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Tag Archives: Yahoo Japan

INTERNET: Alibaba Eyes Japanese Imports, In Promising New Direction

By newsdoug on June 5, 2015

Bottom line: Alibaba’s potential new venture to bring Japanese imports to China looks like a smart move that plays to Beijing’s desire to boost consumer spending, and could serve as a template for similar import-related tie-ups.

Alibaba talks tie-up with Yahoo Japan

A potential major new tie-up between Alibaba (NYSE: BABA) and Yahoo Japan (Tokyo: 4689) aimed at bringing more Japanese imports to China looks full of promise, providing a possible major new growth source for the Chinese e-commerce giant. Such a tie-up would be especially exciting because it would bring together 2 of the largest e-commerce companies from the world’s second and third largest economies. It would also receive strong support from Beijing, which is rapidly dismantling many import barriers as it tries to boost consumer spending to prop up a slowing Chinese economy. Read Full Post…

News Digest: May 30-June 2

By newsdoug on June 1, 2015

The following press releases and media reports about Chinese companies were carried on May 30-June 2. To view a full article or story, click on the link next to the headline.
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IMAX China Files For HK IPO, Betting on Booming Film Demand (English article)
Ctrip (Nasdaq: CTRP) Says Outage Due to Staff Error, Not Hack (English article)
Solarworld (Frankfurt: SWVK) Gains EU Probes of Possible China Duty Evasion (English article)
Alibaba (NYSE: BABA), Yahoo Japan (Tokyo: 4689) To Open Tmall Japan Pavillion (Chinese article)
Vipshop (NYSE: VIPS) Comes Under New Short Seller Attack, Shares Drop 6 Pct (Chinese article)

Lenovo Sister Firm Looks to Japan, Taobao Quits “围城”日本：弘毅想冲进去淘宝想撤出来

By newsdoug on April 9, 2012

Hony chases Elpida Japan’s foreign minister was in China yesterday on an official visit, so I thought I’d start the week with 2 items on Chinese companies in the notoriously difficult Japanese market, including an interesting move into the chip sector by a sister company of PC giant Lenovo (HKEx: 992) and a hasty retreat by e-commerce giant Alibaba. Let’s start with the more intriguing of the items, which is seeing Hony Capital, the high-profile technology investment arm of Lenovo parent Legend Group, pairing with US private equity giant TPG Capital to make a planned bid for bankrupt memory chipmaker Elpida (Tokyo: 6665), according to a Japanese media report. (English article) If they made a bid, the pair would join 2 other suitors, Korea’s Hynix Semiconductor (Seoul: 000660) and US-based Micron (NYSE: MU) in pursuing the Japanese company that controls 12 percent of the global DRAM market. Frankly speaking, Hynix and Micron look like much better suitors for Elpida, as both are competitors that could consolidate the Japanese company into their own operations for an industry that has been in desperate need of consolidation for the last 5 or 6 years. But the Hony-TPG pairing does include one interesting element, namely the Lenovo connection. Lenovo itself has been trying to break into Japan for years now, following its 2005 purchase of IBM’s PC assets that included sales and distribution networks in Japan. More recently Lenovo has taken over the PC assets of NEC (Tokyo: 6701), and has discussed setting up a manufacturing base in Japan. (previous post) A successful bid for Elpida could theoretically provide Lenovo with a strong DRAM supply for its Japan-based business. Still, I would be wary of such a purchase since Lenovo has little or no experience in running a DRAM operation, and it’s unclear what kind of savings it could achieve by combining its Japanese PC business with Elpida’s money-losing memory business. Moving on, the other Japanese news bit has seen Alibaba’s Taobao service officially shutter its Japanese shopping channel that was operating on a platform run by Yahoo Japan (Tokyo: 4689). (Chinese article) Alibaba made a relatively low-key move into Japan several years ago, seeking to take advantage of ties to one of its earliest investors, Japan’s Softbank (Japan: 9984), which is also the main investor in Yahoo Japan along with Yahoo (Nasdaq: YHOO) itself. Clearly the market hasn’t proven as easy to penetrate as Alibaba had hoped, and the media report even says that sales on the Taobao Japan channel were below the company’s targets. This withdrawal doesn’t surprise me at all, as Chinese firms of all types have had a difficult time in the Japanese market, which has become famous for its impenetrability by foreign firms. The other big Chinese web firm trying to crack the market is search leader Baidu (Nasdaq: BIDU), which has spent millions of dollars over the last 3 years on a Japanese search portal with little results to show for that investment. This Taobao withdrawal from the market was completely predictable, and I wouldn’t be surprised at all to see a similar retreat by Baidu within the next 12 months.

Bottom line: A bid by a Lenovo sister company for bankrupt Japanese chipmaker Elpida is likely to fail, while Baidu is likely to follow a recent Alibaba retreat from Japan in the next 12 months.

Yahoo, Alibaba Dance Nears Finale　　雅虎应与阿里巴巴撇清干系

By newsdoug on December 23, 2011

Yahoo aims for clean slate with Asia asset sale I normally don’t like to write about the same deal twice in one week, but in this case things suddenly seem to be moving quickly in the story of faded Internet giant Yahoo (Nasdaq: YHOO), which may soon dispose of some or all of its 40 percent stake in Chinese e-commerce leader Alibaba as well as its holdings in Yahoo Japan (Tokyo: 4689). Reports in the foreign media are slightly conflicting, but what’s clear is that the Yahoo board was set to meet on Thursday to discuss a plan that would see it sell either 25 percent of its stake in Alibaba, or perhaps the entire 40 percent stake, under a deal that would be worth around $17 billion. (English article) I had written earlier in the week on other reports that said Alibaba was working with partners to lead a group that would buy out Yahoo entirely (previous post), in a deal that might value Alibaba at around $20 billion. But the latest reports indicate that the Yahoo board would prefer to sell off its valuable Asian assets rather than be acquired outright, and appears to be moving quickly in that direction with the Thursday board meeting. This kind of strategy looks good, as it would allow Yahoo to quickly raise some big cash and also to get rid of a major distraction from these Asian assets as it hires a new chief executive to turn itself around following the recent departure of controversial CEO Carol Bartz. I’m a bit puzzled about why Yahoo might want to hold on to some of its Alibaba stake, as at least one of the reports said the company would still like to keep 15 percent of the Chinese e-commerce giant. In my view, this asset, which Yahoo purchased for around $1 billion in 2005 and which could now be worth about $8 billion, was very successful from an investment perspective but disastrous from a strategic one. A personality clash between Bartz and Ma was largely to blame for the bad relations between the 2 companies, and perhaps Yahoo’s board feels the relationship could be salvaged under a new CEO. But in my view, Jack Ma is a brilliant but very opinionated leader head who is unlikely to listen to anyone whose views differ from his own, and Yahoo would be well advised to completely sell its Alibaba stake, as any attempts at future strategic initiatives between the two sides would most likely end as major disappointments.

Bottom line: Yahoo is on the cusp of selling off its distracting stakes in Alibaba and Yahoo Japan, and should sell off all of its Alibaba holdings to focus on reviving its core search business.

New Loan Brings Alibaba Value Into Focus

By newsdoug on December 19, 2011

Loan provides latest clue to Alibaba value New figures coming out of a foreign media report are starting to shed some light on the value Alibaba, China’s biggest e-commerce group, as it moves forward with a deal that would see it lead a group to buy out faded Internet giant Yahoo (Nasdaq: YHOO) and then personally buy back the 40 percent of itself that Yahoo current holds. The interesting element to all this is that based on the latest numbers, Alibaba’s valuation is likely to come in around $20 billion, not bad for a company whose only listed unit, B2B specialist Alibaba.com (HKEx: 1688) is only worth about $5 billion, but also a far cry from the $32 billion that some would like others to believe. According to the latest report, Alibaba is close to assembling a $4 billion loan that it would use to buy back the 40 percent of itself held by Yahoo after the bigger Yahoo buyout, which itself would be valued at around $25 billion. (English article) We already know from public data that Yahoo’s other big Asia asset, its 35 percent stake in Yahoo Japan (Tokyo: 4689), is worth about $6 billion at current market rates. That means $19 billion of the $25 billion purchase price would cover Yahoo itself and the 40 percent of Alibaba that it owns. We also know that Alibaba is raising $4 billion in bank loans to buy out the 40 percent of itself owned by Yahoo, which presumably represents perhaps about half of the financing for the deal. So that would mean Alibaba may pay about $8 billion for the 40 percent stake in the end, valuing itself at about $20 billion and the rest of Yahoo at about $11 billion. I know that may look like a lot of math, but at the end of the day we’re looking at 3 big pieces: A new Yahoo worth about $11 billion, an Alibaba worth about $20 billion and a Yahoo Japan which we already know is worth $18 billion. The Alibaba figure is the most interesting to me, as one of the company’s newest investors previously said the price his company paid for a stake in Alibaba this summer valued the group at $32 billion (previous post) I said that figure looked quite inflated and was indicative of China’s looming Internet bubble, which is already showing signs of bursting. Alibaba certainly realizes all this, which is why it is working hard to quickly close this deal and maintain a respectable valuation in the $20 billion range before the bubble really bursts.

Bottom line: The latest figures on a pending deal to buyout Yahoo show Alibaba is worth about $20 billion, a respectable sum but still well below a figure floated in the market earlier this year.

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