Bottom line: The latest sporting deals by LeTV, Wanda and Alibaba reflect a growing scramble to secure broadcast rights and develop sports channels in China, with more such deals likely in the year ahead.
Alibaba wins NCAA rights for China
A nascent but growing move by China’s top private companies into global sports is in 2 separate headlines, with word of significant new deals involving e-commerce giant Alibaba (NYSE: BABA) and video superstar LeTV (Shenzhen: 300104). The stories also involve the entertainment ambitions of real estate magnate Wang Jianlin, one of China’s richest men, whose Wanda Group has been at the center of 2 major global sports deals over the past year.
The first of the newest deals will see Alibaba bring US college basketball to China through a deal with the National Collegiate Athletic Association (NCAA), the main governing body for US college sports. The other deal has seen LeTV, China’s most valuable provider of Internet video services, raise 800 million yuan ($130 million) for its young sports division. One of the main backers in that new funding round was Wang Jianlin’s son, Wang Shicong. Read Full Post…
The following press releases and media reports about Chinese companies were carried on May 14. To view a full article or story, click on the link next to the headline.
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Chinese Vice Premier Meets Apple (Nasdaq: AAPL) CEO (English article)
Bottom line: JD.com’s latest results show it could reach profitability on an operating basis later this year, while its new tie-up with Tuniu looks like a well-conceived plan that reflects a growing wave of equity tie-ups among Chinese Internet firms.
JD’s loss narrows, ties with Tuniu
China’s second largest e-commerce firm JD.com (Nasdaq: JD) has been busy wowing investors these last few days, starting with its latest quarterly ressults that shows it is making strong progress in moving towards sustainable profits. Meantime, the company has also become the largest individual stakeholder in online travel site Tuniu (Nasdaq: TOUR) through its participation in a deal that saw Tuniu raise $500 million by selling shares to a larger group of investors.
Wall Street greeted the pair of news stories with mildly positive reaction, bidding up JD.com shares by 2 percent after the reports came out. The stock has rallied nearly 50 percent this year and is 77 percent above its IPO price from a year ago, as investors grow more bullish on this company that is China’s biggest challenger to the much larger Alibaba (NYSE: BABA). Tuniu shares also got a nice lift from the news, rising 4.5 percent. Read Full Post…
Bottom line: 58.com’s new purchase of an online job site extends its spree of recent acquisitions and partnerships, which looks like a focused, well-conceived plan that could position it to emerge as a leading Chinese Internet advertising specialist.
58.com gets into jobs space
The savvy online classifieds site 58.com (NYSE: WUBA) is back in the headlines as we close out the week, with word that it’s signed a deal to purchase online job specialist ChinaHR. If true, the deal would mark the latest in a steady stream of acquisitions for 58.com, which looks well positioned to become a truly diversified leader in online classified advertising services.
Such a focused strategy looks much better than the more diversified M&A being practiced these days by China’s largest Internet companies, which are all venturing far beyond the core businesses that brought them their initial success. Of course it’s much easier for companies like 58.com to keep their focus due to their small size. Compared to names like Tencent (HKEx: 700) and Alibaba (NYSE: BABA), which are each valued at around $200 billion, 58.com still has a relatively small market value of about $7 billion. Read Full Post…
Bottom line: WuXi PharmaTech’s privatization will be followed by at least 3-4 more similar buy-outs this year for US-traded Chinese stocks, including a 50-50 chance that Renren will attempt a privatization by mid-year.
Wuxi Pharma gets buy-out bid
I’m beginning to feel like I should start a betting list of Chinese candidates that may de-list from New York, following word that unappreciated drug maker WuXi PharmaTech (NYSE: WX) has become the latest company to announce a management-led buy-out. At the same time, dying social networking (SNS) site Renren(NYSE: RENN) has also announced results of its own recent Dutch auction-style share buyback plan, which also hints that it could become the next company to attempt a privatization. Read Full Post…
Bottom line: Baidu could be entering a period of profit erosion that will put pressure on its stock, while Tencent’s latest investment hints it could be preparing to roll out a global gaming platform by the end of this year.
Baidu profit drops
China’s Internet “Big 3” of Baidu (Nasdaq: BIDU), Alibaba (NYSE: BABA) and Tencent (HKEx: 700) are often in the news on any given week, but we’re seeing a rare instance where all 3 are in the headlines on this final work day before the May 1 break. Baidu is leading off the BAT headlines with the release of its latest quarterly earnings that are led by a rare profit decline due to soaring expenses.
Rising costs may have also been a factor in the Alibaba news, which has the company freezing its global headcount for the rest of the year as it tries to rationalize itself after a period a breakneck growth. Last but not least is Tencent, whose relatively large purchase of a stake in a US gaming firm hints at the direction it will take in its overseas expansion. Read Full Post…
The following press releases and media reports about Chinese companies were carried on April 30. To view a full article or story, click on the link next to the headline.
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Bottom line: Sina stands a 50-50 chance of getting a takeover bid within the next year, as suitors eye it for its low valuation, well-respected name and controlling stake of Weibo.
Sina anticipating suitor?
Leading web portal Sina (Nasdaq: SINA) has become one of China’s perennial Internet underperformers, leading to occasional talk that it might become a takeover target for a larger, better-run peer. Now Sina has just announced its renewal of a “poison pill” plan designed to prevent such a hostile takeover. This particular move looks like a formality rather than indicator of a looming takeover bid, since Sina launched the original plan 10 years ago and perhaps it is now is now set to expire. But the fact that Sina is not only renewing the plan, but doing so in a very public way, indicates it may feel it could become a takeover target in the current hot climate for Chinese Internet M&A. Read Full Post…
Bottom line: Tencent, Baidu and other Chinese Internet giants should rein in their appetite for new debt in anticipation of an economic slowdown that could sharply dampen their growth.
Tencent doubles bond program to $10 bln
Social networking (SNS) giant Tencent (HKEx: 700) shattered Chinese Internet records late last week when it said it would double the size of its already-large bond program to a massive $10 billion, becoming one of the biggest such programs ever for a private Chinese company. The move is part of a broader trend that has seen Chinese Internet firms raise billions of dollars over the last 2 years through a combination of bond offerings and IPOs, tapping strong investor appetite for their high-growth story.
Such sums would have been unthinkable just 2 or 3 years ago, even though China’s economy was growing much faster then and so were the profits and revenues at companies like Tencent. Floating so much debt is normally not a problem in such boom times, and is often used by strong companies like Tencent to fund their growth. Read Full Post…
The following press releases and media reports about Chinese companies were carried on April 28. To view a full article or story, click on the link next to the headline.
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iPhone Sales, China Boosts Apple (Nasdaq: AAPL); Shares Up Modestly (English article)
Lenovo (HKEx: 992) Eyes 100 Mln Cellphone Sales In New Fiscal Year – CEO (Chinese article)
Huawei CEO Says Chinese Cybersecurity Rules Could Backfire (English article)
Trina (NYSE: TSL) Signs Agreement In Hefei Zone for 300 MW DG Solar Power Plant (PRNewswire)
The following press releases and media reports about Chinese companies were carried on April 25-27. To view a full article or story, click on the link next to the headline.
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Apple (Nasdaq: AAPL) Wins Siri Software Patent Appeal In China (English article)
Tencent (HKEx: 700) Doubles Medium-Term Note Program To $10 Bln (HKEx announcement)
Coca-Cola (NYSE: KO) To Acquire Chinese Protein-Drink Line For $400 Mln (English article)
Xiaomi Announces New 4i Model For India, Not Available In China (Chinese article)
Baidu (Nasdaq: BIDU) Sues Sogou for Hijacking Traffic Via IME (English article)
