This year will go down as one that most US-listed Chinese companies would like to forget, and now outdoor advertising specialist Focus Media (Nasdaq: FMCN) is giving a suitable send-off for 2012 with word that its plan to privatize and de-list is nearing completion. This latest development followed earlier word that one of the investors planning to provide $200 million to help fund Focus Media’s plan had backed out of the deal due to concerns about inadequate returns. (previous post) Now media are reporting that Focus has just signed the last agreement it will need to complete the deal, which will formally be carried out by a company called Giovanna Acquisition Ltd. (Chinese article)
Tag Archives: vipshop
Spring Comes Early For NQ, Vipshop 网秦和唯品会的春天来临
The official start of winter may fast be approaching, but there are growing signs that an early spring has arrived for US-listed China stocks, with Internet security provider NQ Mobile (NYSE: NQ) and e-commerce firm Vipshop (NYSE: VIPS) making headlines that look good for both themselves and the broader sector. NQ, which was formerly called NetQin Mobile, has proven once more that short sellers no longer hold the same kind of influence over these stocks the way they did just 6 months ago, with its shares bouncing back strongly after a recent attack. Meantime, Vipshop, one of only 2 major Chinese firms to list in the US this year, has suddenly become a darling of investors, who have sent its shares to new highs as they scramble to buy a piece of what has quickly suddenly China’s largest listed e-commerce company.
Vancl, Cloudary Take New IPO Steps 凡客与盛大文学或於明年在美上市
New signs are emerging that many Chinese firms waiting to make offshore IPOs won’t be able to take advantage of a sudden window of positive sentiment that has suddenly appeared, and instead will have to target the late first quarter or second quarter of 2013. This sudden window of opportunity has caught nearly everyone by surprise, and few if any companies have completed the necessary preparations needed to make offerings before mid-December. The period from Christmas to Chinese New Year is typically dormant for new offerings due to all the holidays, meaning most new offerings will have to wait until March to try their luck if investor sentiment remains positive for that long.
YY Opens Way For Chinese US IPOs YY为中国企业赴美上市破冰
The prolonged winter for Chinese IPOs in New York may finally be nearing an end, following the modestly successful listing of commercially-focused social media site YY (Nasdaq: YY). I am calling this listing “modestly successful” because it priced at the low end of its range and rose a modest 8 percent on its trading debut, which would be a good but not a great result under most circumstances. But against the broader background of a deep freeze in US investor sentiment towards Chinese companies over the last year and a half, this kind of performance could actually be considered a major breakthrough and triumph for the battered sector.
Vipshop, Renren Search for Profits 唯品会与人人网业绩迥异
Two very different stories are emerging from the latest results of discount online retailer Vipshop (NYSE: VIPS) and social networking site Renren (NYSE: RENN), which are both trying desperately to escape from the loss column amid growing investor impatience with money-losing Chinese web firms. On the one hand, Vipshop’s latest results show it is likely to emerge into the profit column in the final quarter of this year, prompting cheers from investors. But Renren appears to be moving in the opposite direction, reporting a widening loss as China’s ad market worsens. Meantime, new details are also emerging on the latest fund-raising by e-commerce giant Jingdong Mall, which also points to growing investor impatience with money losing web firms.
YY Marches To Market YY开赴市场
The latest signs of a thaw in overseas sentiment toward Chinese stocks is coming today with news that online networking site YY has set a price range for its New York IPO, in what would become only the second major US offering by a Chinese firm this year. At the same time, media are reporting that the US securities regulator is moving closer to a deal with its Chinese peers that will give it better access to the auditing records of US-listed Chinese firms, another major development that should further boost investor confidence.
Qunar Joins Year-End IPO Queue 去哪儿网有望年底赴美上市
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.
Desperate Dangdang Joins TMall 当当网携手天猫 绝望中求生存
A day after announcing the arrival of a new chief financial officer (previous post), we’re getting word that fast-fading e-commerce superstar Dangdang (NYSE: DANG) is preparing to join hands with a major competitor by opening a new storefront on Alibaba’s TMall. The CFO change and now this latest tie-up with a rival all reflect the growing reality that Dangdang is rapidly fading from China’s fiercely competitive e-commerce crowd, and could even become one of its first major victims. One could even say this latest series of moves reflects a certain desperation, as Dangdang tries to reverse a worrisome trend that has seen its losses balloon over the last year.
VIP Shop Soars Past Dangdang 唯品会市值超当当网
After an IPO earlier this year that was a major flop, discount e-commerce company Vipshop‘s (NYSE: VIPS) have quietly jumped in the last few months despite many obstacle it has faced this year. This otherwise low-key company, which has been out of the headlines since its disastrous IPO in March, caught my attention after I read a report saying its market cap has passed that of Dangdang (NYSE: DANG), previously China’s largest publicly listed e-commerce firm. (Chinese article)
Shanda Cloudary IPO Glides Ahead 盛大文学推进IPO计划
The literature unit of online game giant Shanda Interactive seems determined to move forward with its plan for a New York IPO despite a weak investor climate, landing $15 million in new funds from venture investor Orbis as it forges ahead. This kind of late-stage investment is clearly designed to generate some buzz for an offering that looks slightly interesting to me, but may still have limited appeal for the average Wall Street investor worried about recent volatility in US-listed China stocks after a series of accounting scandals last year. This latest investment also seems aimed at setting a valuation for the unit, Shanda Cloudary, again as Shanda Interactive looks to raise as much cash as possible to help pay down its big debt from its own recent privatization. (previous post) Let’s have a look at the actual news, which has Orbis taking a 1.875 percent stake in Cloudary for its $15 million investment, valuing the company at a relatively modest $800 million. (Chinese article) That’s far less than Shanda Interactive was worth when it delisted earlier this year. It’s also about two-thirds of the value of Shanda’s only other listed unit, Shanda Games (Nasdaq: GAME), reflecting the fact that this literature unit may have big potential as a supplier of online literature even though it generates significantly less revenue than Shanda’s core online gaming business. Shanda filed to list Cloudary last year but had to withdraw the plan when market sentiment plummeted. It refiled the plan earlier this year (previous post), reflecting its urgent need for new cash even as broader market sentiment remained weak. The only major Chinese company to make a New York listing so far this year, discount online retailer Vipshop (NYSE: VIPS), was a major failure, and lingering negative sentiment forced one of the year’s only other China IPO candidates, auto rental firm China Auto, to withdraw its offering just before the final pricing last month. (previous post) From my perspective, I’ve always thought the Cloudary IPO looked like an interesting proposition, as online literature is clearly a big growth market as rapidly growing numbers of Chinese mobile Internet users look for interesting things to read on their tablet PCs and smartphones. As an early entrant to this market, Cloudary looked well positioned to become a major player in the space. What’s more, the company surprised the market last month when it announced its first-ever modest profit of about 3 million yuan for the first quarter of this year. Profitability has been rare among the stream of Chinese Internet companies to make IPOs over the last 2 years, so that fact could help ease investor concerns, even though Cloudary’s sudden move into the profit column, while not surprising based on recent trends, also may have been assisted by some accounting maneuvers. Regardless of that, I still do think the company’s potential, its relatively strong income statement and relatively modest valuation could mean it may actually succeed in becoming only the second Chinese Internet company this year to make a New York IPO, providing an interesting investment opportunity for anyone who likes this emerging growth area.
Bottom line: A new round of fund-raising indicates Shanda is moving ahead with the IPO for its Cloudary online literature unit, which could receive moderate investor interest.
Related postings 相关文章:
◙ Shanda Cloudary Wows Investors With Profit 盛大文学利润令投资者惊叹
Commerce Ministry Weighs in on Price Wars 商务部或对电商领域价格战有所行动
You know things are bad when even your national regulator isn’t optimistic, which appears to be the situation based on comments by a top Commerce Ministry official discussing rampant competition plaguing China’s e-commerce sector. Of course, it doesn’t take a genius to know that China’s vibrant e-commerce industry is in the midst of a series of cutthroat price wars, with new promotions being announced almost daily by the likes of Jingdong Mall, also known as 360Buy, Dangdang (NYSE: DANG), Yihaodian and Suning (Shenzhen: 002024). What’s more interesting here is the fact that the regulator is commenting on the situation, which hints that perhaps it may soon make an attempt to ease the situation — a step that would be consistent with China’s past behavior but also one I would strongly advise against. According to media reports, a top Commerce Ministry official for e-commerce, speaking at an event in Beijing this week, noted that the online retailing space has huge growth potential, with total sales set to pass 3 trillion yuan in the country’s current 5 year plan. But he also noted that companies are using the future to subsidize the present, which has led most major players to sink deeply into the red. (Chinese article) That trend has been all too obvious on company financial statements lately, with Dangdang, the biggest publicly traded player, and newly listed discount retailer Vipshop (NYSE: VIPS) both recently reporting big quarterly losses. (previous post) None of this is really news, as these price wars have been going on for nearly a year now. But what’s potentially cause for concern is that the Commerce Ministry is speaking so publicly about its own concern for the sector, since regulators are traditionally supposed to remain low-key and impartial to market developments as long as conditions remain orderly. These comments indicate the ministry may be considering taking steps to cool the competition, perhaps by bringing the major parties together to try and tone down their price wars. Indeed, the very same Commerce Ministry made a similar move last year, when it tried to mediate a patent dispute between telecoms equipment leaders Huawei and ZTE (HKEx: 763; Shenzhen: 000063). (previous post) That attempt looked clumsy and inappropriate and I doubt it yielded any results, and a similar attempt to end the rampant competition in e-commerce would most likely product a similar outcome. It’s somewhat understandable that Beijing regulators might want to prevent this kind of destructive situation from getting out of control, which is clearly the case with e-commerce. But experience in the West has shown that government intervention in these situations usually just makes the situation worse, and instead natural market forces are the best antidotes for these kinds of problems.
Bottom line: The Commerce Ministry needs to remain impartial in ongoing e-commerce price wars and let market forces resolve the situation.
Related postings 相关文章:
◙ Beijing Plays ‘Father Knows Best’ In Huawei-ZTE Spat 中国政府插手华为与中兴之争
