WeChat, OTTs Nip At China Mobile Revenue

China Mobile posts first-ever revenue drop

Leading telco China Mobile (HKEx: 941; NYSE: CHL) has just released its latest quarterly results that show profits continue to sag by about 10 percent, continuing a theme from the past year. But the figure that’s catching attention in the headlines is the company’s top line revenue, which has fallen for the first time ever in the latest quarter. The revenue drop isn’t all that surprising and comes about a year after China Mobile’s profits first began to decline. But perhaps more worrisome is the prospect that revenue could continue to drop for years until China Mobile finds a way to win back some of the business that is rapidly flowing to third-party service providers like Tencent (HKEx: 700) and a new batch of mobile virtual network operators (VNOs). Continue reading

Shanghai FTZ On Roll With Costco, Sinopec

Costco sets up in Shanghai FTZ

After a year of mostly hype, Shanghai’s new Free Trade Zone (FTZ) has finally begun showing the world some substance in the last 2 months with a recent string of high-profile announcements by major companies that plan to set up in its borders. Microsoft (Nasdaq: MSFT) and Amazon (Nasdaq: AMZN) were among the first to announce plans, and were joined last week by US retail giant Costco (Nasdaq: COST) and top Chinese oil refiner Sinopec (HKEx: 386; Shanghai: 600028; NYSE: SNP). Continue reading

News Digest: October 21, 2014

The following press releases and media reports about Chinese companies were carried on October 21. To view a full article or story, click on the link next to the headline.
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  • China’s M&A Watchdog Halves Time Taken To Approve Deals (English article)
  • Apple (Nasdaq: AAPL) In Talks With UnionPay, Other For Apple Pay In China (Chinese article)
  • China Mobile (HKEx: 941) Reports Results For First 3 Quarters (HKEx announcement)
  • Tesla (Nasdaq: TSLA) Tries Tmall, To Take Part In Single’s Day Promotion (Chinese article)
  • SanPower Group Acquires Group Buying Site LaShou (Chinese article)
  • Latest calendar for Q3 earnings reports (Earnings calendar)

Warner, Wanda In New China Film Finance Acts

Wanda Cinemas files for domestic IPO

I’ve stopped using the term “love affair” to describe the romance between Hollywood and China over the last 2 years, as it no longer seems sufficient to describe the flood of tie-ups that have emerged since China became the world’s second largest box office. The Long March of new deals has now gained 2 more members, with word that US film giant Warner Bros (NYSE: TWX) is in a major new movie financing deal with Shanghai Media Group (SMG), China’s leading regional maker of filmed entertainment. In a separate headline, other reports are saying that real estate giant Wanda Group is also deepening its own involvement in movie industry finance, by filing to make a domestic IPO for its movie theater business. Continue reading

Loyalty Boosts Apple In iPhone 6 Debut

iPhone 6 draws crowds in China launch

Nearly a month after their global launch, Apple’s (Nasdaq: AAPL) latest iPhones are now formally on sale here in China. We’ll no doubt get flooded with numbers about initial sales in the next few days, some of which may be correct but many of which will probably be just guesses. One larger question that’s on everyone’s mind is promotions by the nation’s 3 telcos, as China Mobile (HKEx: 941; NYSE: CHL), China Unicom (HKEx: 762; NYSE: CHU) and China Telecom (HKEx: 728; NYSE: CHA), as all come under government pressure to cut back on their aggressive subsidies.

The early news looks relatively good for Apple on that front, with one media report saying the 3 telcos are mostly maintaining their aggressive iPhone subsidies from previous levels. We’ll examine that issue shortly, and whether it even matters much. But first let’s look at the bigger picture that had the iPhone 6 receive a relatively strong reception after it went on sale in China on Friday, 4 weeks after its global debut and 3 weeks after its Asia launch. Continue reading

Wanda In Leisure Drive With Travel Buy

Wanda buys Zhejiang travel agency

Wanda Group is already one of China’s leading commercial property owners, and now it’s taking aim at the fast-growing travel sector with word that it’s purchased a major travel agency in affluent Zhejiang province. There’s no financial detail on the deal, but the purchase should help to bolster Wanda’s position that has already made it China’s leading travel company just 2 years after its formation. The group could ultimately become one of China’s leading integrated travel and leisure companies if it eventually lists, providing an attractive alternative to the crowded field of publicly listed firms like online travel agent Ctrip (Nasdaq: CTRP) and leading hotel operator Home Inns (Nasdaq: HMIN). Continue reading

News Digest: October 18-20, 2014

The following press releases and media reports about Chinese companies were carried on October 18-20. To view a full article or story, click on the link next to the headline.
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  • Taiping, Sinopec (HKEx: 386) in $800 Mln Shanghai FTZ Financial Leasing JV (English article)
  • Apple (Nasdaq: AAPL) Looks for Big Screen Boost as iPhone 6 Hits China (English article)
  • China’s Wanda Cinema Line Makes Fresh IPO Bid With Govt Regulator (English article)
  • Warner Bros, Brett Ratner Cut Deal To Create Chinese Investment Fund (English article)
  • Citic Securities (HKEx: 6030) Announces $3 Bln Medium-Term Note Program (HKEx announcement)
  • Latest calendar for Q3 earnings reports (Earnings calendar)

Morton, McDonald’s Taste Sweet And Sour In China

Morton Salt salivates at China market

Two new headlines are casting a spotlight on the very different tastes that China can hold for foreign food firms, including the sweetness they often feel on entering the huge market for the first time. That particular taste is quite strong in the latest announcement from US salt giant Morton, which has just gained major new access to the market through a joint venture.

But the taste can often be far more sour for companies that have been in China for a while, as they experience the many challenges of doing business in the complicated market. That particular taste is in the latest headlines for global fast food leader McDonald’s (NYSE: MCD), which has reportedly hit a speed bump due to a dispute with a local partner as it tries to reignite its growth through a new franchising drive. Continue reading

Spring, Alibaba Finance Arm Move Towards IPOs

Spring Airlines IPO flies forward

I don’t usually write about IPOs in China’s domestic A-share market, mostly because most such offerings are for stodgy state-run firms with low growth potential and whose shares aren’t available to most foreigners. But the market is changing as the regulator slowly warms up to more interesting private firms, which is reflected in an upcoming listing plan by entrepreneurial budget carrier Spring Airlines. At the same time, separate reports are shining a spotlight on another potentially exciting domestic IPO that would still be a year or two in the future, with word that e-commerce giant Alibaba (NYSE: BABA) has set up Ant Financial, a separate company to officially own its financial service assets. Continue reading

China Supreme Court Clears Tencent Of Monopoly Claims

Supreme Court rules for Tencent in antitrust lawsuit

Big foreign multinationals may be feeling the heat from a recent string of anti-monopoly investigations, but Chinese Internet firms won’t have to face such worries anytime soon. That’s the latest message coming from Beijing, with word that China’s Supreme People’s Court has ruled in favor of social networking giant Tencent (HKEx: 700) in a long-running lawsuit claiming the company controlled a monopoly in the instant messaging market. I originally sided with Tencent when the case was filed 3 years ago by security software specialist Qihoo 360 (NYSE: QIHU), because I felt the lawsuit looked retaliatory for an unrelated suit between the pair at that time. But much has changed since then, most notably the meteoric rise of Tencent’s wildly popular WeChat mobile instant messaging service that has become an indispensable tool for millions of people in China, myself included. Continue reading

News Digest: October 17, 2014

The following press releases and media reports about Chinese companies were carried on October 17. To view a full article or story, click on the link next to the headline.
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  • Ant Financial Set Up With Alibaba Assets Alipay, Yu’ebao And Others (Chinese article)
  • Spring Airlines To Become First Public Low-Cost Carrier With IPO By Year End (Chinese article)
  • Internet Giants’ Brawl Ends With Qihoo (NYSE:QIHU) Final Loss To Tencent (English article)
  • McDonald’s (NYSE: MCD) Hits Snag In China Expansion With Franchisee Dispute (Chinese article)
  • Inspur Wins China Telecom Server Tender (English article)
  • Latest calendar for Q3 earnings reports (Earnings calendar)