Bottom line: A special meeting between 8 Chinese government agencies is a positive sign for Uber and its rivals, indicating Beijing wants to forge a unified national policy to foster the development of hired car service operators.
Beijing meeting sends positive signal for Uber
The brash Uber and its rivals are seeing some encouraging signs in China, with reports that Beijing has convened a special meeting of 8 ministries to clearly define a national policy on these up-and-coming providers of hired car services. At the same time, Uber has broadened its stable of China partners by forming an alliance with homegrown smartphone sensation Xiaomi to promote their products and services in Southeast Asia. Lastly, Uber is also in a slightly troubling headline that spotlights some of risks it will face, as media in southern Guangdong province report that one of the company’s drivers may have been murdered by a customer. Read Full Post…
The following press releases and media reports about Chinese companies were carried on July 24. To view a full article or story, click on the link next to the headline.
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Walmart (NYSE: WMT) Takes Full Ownership of Yihaodian Business in China (Businesswire)
China’s H1 2015 Mobile Internet User Base Hits 594 Mln (English article)
Tsinghua Holdings Chief Says Still in Micron (Nasdaq: MU) Talks, Hopeful on Deal (English article)
China Postal Savings Bank Seeks Strategic Investors in Run-Up to IPO (Chinese article)
Uber Partners With Xiaomi for Smartphone Sales in Singapore (English article)
Bottom line: Huawei’s accelerating smartphone sales reflect its growing momentum in China, and could prompt it to consider spinning off the unit for a potential IPO in its drive to become more transparent.
Huawei News
Smartphones power Huawei resurgence
Growing momentum for its smartphone business has become the driving force behind a resurgent Huawei, which has just reported solid first-half revenue growth that is showing signs of accelerating after a recent slowdown. That’s good news for Huawei, but less promising for domestic rivals like Lenovo (HKEx: 992), Xiaomi and Coolpad (HKEx: 2369), which are struggling for direction in a crowded Chinese smartphone market where global giant Apple (Nasdaq: AAPL) has also shown signs of a recent resurgence.
Huawei hasn’t been too generous in providing financial data for the first half of the year, saying only that revenue jumped by 30 percent to 176 billion yuan ($28 billion). (company announcement; Chinese article) For anyone who tracks the global market, that figure is already more than double the $12.5 billion in first half sales reported by Ericsson (Stockholm: ERICb), Huawei’s leading rival in its traditional networking equipment core area. Read Full Post…
Bottom line: Apple could lose its crown as China’s best-selling smartphone brand by the end of the year, as it faces growing competition from domestic names looking for a bigger slice of the high-end market.
China loses crown as top iPhone market
Global smartphone pioneer Apple (Nasdaq: AAPL) has just released its latest quarterly results, which as usual contain very selective bits of information about the China market that are revealing but make it difficult to draw very strong conclusions. One emerging trend appears to have Apple coming under growing threat from Chinese brands eying the higher end of the market. That’s my quick conclusion based on Apple’s admission that China fell to second place among its global markets in its latest reporting quarter, after briefly grabbing the top spot from the US during the previous quarter.
Of course everything is relative, and Apple still looks quite strong in China with iPhone sales in its Greater China market up an impressive 87 percent in its latest reporting quarter. (English article) But that said, there’s really no reason that the US should have retaken the top spot from China during the quarter, since both countries now receive their new iPhones at roughly the same time. Read Full Post…
The following press releases and media reports about Chinese companies were carried on July 18-20. To view a full article or story, click on the link next to the headline.
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AAFA Calls For New, Transparent Anti-Counterfeit Moves from Alibaba (NYSE: BABA) (press release)
Investors Prepare to Sue Dangdang (NYSE: DANG) Over Low Buyout Offer Price (Chinese article)
Bottom line: Xiaomi’s and Wanda’s moves into financial services look logical but a bit late, and could struggle to compete with earlier initiatives from the likes of Alibaba, Tencent and Baidu.
Xiaomi joins partners in new bank plan
With just about all the major Internet players moving into financial services, it’s been somewhat surprising that smartphone sensation Xiaomi hasn’t joined the trend yet. The same can be said for Wanda Group, which is moving beyond its traditional strength in real estate with plans for a major e-commerce venture and plays in the entertainment space.
That looks set to change soon, however, with separate reports saying both Xiaomi and Wanda are planning moves into China’s financial sector that is being opened to private money after years of domination by big state-owned companies. Xiaomi’s move comes in an announcement from an obscure company called Hebang Corp (Shanghai: 603077), which says the pair are part of a group that plans to open a privately funded bank. Meantime, Wanda’s plan comes in a report citing company chief Wang Jianlin saying he is planning to make some major purchases in the financial services arena. Read Full Post…
The following press releases and media reports about Chinese companies were carried on July 14. To view a full article or story, click on the link next to the headline.
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Chip Maker Tsinghua Unigroup Makes $23 Bln Bid for Micron (NYSE: MU) (English article)
Billionaire Wang Plans for Wanda to Expand Into Finance Industry (English article)
Xiaomi, Partners Planning to Open Privately Funded Bank? (Chinese article)
Bottom line: Xiaomi’s rapidly falling sales growth is the result of many factors that reflect its youth and inexperience, and the company should pause and return to its early strategy or risk seeing its slowdown accelerate.
Xiaomi sales growth slows further
Media are swarming to the latest sales figures from sputtering smartphone sensation Xiaomi, which has just announced first-half data that looks mediocre to downright bad, depending on how you look at it. The company is trying to put a positive spin on the data, saying its first-half sales rose 33 percent from a year earlier. But one media report points out the latest 6-month sales were actually down from the second half of 2014, marking the first-ever sequential decline for this rapidly sputtering smartphone superstar.
This latest data shouldn’t come as a huge surprise, but instead marks a continuation of a steady stream of signals that point to a rapid reversal of fortune for Xioami. I’ve previously said the company and its charismatic CEO Lei Jun are at least partly to blame for the negative publicity they are now receiving, since they built up huge expectations over the last 2 years through a non-stop series of lofty announcements and other high-profile publicity stunts. Read Full Post…
The following press releases and media reports about Chinese companies were carried on July 3. To view a full article or story, click on the link next to the headline.
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iQiyi, Ant Financial Picked to Make First IPOs on New Strategic Industries Board (Chinese article)
Alibaba (NYSE: BABA) Said in Talks for More Seattle-Area Office Space (English article)
Xiaomi Sold 34.7 Mln Smartphones In H1 2015, Up 33 Pct Year-On-Year (English article)
China Unicom (HKEx: 763) Makes 4G Service Available to MVNOs (Chinese article)
Qunar (Nasdaq: QUNR) Receives Final Judgment in Its Dispute With eLong (GlobeNewswire)
Bottom line: Xiaomi’s hiring of a new CFO and entry to Brazil are its latest steps in a gradual transformation to a more western-style global company, in preparation for an IPO that is at least 2 years away.
Xiaomi to launch next week in Brazil
Stumbling smartphone sensation Xiaomi is back to doing what it knows best, namely making headlines with the latest moves in its global expansion and by hiring executives from other high-profile companies. In this case the smartphone high-flyer has just announced its formal plan to enter Brazil, putting it squarely in 3 of the 5 BRICS countries after India and China. The other move looks a bit scripted, and will see a top China executive from Russian high-tech investor Digital Sky Technologies (DST) join Xiaomi as CFO.
The latter piece of news looks slightly strange because DST is one of Xiaomi’s investors, and it would be unusual to do something hostile like stealing a top executive from one of your big backers. Instead, this looks more like a planned move that is relatively common in this kind of situation, which sees big investors supply executives to the companies they back in preparation for eventual IPOs. Read Full Post…
The following press releases and media reports about Chinese companies were carried on July 2. To view a full article or story, click on the link next to the headline.
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Didi Kuaidi Gets Set to Enter US, Challenge Uber – Source (Chinese article)
Former DST China Partner Shou Zi Chew Joins Xiaomi as CFO (English article)
China’s Gamers Aren’t Buying Many Consoles (English article)
TCL (Shenzhen: 000100) Prepares 795 Mln Yuan Share Buy-Back Program (Chinese article)
