouraging many from using the services at all. In some ways, this latest crackdown looks similar to one 5 or 6 years ago on the then-vibrant text messaging services industry, a mainstay of Sina, Sohu and NetEase (Nasdaq: NTES) at that time. That crackdown effectively killed the industry in the years that followed. I doubt results of this crackdown will be as severe, but I would still look for activity on these social media sites to slow and even drop off sharply in the next year.

Bottom line: Beijing’s potential expansion of its real-name policy to all social media will send a chill through the industry and severely hamper its development.

Related postings 相关文章:

◙ New Rule Hits Sina, Instant Messaging to Benefit? 微博实名重创新浪 即时信息服务有望受益

◙ Govt’s Microblog Shift Looks Good for Weibo 政府口风转变或有利於新浪微博

◙ Weibo Still Faces Crackdown Despite Govt Tie-Up 新浪微博难改“被监管”命运

2011 Limps Out With Haitong IPO Withdrawal 海通证券推迟IPO 2011以市场疲弱状态落幕

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2011 could well go down as one of the most schizophrenic years for IPOs in recent memory, with the latest pulling of a mega-offering by Haitong Securities (Shanghai: 600837) symbolizing the dismal sentiment that has set in over the last 6 months after a strong start to the year. According to foreign media reports, Haitong, which is already listed in Shanghai, has decided to scrap its Hong Kong offering that would have seen it raise up to $1.7 billion due to dismal market sentiment. The decision comes after a steady string of other deals that were either scrapped or went forward with weak results. One of the biggest, a Hong Kong offering by Haitong rival CITIC Securities (HKEx: 6030; Shanghai: 600030) had to be scaled back but still went ahead despite the weak sentiment. Since then, the company’s shares have sunk about 3 percent from their IPO price in September, despite its premier status as China’s biggest brokerage. Other smaller offerings by online video site Xunlei and Shanda‘s (Nasdaq: SNDA) online literature unit Cloudary had to be were pulled as well, again due to weak investor sentiment. These smaller US companies have been hit not only by that weak broader sentiment, but also by more specific concerns about Chinese firms’ accounting practices following a series of accounting scandals earlier in the year. Companies that have gone forward with offerings this year have hardly offered any reassurance. Shares of Renren (NYSE: RENN), a leading Chinese social networking site, now trade at about a quarter of their IPO price since their May offering; while shares of video sharing site Tudou (Nasdaq: TUDO), which made its IPO in August when sentiment was already weak, have sunk by more than half from their IPO price even after the company reported a surprise third-quarter profit. The combination of confidence crisis and broader weak market sentiment is no doubt behind the huge losses for US-listed China stocks. That said, investor sentiment is notoriously cyclical, and I would expect people to rediscover the big potential of China stocks sometime next year, probably around the second quarter, at which time we should see names like Haitong and perhaps even Cloudary or Xunlei make a second try at an IPO. In the meantime, braver investors with money to spare could position themselves for some nice returns by buying shares now ahead of the next uptick.

Bottom line: Haitong Securities’ pulling of its IPO reflects a dismal IPO environment that should be near bottom, with sentiment likely to pick up for China plays around the second quarter of 2012.

Related postings 相关文章:

◙ Internet Investors Seek Refuge in Big Names 互联网投资者选择性支持中国市场领头羊

◙ Shanda Moves Ahead With Privatization 投资者对盛大私有化仍持保留态度

◙ Year End Brings Problematic New IPO Wave 中国新一波IPO潮或无法达预期效果

Watch Out Weibo, Weixin Is Growing 新浪微博要小心腾讯微信要崛起

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While most of the China Internet world has been fixated on the meteoric rise of Sina’s (Nasdaq: SINA) Weibo microblogging service, a rival offering from Tencent (HKEx: 700) called Weixin, which literally means “tiny letter”, has quietly gained momentum and could pose a serious challenge in the near term. The looming Weibo vs Weixin rivalry also casts an interesting spotlight on the broader issue of PC vs mobile Internet, as Weibo is the clear leader in desktop web surfing while Weixin has a number of features that make it more suitable for mobile Internet use. Domestic media are reporting that Weixin had 50 million registered users, 20 million of those active, at the end of November. (English article) Of course those number still pale with Weibo’s 200 million registered users that Sina reported at the middle of this year. But considering Weixin was just launched early this year while Weibo has been in business for over 2 years now, Weixin clearly looks like an interesting bet. Others have tried to take on Weibo, including search titan Baidu (Nasdaq: BIDU), which shuttered its struggling microblogging service in May (previous post), and Renren (NYSE: RENN), which just recently joined the fray. (previous post) But Tencent has taken an interesting approach by developing Weixin as a product maximized for mobile microblogging, with features that, for example, allowing one’s phone to make a sound each time a new post is received and also allowing audio posts. Given that more and more of the Internet is going mobile, this initiative from Tencent, which has a strong track record of entering new business areas popularized by others, could have a good chance of success and pose the first strong challenge to Weibo. Meantime in the China Internet world, the cleanup of weaker US listed companies continues, with China CGame (Nasdaq: CCGM), a company whose market cap is just $4 million, reportedly being notified of its imminent de-listing from the Nasdaq — reports the company denies (Chinese article). Frankly speaking, I’m surprised this company hasn’t been delisted already, as it has traded below the $1 threshold required for continued listing since August. Such small companies have no business being listed on a big board anyhow, and the sooner this kind of company is purged from the big US exchanges the sooner investor confidence will return to this group of battered companies.

Bottom line: Tencent’s Weixin could soon pose a serious challenge to Sina’s Weibo microblogging service, drawing on its strong features aimed at mobile Internet users.

Related postings 相关文章:

◙ Sina’s Weibo: Growth Engine or Growing Burden? 新浪微博：动力or负担？

◙ Govt’s Microblog Shift Looks Good for Weibo 政府口风转变或有利於新浪微博

◙ Baidu’s Latest Botch: Microblogging 百度“微博”的倒掉

Alibaba Scrambles to Prove High Valuation 阿里巴巴高估值或将作茧自缚

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E-commerce leader Alibaba, scrambling to find financing to buy back a 40 percent stake in itself held by Yahoo (Nasdaq: YHOO), is in a sudden scramble to tell the world why it’s worth $32 billion — a number it helped to float into the market back in September and one which, in my view, seems ridiculously high. In separate news bits from the last day or so, media are reporting the company’s Etao e-commerce search engine has launched a historical pricing search feature (English article), while its popular Taobao consumer-oriented sites have launched social networking functions. (English article) First Etao, which Alibaba hopes to build up as an e-commerce search specialist to one day take on industry titan Baidu (Nasdaq: BIDU). This historical price search function seems like a good idea, as it would make it easier for cost-conscious consumers to track previous prices for items they want to buy. The only problem is that historical prices could soon be the only thing that Etao can show, as several major online retailers, including 360Buy and Dangdang (NYSE: DANG), have blocked their items from being indexed in Etao search results. (previous post) Meantime, the social networking functions being built into Taobao seem like a direct attempt to take on existing SNS sites like Renren (NYSE: RENN) and Sina’s (Nasdaq: SINA) Weibo. While this strategy of building on its industry-leading C2C and B2C platforms to build up SNS sounds interesting, the two areas are relatively unrelated and few if any Chinese web firms have successfully executed similar strategies despite many efforts to leverage popular existing services to build up a new, unrelated ones. This flurry of initiatives seems designed, at least in part, to show the world why Alibaba thinks it may be worth $32 billion. Its only listed unit, Alibaba.com (HKEx: 1688) has a market cap of about $5 billion. That means that its other big assets, which mostly consist of a very successful Taobao Mall and more modestly successful Etao and its Alipay e-payment service, would have to be worth $27 billion collectively, which seems unlikely. Ironically, Alibaba’s high estimation of its own value could ultimately come back to hurt it, as Yahoo apparently seems to want to sell its 40 percent of Alibaba based on that overinflated value. The true amount will come out when a sale finally occurs, but I suspect the final valuation will be closer to $20 billion.

Bottom line: Alibaba is trying to convince the market it is worth $32 billion, but a sale of 40 percent of the company held by Yahoo will probably show a much lower valuation.

Related postings 相关文章:

◙ Alibaba Tests Waters for Yahoo Buyout – Again 阿里巴巴再试水竞购雅虎股权

◙ Alibaba’s Incredible Shrinking Profit Growth 阿里巴巴盈利呈加速放缓趋势

◙ Albaba Faces New Assaults From Merchants, 360Buy 阿里巴巴受到中小商户和京东商城的双重夹攻

 

Qihoo, Vancl Fend Off New Attacks 奇虎、凡客和人人承受压力

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Chinese Web firms continue to come under attack as they stare at a Web bubble that is showing early signs of bursting, with listed companies fending off assaults from short sellers and others struggling to retain employees amid the latest rumors of cash crunches and layoffs. The latest trio to face such assaults include web security software firm Qihoo 360 (NYSE: QIHU), leading clothing retailer and IPO candidate Vancl, and struggling social networking services site Renren (NYSE: RENN), which are all putting out various fires in their ranks. Qihoo, after coming under attack from a small research house called Citron last month (previous post) questioning many of its user numbers, has come under assault again by Citron with more similar allegations. Qihoo has come out with its own statement blasting Citron and explaining to worried investors why all its numbers are accurate. (company announcement) I previously said I wouldn’t be surprised if Citron’s claims are at least partly accurate (previous post), though investors so far seem to be giving Qihoo the benefit of the doubt. The company’s stock still trades at around $18, not far from the level it was at when Citron issued its first report and far higher than the $5 per share that Citron estimated Qihoo shares were worth. Meantime, Vancl is fending off reports from an anonymous blogger that it is facing a cash crunch as it repeatedly delays its planned New York IPO. (Chinese article) Vancl has denied the posts, which apparently carry some credibility due to the recent departure of a company vice president and reports in September that it was cutting 5 percent of its workforce. (previous post) Reports earlier this week that Vancl has just received $230 million in new venture funding (previous post) would seem to indicate the company has ample cash for now, but clearly it is feeling pressure to raise even more as competition rages in China’s e-commerce space. Last but not least there’s Renren, which is reportedly getting ready to offer its shares to all employees to let everyone “enjoy the company’s success.” (Chinese article) The only problem is that Renren’s shares now trade at about $3.50, or one-quarter of their $14 IPO price in May. To me this plan looks like desperation in a bid to retain Renren workers, many of whom are probably having doubts about their company’s future.

Bottom line: Assaults on Qihoo 360, Vancl and Renren are the latest signs of turbulence as China’s Internet bubble starts to burst, with many more to come.

Related postings 相关文章:

◙ Report Takes Wind Out of Inflated Qihoo 奇虎遭遇Citron釜底抽薪

◙ China Internet Bubble Sees Vancl Dressing Down 中国互联网泡沫见证凡客裁员

◙ Renren Results: A Mixed Bag for Everyone 人人网业绩：苦乐参半

NetEase Makes Buzz With Buyback, Pigs 网易回购股票和养猪重大决策或在即

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There’s a mini-flurry of news out about online game specialist NetEase (Nasdaq: NTES), as the normally low-key company generate some buzz, perhaps in the prelude to a bigger announcement about the future of its portal business. None of the latest news is that exciting, but it’s all interesting nonetheless. In perhaps the biggest news, the company has joined many of its US-listed peers in announcing  a share buyback program worth up to $50 million, a relatively small amount but still significant enough to blip onto investor radar screens. (English article) The news helped to lift NetEase shares nearly 3 percent on Wall Street, outpacing the broader market but still a relatively modest move for this kind of company. In a more intriguing piece of news, the company’s soft-spoken founder Ding Lei has said an IPO is in store for his separate pig-raising business next year. (Chinese article) He made the comments in the city of Ningbo at an event centered on agriculture, which seems to be Ding’s relatively newfound passion as he also invests in red wine. The pig venture could actually be an interesting investment proposition, considering China’s love for pork and the country’s recent concerns about food safety. This kind of big publicly-listed pork company could easily become an industry leader, as this kind of massive producer  can better guarantee food quality and safety. In one additional tidbit, NetEase is also reporting on its own news page that it has officially launched a social networking site (SNS) called Lofter. This is probably the least interesting news, as Sina (Nasdaq: SINA) launched a similar product earlier this year to complement its Weibo microblogging service (previous post), and both products will have to compete with more established sites operated by Renren (NYSE: RENN) and Kaixin. From my perspective, this recent flurry of news could be a prelude to a decision on what NetEase plans to do with its Internet portal, which was its main business many years ago but later took a back seat to games that now make up the bulk of its revenue. The company said earlier this year it is aiming to revitalize its portal and spin it off (previous post), and I expect this new flurry of news could presage an announcement soon about the portal’s future.

Bottom line: A recent flurry of news from NetEase could presage an announcement about future plans for its portal business, involving a potential sale or  public listing.

Related postings 相关文章:

◙ NetEase Sharpens Up Messaging in Run-Up to Portal Spin-Off 网易剥离门户网站 再度磨砺电邮服务

◙ NetEase Looks to Reinvigorate Portal 网易似要重振门户

◙ Renren Discovers Microblogging Too Late

News Digest: November 22, 2011

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The following press releases and media reports about Chinese companies were carried on November 22. To view a full article or story, click on the link next to the headline.

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◙ China’s Hony Capital Raising Up To $2.6 Billion: Sources (English article)

◙ Expedia (Nasdaq: EXPE) Buys Renren (NYSE: RENN) Stake in eLong (Nasdaq: LONG) (PRNewswire)

◙ China Telcos Announce October 2011 Subscriber Totals (English article)

◙ Phoenix New Media (NYSE: FENG) Reports Q3 Results (PRNewswire)

◙ Pearson (London: PSON) to Buy English Teaching Firm in China For $155 Mln (English article)