The following press releases and media reports about Chinese companies were carried on November 1. To view a full article or story, click on the link next to the headline. ══════════════════════════════════════════════════════
eBay (Nasdaq: EBAY) to Re-enter China B2C Market With Xiu.com – Source (Chinese article)
New Extension Likely For CNOOC (HKEx: 883) Nexen (Toronto: NXY) Review – Sources (English article)
HiSoft (Nasdaq: HSFT) Reaffirms Q3 and Full Year 2012 Guidance (PRNewswire)
Jingdong Mall, LeTV (Shenzhen: 300104) Partner on Video Shopping (English article)
Sohu (Nasdaq: SOHU) Video CEO Denies Timetable For IPO (Chinese article)
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.
The year 2012 will easily go down as the worst for New York IPOs by Chinese firms since the global financial crisis, though there’s still some hope we could see one or 2 offerings in the next couple of months by cash-starved Chinese firms. A social media website named YY surprised many when it made a preliminary New York IPO filing earlier this month (previous post), and now video and music sharing site Xunlei is also emitting signals that indicate a filing could be near for its own stalled public offering.
The following press releases and media reports about Chinese companies were carried on October 20-22. To view a full article or story, click on the link next to the headline. ══════════════════════════════════════════════════════
Bank of China (HKEx: 3988) Said to Plan 23 Billion Yuan Sale of Sub-Debt (English article)
Sohu (Nasdaq: SOHU) Completes Video Unit Spin-Off in Strong IPO Signal (Chinese article)
NetEase (Nasdaq: NTES) Microblog User Base Exceeds 260 Mln (English article)
China’s Finance Ministry Invests 4 Bln Yuan in National Cable Operator (English article)
China Unicom (HKEx: 762) Adds 3.18 Mln Users in September (Chinese article)
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.
In a theme that is rapidly gaining momentum, yet another US-listed Chinese firm has announced a new privatization bid to capitalize on valuations that have been pushed to rock-bottom levels amid a broader investor confidence crisis. The newest management-led buyout offer from 7 Days Group (NYSE: SVN), the smallest of China’s 3 publicly listed budget hotel operators, follows a string of similar moves that have seen other US-listed Chinese companies, including Shanda Interactive and Focus Media (Nasdaq: FMCN), make similar moves. So perhaps the more interesting question is: who are the most likely companies to launch similar privatization bids, as investors can clearly make some quick money if they can answer this question correctly.
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)
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)
I’ve been writing about China’s media industry long enough now to know that a blossoming love affair with Hollywood might be too much too quickly, and new comments from the TV and film regulator appear to hint that a crackdown or at least a slowdown could be looming for this fast emerging relationship. If it comes, such a crackdown would hardly be a new thing, as China has twice before signaled it was preparing to open its media to foreign investment, only to quickly slam on the brakes after the big foreign players got too aggressive.
Update: A short time after I issued this article, Tencent released its formal plan to issue $600 million worth of bonds. The notes will mature in 2018 and carry an interest rate of 3.375 percent (company announcement)
Internet leader Tencent (HKEx: 700) is taking a dip into the corporate bond market, an interesting move that should not only test investor aippetite for a new kind of financial product from China’s Internet space, but may also hint at the company’s future M&A plans as it explores a potential bid for Activision Blizzard (Nasdaq: ATVI). Longtime China Internet watchers may recall that it’s been quite a long time since any companies from this space have issued corporate debt. Veteran players Sina (Nasdaq: SINA), Sohu (Nasdaq: SOHU) and NetEase (Nasdaq: NTES) all issued bonds shortly after becoming profitable about a decade ago, but none really needed the money and largely retired the fund-raising method after that.
The proposed marriage between Youku (NYSE: YOKU) and Tudou (Nasdaq: TUDO) looks like a done deal, with shareholders of both companies approving the union at separate meetings on the same day. (Youku announcement; Tudou announcement) So now the question becomes: what does the union mean for the longer term development of the new company, Youku Tudou, and also what does the formation of this new industry leader mean for other major players? In a nutshell, I honestly don’t think the future looks very bright for anyone, due to both individual company issues and broader industry issues as well.
The year 2012 will easily go down as the worst for New York IPOs by Chinese firms since the global financial crisis, though there’s still some hope we could see one or 2 offerings in the next couple of months by cash-starved Chinese firms. A social media website named YY surprised many when it made a preliminary New York IPO filing earlier this month (
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). (
In a theme that is rapidly gaining momentum, yet another US-listed Chinese firm has announced a new privatization bid to capitalize on valuations that have been pushed to rock-bottom levels amid a broader investor confidence crisis. The newest management-led buyout offer from 7 Days Group (NYSE: SVN), the smallest of China’s 3 publicly listed budget hotel operators, follows a string of similar moves that have seen other US-listed Chinese companies, including Shanda Interactive and Focus Media (Nasdaq: FMCN), make similar moves. So perhaps the more interesting question is: who are the most likely companies to launch similar privatization bids, as investors can clearly make some quick money if they can answer this question correctly.
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. (
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 . (
I’ve been writing about China’s media industry long enough now to know that a blossoming love affair with Hollywood might be too much too quickly, and new comments from the TV and film regulator appear to hint that a crackdown or at least a slowdown could be looming for this fast emerging relationship. If it comes, such a crackdown would hardly be a new thing, as China has twice before signaled it was preparing to open its media to foreign investment, only to quickly slam on the brakes after the big foreign players got too aggressive.
