The following press releases and media reports about Chinese companies were carried on May 1-4. To view a full article or story, click on the link next to the headline.
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Walmart (NYSE: WMT) To Boost Sam’s Club China Stores By 60 Pct Over 3 Years (Chinese article)
WuXi PharmaTech (NYSE: WX) Announces Receipt Of Buyout Proposal (PRNewswire)
Itochu, CP Group In E-commerce Venture With Chinese Firms In Shanghai FTZ (English article)
ZTE (HKEx: 763) Taps Japan To Help Sell 60 Mln Handsets Globally (English aritcle)
‘Cheating’ Chinese Antivirus Firm Qihoo 360 (NYSE: QIHU) Blames Cultural Differences (English article)
Bottom line: The new Nokia-Alcatel merger, combined with a continued low-key lobbying campaign by Huawei could ultimately convince Washington to ease its ban on Chinese telecoms equipment within the next year.
US to rethink Huawei ban?
A couple of new reports are casting a spotlight on the troubled relationship between Washington and leading Chinese telecoms equipment maker Huawei, and raising the intriguing potential for a much-needed compromise that might end the impasse between the pair. The impasse is really quite one-sided, with Washington banning the sale of all Chinese telecoms equipment in the US due to concerns about the potential for spying. But this kind of policy seems a bit broad, especially amid an accelerating sector consolidation that is leaving wireless carriers with fewer and fewer networking equipment suppliers to choose from. Read Full Post…
The following press releases and media reports about Chinese companies were carried on April 24. To view a full article or story, click on the link next to the headline.
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17 Major Travel Agencies Unit To Oppose Tuniu (Nasdaq: TOUR) (Chinese article)
Hong Kong’s TVB (HKEx: 511) Sells Stake To China Media Capital-Backed Fund (Chinese article)
Bottom line: ZTE’s patent infringement allegations against Huawei are mostly noise that won’t result in any major legal action, and instead reflect the stiff competition that is plaguing China overheated smartphone market.
ZTE accuses Huawei of IP theft
After several months without any major developments, China’s overheated smartphone market is showing new signs of stress with word that domestic heavyweight ZTE (HKEx: 763; Shenzhen: 000063) is accusing its larger rival Huawei of intellectual property theft. The complaint reflects the intense competition that has plagued China’s smartphone market for the last 2 years, and is likely to claim its first victim or two within the next 12 months.
This particular action also shows that Huawei and ZTE are becoming quite adept at playing the western game of filing lawsuits to protect their intellectual property and attack rivals. Both companies have been sued by their western peers in the past, and their domestic rival Xiaomi suffered a setback last year when it had to stop selling some of its models in India after Ericsson (Stockholm: ERICb) filed a patent complaint. Read Full Post…
The following press releases and media reports about Chinese companies were carried on April 23. To view a full article or story, click on the link next to the headline.
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Visa (NYSE: V), MasterCard (NYSE: MA) Surge On China Move To End Card Monopoly (English article)
Chinese Banks Disobey Order To Support Housing Market (English article)
Bottom line: Beijing’s delay of new rules for foreign tech firms selling to Chinese banks could mark a turning point in a looming trade war centered on cybersecurity, and Washington should move to take reciprocal action.
Beijing slows down on new cybersecurity rules
After months of heating tensions, we’re seeing a sudden pause in the growing friction between China and the west that looked set to erupt into a new trade war centered on the sensitive issue of cybersecurity. That’s my assessment on reading that China is delaying implementation of draconian new requirements that would have forced all foreign tech firms to hand over sensitive and highly confidential product information when selling to Chinese banks.
I’m certainly not being naive in believing that China’s delay in this instance is the result of its realization that there’s no security risk posed by products supplied by foreign tech giants like IBM (NYSE: IBM), Cisco (Nasdaq: CSCO) and Oracle (Nasdaq: ORCL). Instead, this delay is almost certainly the result of repeated protests from the companies themselves and also from Washington and Europe, which all argue the new requirements are overly and unnecessarily intrusive. Read Full Post…
Bottom line: Tsinghua Unigroup’s pending purchase of a controlling stake in H3C could mark the start of a new partnership with HP in routers, but is unlikely to affect its older partnership with Intel in the telecoms chips.
HP eyes router stake sale to Unigroup
Semiconductor company Tsinghua Unigroup was already a name to watch after a string of major deals last year including a tie-up with Intel (Nasdaq: INTC), and now it’s adding to its allure with word of a major new alliance with Hewlett-Packard (NYSE: HPQ). This latest deal would trump the earlier one from Intel in size, and would see Unigroup buy a controlling 51 percent stake of HP’s China-based H3C unit, which makes routers and switches that compete with US giant Cisco (Nasdaq: CSCO).
It’s not completely clear how much Unigroup would pay for the stake, though the amount would almost certainly be more than the $1.5 billion that Intel paid last year for 20 percent of a new company that Unigroup created through its merger of 2 of China’s leading telecoms chip designers. I’m no telecoms expert, but I’ll admit this latest deal is leaving me just a bit puzzled due to the very different natures of the businesses of H3C and the earlier tie-up involving Intel, which revolved around telecoms microchips. Read Full Post…
The following press releases and media reports about Chinese companies were carried on March 26. To view a full article or story, click on the link next to the headline.
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Bottom line: The latest negative headlines on Unicom and its confusing earnings reflect its broader dysfunction and a lack of investor interest in its stock, though a major new share buyback could provide a good short-term buying opportunity.
Unicom in big share repurchase
I’ve always wondered which investors were fans of China Unicom (HKEx: 762; NYSE: CHU), which based on media and its own earnings reports is easily the most disorganized and dysfunctional of the nation’s big 3 telcos. Now I’m finally learning the answer to that question, with Unicom’s announcement of a major plan to buy back up to 10 percent of its Hong Kong-listed shares. That would equate to a massive $3.6 billion worth of stock, based on the company’s current market value, in what would easily be one of the biggest share buybacks I’ve ever seen. Read Full Post…
Bottom line: Huawei’s and ZTE’s attempts to cultivate alternative brands with Honor and Nubia could both stand a relatively strong chance of success, though ZTE’s slower, more focused approach looks a bit more prudent.
Huawei holds Honor gala
Chinese smartphone makers Huawei and ZTE (HKEx: 763; Shenzhen; 000063) are trying to shed their stodgy images with newer brands targeting the kind of young trendsetters that have propelled start-up sensation Xiaomi onto the global stage. I got a chance to check out Huawei’s Honor brand phones and ZTE’s Nubia models last week at a major trade show in Spain, where both were trying to show that they can be just as hip and edgy as Xiaomi and Apple (Nasdaq: AAPL), the global leader in trendy, cutting edge smartphones. Read Full Post…
Bottom line: Huawei’s massive spending at the world’s biggest telecoms show this week hints at its determination to make big inroads in Europe and the US this year for its older networking equipment and newer smartphone businesses.
Huawei spends millions at big telecoms show
In between running from interview to interview at the world’s largest telecoms show this week in Barcelona, I managed to scribble down some notes on which Chinese firms were spending the most heavily at this year’s Mobile World Congress (MWC). Such spending hints at company priorities for the year ahead, including which markets they are targeting. In this case it’s worth noting that MWC is largely a show for customers from North America and especially Europe, so anyone who attends as an exhibitor is almost certainly eying those markets.
All that said, it should come as no surprise that telecoms giants Huawei and ZTE (HKEx: 763; Shenzhen: 000063) were the 2 biggest spenders among Chinese firms at this year’s show, based on my own analysis. PC giant and smartphone aspirant Lenovo (HKEx: 992) was the only other Chinese firm with major representation. But perhaps most surprising was the size of Huawei’s presence, which easily dwarfed both ZTE and Lenovo. Read Full Post…
