The following press releases and media reports about Chinese companies were carried on April 2. To view a full article or story, click on the link next to the headline.
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China To Punish Tencent, Youku Tudou, Other Video Sites For Pornography (English article)
The following press releases and media reports about Chinese companies were carried on March 31. To view a full article or story, click on the link next to the headline.
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Tencent (HKEx: 700) Dismisses New WeChat Membership System As Rumors (Chinese article)
Xinhua, AP presidents Discuss Cooperation In New Media Era (English article)
Jiayuan.com (Nasdaq: DATE) Engages Financial Adviser For Privatization Bid (PRNewswire)
Alibaba (NYSE: BABA) In Digital Distribution Deal With Music Rights Group BMG (English article)
Minsheng Bank (HKEx: 1988) Announces Annual 2014 Results (HKEx announcement)
Bottom line: Alibaba, Tencent and Ping An’s online insurance joint venture should easily find backers for its first major fund-raising, and could even exceed its $8 billion valuation target due to strong demand.
Zhong An targets $1 bln in new funds
This year’s list of major private funding raising by high-tech firms continues, with word that an online insurance joint venture involving 2 of China’s biggest Internet names is seeking to raise a hefty $1 billion in its first funding round. This particular venture certainly has a strong pedigree, as it’s backed by Alibaba (NYSE: BABA) and Tencent (HKEx: 700), China’s 2 leading Internet companies with a combined market value of nearly $400 billion. The pair are joined in the venture by Ping An (HKEx: 2318; Shanghai: 601318), China’s second largest insurer and also one of the most aggressive players in its space. Read Full Post…
Bottom line: Chinese Internet stocks are likely to see a soft landing after a correction period in the first half of the year, with leaders and high-growth second tier players likely to experience a rebound in the second half.
China Internet stocks headed for soft landing
A new scorecard is casting a worrisome spotlight on the bumper crop of Chinese Internet firms that listed last year, pointing out that more than half are now trading below their IPO prices. The sagging prices continue a trend that I pointed out in my IPO scorecard at the end of last year. That trend has seen shares of many New York-listed Internet firms come back to their offering levels or lower as investors pocketed profits from strong post-IPO rises. (previous post) But rather than label this a reason for worry, I would argue instead this broader wave represents a rationalization of the market that will ultimately see the best-performing names rewarded and the money losers languish. Read Full Post…
The following press releases and media reports about Chinese companies were carried on March 25. To view a full article or story, click on the link next to the headline.
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Alibaba, Tencent, Ping AnInsurance JV Seeks $1 Bln Series A Funding (English article)
Bottom line: New smart car initiatives from Tencent, LeTV and Baidu are all likely to struggle, with Baidu most likely to be first to drop out of this race to copy Internet giant Google.
LeTV car to debut at Shanghai Auto Show
China is quickly living up to its copycat reputation in the smart car space, with the latest word that Tencent (HKEx: 700) will enter the business in a tie-up with Taiwanese contract manufacturing giant Foxconn (HKEx: 2038). That pair are following Google (Nasdaq: GOOG) into the area, but they certainly aren’t the first Chinese to mimic the world’s largest Internet company.
That distinction would probably go to Chinese Internet search leader Baidu (Nasdaq: BIDU), which last year announced its own smart car initiative that was also back in the headlines this week as CEO Robin Li discussed the plan. Yet another similar initiative is also in the headlines today, as online video sensation LeTV (Shenzhen: 300104) discussed its own plans to show off its first smart car at the Shanghai auto show next month. Read Full Post…
The following press releases and media reports about Chinese companies were carried on March 24. To view a full article or story, click on the link next to the headline.
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Bottom line: Sogou is likely to list in the second half of the year, but will get a lukewarm reception from investors due to its status as a solid second-tier player without hopes of ever becoming a sector leader.
Sogou eyes H2 IPO
Some 3 months into the New Year, we’re still waiting for the first New York IPO by a Chinese Internet company after a blockbuster year in 2014. Now we’re getting word of a listing that could come in the second half, with news that portal stalwart Sohu (Nasdaq: SOHU) is planning an IPO for its decade-old Sougou search engine in that time frame.
The offering looks very so-so, as Sougou has failed to gain much traction despite its status as one of China’s oldest search players. More broadly speaking, we can probably expect to see more of this kind of ho-hum IPO from second-tier Chinese Internet firms for the rest of the year, since the most exciting players listed during last year’s surge in new offerings. Read Full Post…
Bottom line: Many of Alibaba’s older stakeholders are likely to sell some or all of their shares after their lock-up period ends, driving the stock down to or even below its IPO level over the coming months.
Alibaba lock-up period ends
Top managers at China’s Alibaba (NYSE: BABA) are almost certainly watching their company’s stock with acute angst this week, even as business continues as usual with word of the e-commerce leader’s latest overseas expansion into Korea. The angst is the direct result of an end to the lock-up period for Alibaba’s stock, which could technically flood the market with up to 340 million shares that were forbidden from trading for the first 6 months after its record-breaking $25 billion IPO.
Put differently, all of those shares would be worth about $29 billion at Alibaba’s current price, accounting for more than one-tenth of its total market capitalization of about $210 billion. The shares officially become eligible for trading when the lock-up period ends on Wednesday, March 18, which is exactly 6 months after the shares made their trading debut on the New York Stock Exchange. (Chinese article) Read Full Post…
Bottom line: Qihoo’s new smartphones, including its self-developed mobile OS, could perform well due to its strong software development record, potentially bringing some excitement back to its stock later this year.
Qihoo prepares mobile OS
I don’t usually have lots of positive things to say about Qihoo 360 (NYSE: QIHU), but I’ll admit I’m quite intrigued by the latest word that the security software specialist is preparing to roll out its own mobile operating system (OS). The new system, to be called 360 OS, will be based on Google’s (Nasdaq: GOOG) popular Android OS, so in that regard it will vie with many other Android variations in the market. But regardless of that, I would expect this new OS could quickly become a major player in the fiercely competitive space, drawing on Qihoo’s record as one of China’s savviest and oldest software and Internet product developers. Read Full Post…
Bottom line: Shares of E-House and Leju are likely to trade flat to downward over the next year due to continuing pressure on China’s real estate market, while Renren is likely to get bought out over that period.
Property downturn puts pressure on Leju, E-House
The latest earnings from 2 of China’s 3 top listed online real estate firms reflect the challenges facing the sector, with soaring costs undermining profits at both E-House (NYSE: EJ) and its affiliated Leju (Nasdaq: LEJU). Meantime, a separate earnings report from fast-fading social networking site Renren (NYSE: RENN) shows the former Internet superstar is fast becoming worthless as it sells off assets and its core SNS business shrinks. I expect the end will come soon for Renren, probably in the next 12 months, since the company’s largest asset now is its big cash pot that could attract a buyer who simply wants the money. Read Full Post…
