Bottom line: NetEase’s withdrawal from microblogging represents a broader decline for the overall sector, and is likely to put downward pressure on Weibo shares over the medium to longer term.
NetEase microblog withdrawal looks bad for Weibo
Media reports that web stalwart NetEase (Nasdaq: NTES) will finally shutter its microblogging service don’t come as a big surprise, since it’s been years since anyone has posed a challenge to the dominance of sector leader Weibo (Nasdaq: WB). But what does come as a slight surprise was the reaction to the news in Weibo’s share price. One would normally expect Weibo shares to rally on news of a competitor’s demise, but instead Weibo’s shares actually fell nearly 4 percent in the latest trading session. Read Full Post…
Bottom line: Shares of Alibaba could be due for a pull-back as investors become aware of its aggressive spending and shrinking profits, which could benefit the more conservative Tencent and Baidu.
Alibaba wows Wall Street with mediocre results
Everyone is buzzing about the maiden earnings report from newly listed e-commerce giant Alibaba (NYSE: BABA), which shows strong revenue growth and rapidly shrinking profits. So rather than repeat everyone else by simply reviewing the numbers, I’ll take this occasion to compare the Alibaba figures with those from leading rivals Tencent (HKEx: 700) and Baidu (Nasdaq: BIDU), often called the Internet “big 3” of China and increasingly referred to collectively by the name BAT. Read Full Post…
Bottom line: Sohu’s latest results hint at lingering weakness in online games and Internet advertising, while online video also continues to suffer amid a regulatory crackdown.
Sohu looks weak in games, advertising
The latest results from diversified web portal Sohu (Nasdaq: SOHU) are quite a mixed bag, with its lackluster search business finally showing some promising signs of accelerating growth, even as its core advertising and online gaming businesses sputter. Then there’s its money-losing online video business, which is facing a growing number of hurdles due to a regulatory crackdown, just as the unit looks set to make a minor acquisition that probably won’t add very much to its future prospects. Read Full Post…
The following press releases and media reports about Chinese companies were carried on November 1-3. To view a full article or story, click on the link next to the headline.
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Qatar Sells Down AgBank (HKEx: 1288) Stake To 17 Pct Of H-Shares From 22.5 Pct (HKEx announcement)
SouFun (NYSE: SFUN) Signs Investment, JV Agreements With Topspur (PRNewswire)
Xiaomi Poaches Spotify’s Donovan Sung To Lead Int’l Product Development (English article)
Tencent (HKEx: 700), Konka (Shenzhen: 000016) Partner on TV Gaming (English article)
Danone Bolsters China Presence With $550 Mln Yashili (HKEx: 1230) Milk Deal (English article)
The near-monopoly held by Tencent’s (HKEx: 700) WeChat in China’s mobile messaging space could soon get a fresh shot of competition, with word that e-commerce giant Alibaba (NYSE: BABA) was in talks for an alliance to revive China Mobile’s (HKEx: 941; NYSE: CHL) fast-fading Fetion text messaging service. Such a powerful tie-up could take direct aim at the current stranglehold on the market held by WeChat, which now has more than 400 million active users and has become an indispensable communications tool for many. Read Full Post…
Beijing’s notorious smog was thick in the blogosphere this past week, with tech executives sending out a flurry of cautionary messages as the city held its annual marathon. This particular issue shines an important spotlight on the fact that many of China’s top tech firms are clustered in the Chinese capital, running the range from search leader Baidu (Nasdaq: BIDU) to top portal Sina (Nasdaq: SINA) and PC giant Lenovo (HKEx: 992).
Meantime, other interesting buzz in the blogosphere was coming from security software specialist Qihoo 360 (NYSE: QIHU), which finally admitted defeat in its anti-monopoly lawsuit against Tencent (HKEx: 700) after the case was denied a final appeal by China’s highest court. One final interesting tidbit came from several executives at Lenovo, which unleashed a flurry of buzz after the company’s announcement of vague plans to set up a separate unit dedicated to smart devices. Read Full Post…
Leading telco China Mobile (HKEx: 941; NYSE: CHL) has just released its latest quarterly results that show profits continue to sag by about 10 percent, continuing a theme from the past year. But the figure that’s catching attention in the headlines is the company’s top line revenue, which has fallen for the first time ever in the latest quarter. The revenue drop isn’t all that surprising and comes about a year after China Mobile’s profits first began to decline. But perhaps more worrisome is the prospect that revenue could continue to drop for years until China Mobile finds a way to win back some of the business that is rapidly flowing to third-party service providers like Tencent (HKEx: 700) and a new batch of mobile virtual network operators (VNOs). Read Full Post…
The end has finally come for group buying site LaShou, though this former Internet superstar survived for far longer than I ever imagined it would before its newly announced acquisition by conglomerate SanPower Group, which owns a number of online and offline retail brands. Of course this acquisition doesn’t mean the actual death of LaShou, and it’s quite possible the company could still make a comeback under its new ownership. But its acquisition marks one of the final big consolidation moves for a group buying sector that saw explosive growth 3 years ago, followed by a major correction that saw most companies either close or get acquired. Read Full Post…
Wanda Group is already one of China’s leading commercial property owners, and now it’s taking aim at the fast-growing travel sector with word that it’s purchased a major travel agency in affluent Zhejiang province. There’s no financial detail on the deal, but the purchase should help to bolster Wanda’s position that has already made it China’s leading travel company just 2 years after its formation. The group could ultimately become one of China’s leading integrated travel and leisure companies if it eventually lists, providing an attractive alternative to the crowded field of publicly listed firms like online travel agent Ctrip (Nasdaq: CTRP) and leading hotel operator Home Inns (Nasdaq: HMIN). Read Full Post…
Supreme Court rules for Tencent in antitrust lawsuit
Big foreign multinationals may be feeling the heat from a recent string of anti-monopoly investigations, but Chinese Internet firms won’t have to face such worries anytime soon. That’s the latest message coming from Beijing, with word that China’s Supreme People’s Court has ruled in favor of social networking giant Tencent (HKEx: 700) in a long-running lawsuit claiming the company controlled a monopoly in the instant messaging market. I originally sided with Tencent when the case was filed 3 years ago by security software specialist Qihoo 360 (NYSE: QIHU), because I felt the lawsuit looked retaliatory for an unrelated suit between the pair at that time. But much has changed since then, most notably the meteoric rise of Tencent’s wildly popular WeChat mobile instant messaging service that has become an indispensable tool for millions of people in China, myself included. Read Full Post…
The following press releases and media reports about Chinese companies were carried on October 17. To view a full article or story, click on the link next to the headline.
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Ant Financial Set Up With Alibaba Assets Alipay, Yu’ebao And Others (Chinese article)
Spring Airlines To Become First Public Low-Cost Carrier With IPO By Year End (Chinese article)
Internet Giants’ Brawl Ends With Qihoo (NYSE:QIHU) Final Loss To Tencent (English article)
McDonald’s (NYSE: MCD) Hits Snag In China Expansion With Franchisee Dispute (Chinese article)
