Bottom line: China’s overall Internet growth will continue to slow as the market starts to become saturated, with messaging and other mobile services continuing to steal share from microblogging and video operators.
Microblogging decline bites Weibo
A newly released annual government report on China’s Internet is full of good news for the online business community, with most sectors posting double-digit growth as overall penetration neared the 50 percent mark. But a few sectors stood out as distinctive losers in the report from the China Internet Network Information Center (CNNIC), led by the microblogging space that saw a sharp decline in users.
That’s not too surprising due to departures or pull-backs in the space last year by big names like NetEase (Nasdaq: NTES) and Tencent (HKEx: 700), though it certainly doesn’t bode too well for sector giant Sina Weibo (Nasdaq: WB). Another relative loser was online video, which posted only tiny growth last year as the sector came under regulatory assault aimed at reining in companies like Youku Tudou (NYSE: YOKU) and Baidu’s (Nasdaq: BIDU) iQiyi. Read Full Post…
The following press releases and media reports about Chinese companies were carried on December 16. To view a full article or story, click on the link next to the headline.
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Qihoo (NYSE: QIHU) Set To Buy Smartphone Maker For 5 Bln Yuan – Source (Chinese article)
Xiaomi Makes 1.266 Bln Yuan Investment In Midea (Shenzhen: 000333) (Chinese article)
Tuniu (Nasdaq: TOUR) Wins $148 Mln From Hony, JD.com, Ctrip (Chinese article)
China Unicom (HKEx: 762) Drops to Eight-Month Low As Manager Probed (English article)
Childcare E-commerce Site ‘Miyabaobei’ Secures $60 Mln Series C Funding (English article)
The following press releases and media reports about Chinese companies were carried on December 13-15. To view a full article or story, click on the link next to the headline.
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Tesla’s (Nasdaq: TSLA) China President Resigns After Less Than 9 Months (English article)
BAIC Motor, Investors Said Poised To Raise $1.4 Bln In IPO (English article)
Tencent-Backed (HKEx: 700) Private Bank Approved To Begin Business (Chinese article)
Xiaomi Issues Statement Confirming Sales Suspension In India (Chinese article)
Ctrip To Spend $15 Mln To Boost 3 Pct Stake In Tuniu (Nasdaq: TOUR) – Source (Chinese article)
Bottom line: Qunar’s ballooning losses reflect its aggressive spending on market share, which will turn off investors and pressure its stock until it shows signs of moving towards profitability.
Qunar losses swell past revenues
My third-quarter Chinese earnings season officially ends today with the newly issued results of online travel agent Qunar (Nasdaq: QUNR), whose losses appear to be spiraling out of control. Frankly speaking, I could never really understand why investors were so attracted to this company, whose main asset seems to be its association with leading Chinese search engine Baidu (Nasdaq: BIDU), which also happens to be Qunar’s majority stakeholder. Read Full Post…
Bottom line: Ctrip’s explanation for a recent major share sale by top executives looks reasonable and shouldn’t be cause for concern, while Tuniu won’t gain any short-term advantage from its new war with Tongcheng.
Ctrip execs invest in cruising
A couple of news bits are cruising through the online travel space this first week, with industry leader Ctrip (Nasdaq: CTRP) and recently listed Tuniu (Nasdaq: TOUR) both engaged in new strategic moves. In the former case, Ctrip is explaining a recent wave of selling of its shares by top company executives, saying the move was prompted by their need for cash for a new strategic investment. The latter case has Tuniu reportedly engaged in an entertaining behind-the-scenes battle with unlisted rival Tongcheng for the lucrative and fast-growing overseas travel market. Read Full Post…
In the absence of big company news so far this week, I’ve decided tolook at the scorecard for the flood of technology IPOs over the last 12 months and what it might say about what’s ahead into next year. The record so far looks quite good in general, especially for companies that made a flurry of New York offerings at the end of last year and whose shares have mostly doubled or more since then.
But one notable exception to the trend is mobile games, as 2 of the 3 major players to make recent listings are now squarely in negative territory. That doesn’t bode well for a 3 upcoming similar listings, 1 in New York and 2 in Hong Kong, which appear to be stalling due to the cool investor sentiment. 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…
A new management shakeup in the top ranks of eLong (Nasdaq: LONG) didn’t excite investors too much, but hints that something is happening behind the scenes at this online travel laggard controlled by US giant Expedia (Nasdaq: EXPE). The shakeup has seen eLong’s CFO and COO both resign, though the company’s CEO is staying in his current position, at least for now. Rumors circulated earlier this year that a buyout could be coming for eLong from sector leader Ctrip (Nasdaq: CTRP), though such a deal never came. Read Full Post…
China’s broader domestic travel market may be quickly getting saturated, but that hasn’t stopped leading online travel agent Ctrip (Nasdaq: CTRP) and global hotel giant Starwood (NYSE: HOT) from seeking out new investment opportunities in more niche-focused areas. News involving the former will see Ctrip purchase a cruise liner from global giant Royal Caribbean (NYSE: RCL) to capitalize on the rising popularity for ocean cruises among Chinese vacationers. The latter news bit will see Starwood, owner of the Westin and Sheraton hotel brands, open an ambitious 4 new resorts on the tourist-friendly Hainan island over the next 5 years. Read Full Post…
A look at the latest earnings from online travel agent Qunar (Nasdaq: QUNR) and online classified ad site 58.com (NYSE: WUBA) made me feel like I was living in a parallel universe where everything was the opposite of what it should be. Qunar, China’s second largest online travel agent backed by leading search engine Baidu (Nasdaq: BIDU), saw its loss soar 10-fold as its costs grew far faster than revenue. And yet investors welcomed the results, bidding up the company’s stock by 6 percent. Conversely, the profitable 58.com saw its earnings more than double, and yet it’s stock tanked nearly 8 percent on the report. Read Full Post…
Separate reports about a new IPO by one company and potential exit from the Nasdaq by another are reflecting the mixed feelings that Chinese firms have for New York, where public listings can bring both prestige and also headaches. In the new listing category, media are reporting that yet another mobile game developer called iDreamSky has just made its first public filing for a New York IPO to raise up to $110 million. Meantime, other media are reporting that veteran online travel service eLong (Nasdaq: LONG) could be gearing up for a buy-out by much larger rival Ctrip (Nasdaq: CTRP). Read Full Post…
