Bottom line: A current round of big fund raising for Chinese tech firms will continue through the first half of the year but then start to fade, leading to a steady drop in valuations for such companies.
51Auto raises $30 mln in new funds
The fund-raising frenzy for Chinese tech companies continues as we head into the end of January, with word of another mega funding worth $100 million for childcare website Beibei.com. At the same time, a used car specialist called 51Auto has landed a nifty $30 million in its own new funding round. But my favorite story from the fund-raising realm comes from a company that has created a PC for dogs, and has found a backer to give it 5 million yuan ($800,000) for the endeavor. Read Full Post…
Internet executives were busy quashing a number of rumors on their microblogs this week, with smartphone sensation Xiaomi trying to stamp out reports of bitter relations with SNS giant Facebook (Nasdaq: FB), and e-commerce giant Alibaba (NYSE: BABA) quashing talk of a major new investment in South Korea. But some of the more interesting chatter focused on the concept of company valuations, and just how widely such valuations can vary for China’s dynamic tech firms.
At the same time, a coming flurry of year-end parties began to kick off in the run-up to the Chinese New Year holiday that’s just a month away. The microblogging realm saw e-commerce giant JD.com (Nasdaq: JD) singing its own praises at the company’s annual party, taking a shot at fast-fading rival Dangdang (NYSE: DANG) in the process. At around the same time, a stumbling Sina Weibo (Nasdaq: WB) also held an annual awards ceremony for notable microbloggers, in its own attempt to remain relevant in the social networking realm. Read Full Post…
Bottom line: Xiaomi’s new more upscale Mi Note phablet should get a strong reception and sell well, drawing on the company’s trendy name and growing base of loyal buyers.
Xiaomi goes upscale with new Mi Note
Smartphone sensation Xiaomi doesn’t seem content to only follow its role model Apple (Nasdaq: AAPL) anymore, and is also taking a page from stumbling sector leader Samsung (Seoul: 005930) with its latest model as it seeks a long-term direction for its products. Of course I’m being just a little facetious with my comparison to Apple, since the only thing Xiaomi shares with the US company is a cool and trendy image. Apple is firmly placed at the top end of the smartphone market, whereas Xiaomi began its life in the mid-range and has steadily moved downmarket since then. Read Full Post…
Bottom line: Disappointing results for fund-raising by Wanda Cinema Line and Kuaidi taxi app show a recent boom in new funding for private Chinese companies may have crested and will wane for the rest of the year.
Kuaidi fund-raising diappoints
The crest of a huge wave of new fund raising for private Chinese firms may have passed, with word that 2 major new deals that should have attracted big investor interest have instead met with weaker-than-expected response. The first of those has seen investors give a lukewarm reception to a domestic IPO for Wanda Cinema Line, the nation’s first major movie theater operator to list. The second has seen taxi app operator Kuadi raise $500 million in a private funding round, which doesn’t sound too bad. But the figure is actually quite a bit lower than Kuaidi’s earlier plan and is also lower than a similar recent fund-raising round for leading rival Didi. Read Full Post…
Bottom line: A new lawsuit against Xiaomi spotlights the lack of premium quality behind its trendy brand, though it could succeed in the shorter term as the leading maker of “fast fashion” smartphones.
Xiaomi sued in Shanghai court
I had to smile on reading about the latest scandal surrounding Xiaomi, which came in a media report on a new lawsuit accusing the smartphone sensation of false advertising claims. This kind of overinflated claim has become a symbol of Xiaomi, reflecting the kinds of hype it regularly generates even as its actual products are described as quite ordinary and even sub-par.
Xiaomi’s hype contrasts sharply with its primary role model, Apple (Nasdaq: AAPL), which has built a hugely loyal following based on products that most users agree are superior to those from its rivals and worth the big premiums that Apple charges. A separate news item shows the hype factor is still enough to attract big-name investors, with word that social networking (SNS) giant Facebook (Nasdaq: FB) previously sought to invest in Xiaomi. Read Full Post…
Bottom line: China’s smartphone market is likely to contract another 10 percent this year, forcing some newer domestic manufacturers out of business, while Huawei’s bid to go upscale in the space is likely to face difficulty.
Huawei posts strong growth on smartphones
New data on China’s booming smartphone sector show the industry crossed a tipping point in 2014, with sales starting to sag after several years of explosive growth. That earlier growth was fueled by companies like Huawei, one of the nation’s largest manufacturers, which has just given some preliminary financial data for 2014. Huawei cited a big jump in smartphone sales as a major factor behind its 20 percent jump in total revenue last year, as strong gains for its consumer products division offset slower growth in its older telecoms networking equipment unit. Read Full Post…
The microblogging realm has been buzzing with posts from tech executives this past week, many of whom were hyping their products at a major gadget show taking place in Las Vegas. But back in China, smartphone sensation Xiaomi was generating its own usual buzz with hints that it may try to go upscale and challenge Apple (Nasdaq: AAPL) and Samsung (Seoul: 005930) more directly with a pricey new offering later this month.
Meantime, the microblogging realm also saw some unusual noise from 2 tech executives who have been mostly quiet in the space for more than a year. The loudest noise came from Charles Zhang, founder of web stalwart Sohu (Nasdaq: SOHU), whose microblog on Sina Weibo (Nasdaq: WB) suddenly came to life as he moved to deflect rumors about massive layoffs at his company. Meantime, Chinese Internet patriarch Lee Kai-fu also made a rare tech-related post on his microblog, breaking a prolonged period of relative silence since he returned to his native Taiwan for treatment of cancer. Read Full Post…
The following press releases and media reports about Chinese companies were carried on January 14. To view a full article or story, click on the link next to the headline.
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User Sues Xiaomi In Shanghai For Making False Claims (Chinese article)
Huawei Revenue Increases 20 Pct on Sales of Higher-End Smartphones (English article)
The following press releases and media reports about Chinese companies were carried on January 13. To view a full article or story, click on the link next to the headline.
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Alibaba (NYSE: BABA) To Invest Over $500 Mln In Indian Startup (English article)
Facebook (Nasdaq: FB) Discussed Possible Investment In Xiaomi – Sources (English article)
Sinopec (HKEx: 386) Plans To List Retail Unit In Hong Kong – Report (English article)
China’s Wanda Cinema Seeks To Raise $203 Mln In Scaled-Back IPO: Sources (English article)
China Domestic Market Cellphone Output Drops 21.9 Pct in 2014 (Chinese article)
Bottom line: Alibaba’s new forays into India and South Korea look like good choices for its first major drive into foreign markets, as such markets are more similar to and have stronger links with China.
Alibaba eyes India investment
It’s been interesting to watch where China’s top Internet firms are placing their bets as they embark on an international expansion to show the world they can compete outside their home market. India is emerging as one destination of choice, with word that e-commerce leader Alibaba (NYSE: BABA) is following smartphone sensation Xiaomi into the market with a major new acquisition target. At the same time, other media reports are saying that Alibaba is also in talks for another major investment in South Korea. Read Full Post…
Bottom line: Huawei could make significant progress in the US smartphone market this year if it devotes more resources to the campaign, while LeTV’s smartphone foray looks necessary but could face difficulty due to stiff competition.
Huawei to step up US smartphone campaign
Rapid developments in the smartphone space are showing no sign of slowing in the New Year, with the latest reports that stalwart Huawei is preparing for a major new push in the US, as online video specialist LeTV (Shenzhen: 300104) prepares its own campaign to enter the crowded arena. Of these 2 news bits, the Huawei one looks like the most significant, as it will see the company make a major play at a US market that is the world’s largest but has been elusive for the Chinese telecoms giant. LeTV previously hinted at its plans to enter the crowded smartphone space, and its relatively late arrival means its endeavor in the crowded field could ultimately fail. Read Full Post…
