FINANCE: P2P Fire Grows With Lufax Mega-Funding

Bottom line: P2P lenders like Lufax and Jimu Box have become the latest hot ticket for Chinese Internet investors, and one or more could make an IPO later this year to seize on the positive sentiment.

Lufax raises $500 mln

I remember a time not long ago when China tech deals worth just $10-$20 million were considered big and worthy of news, as such sums looked big when the sector was just starting to develop. Nowadays the threshold has risen sharply as both domestic and international investors flood into the space. That’s definitely the case with the latest mega-deal, which has seen peer-to-peer (P2P) lending platform operator Lufax raise a cool $485 million in new funding round, a record for the fast-emerging space.

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FINANCE: CICC Looks For Story To Sell In IPO Run-Up

Bottom line: CICC’s IPO later this year will attract lukewarm investor interest due to its fading prospects, forcing it to scale back its plan to raise up to $1 billion.

CICC to get lukewarm reception in HK

A new story on homegrown investment bank CICC is casting a spotlight on the kind of interesting but also somewhat uninspiring Chinese companies that are likely to make offshore IPOs this year, after last year’s bumper crop of offerings that included a far more exciting field of candidates. Yesterday I wrote about Legend Holdings, parent of PC giant Lenovo (HKEx: 992), which wants to raise $2-$3 billion through a listing in Hong Kong. Like Legend, China International Capital Corp (CICC) is a company that’s unlikely to excite investors but could still draw a some interest as a decidedly second-tier player. Continue reading

RETAIL: KFC Owner Sows Upscale Seeds In Search Of China Rebirth

Bottom line: Yum’s new upscale Italian restaurant looks like a smart concept for the China market, but a broader campaign to move its Chinese KFC stores upmarket looks like too little too late.

Yum tries fancy Italian fare in China

A year after announcing plans for a major overhaul of its aging Chinese KFC stores, Yum Brands (NYSE: YUM) is adding another prong to its China reboot with the launch of an upscale Italian eatery as it tries to to regain relevance in its most profitable market. Yum’s newest China restaurant brand, Atto Primo, is situated in the heart of the Shanghai Bund, home to some of the city’s oldest and most famous buildings and most expensive restaurants. Yum is calling the restaurant a “lab” for now, but I suspect it could quickly expand the concept with new outlets if it proves popular. Continue reading

News Digest: April 17, 2015

The following press releases and media reports about Chinese companies were carried on April 17. To view a full article or story, click on the link next to the headline.
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  • SunPower (NYSE: SPWR), Apple (Nasdaq: AAPL) To Build Solar Projects In China (English article)
  • P2P Lending Site Lufax Completes $485 Mln Fund Raising Round (Chinese article)
  • China’s Former IPO King CICC Looks for A Fresh Start (English article)
  • Baidu (Nasdaq: BIDU) Unveils Self-developed DuWear Smartwatch OS (English article)
  • 58.com (NYSE: WUBA), Ganji Merger Deal Complete, Announcement Soon (Chinese article)

FUND RAISING: Alibaba, Legend Spotlight Rising Hong Kong

Bottom line: Legend Group’s IPO should get a solid reception, and Alibaba’s separately listed drug and film units should also perform well over the next few years as the Hong Kong stock exchange gains popularity for China tech firms.

Legend makes first public filing for HK IPO

A pair of stories today are casting a spotlight on Hong Kong and its future potential as a hotbed for Chinese tech listings. One of those involves e-commerce leader Alibaba (NYSE: BABA), which wanted to make its record-breaking IPO in Hong Kong last year but ultimately chose New York due to ownership issues. The second involves Legend Holdings, parent of PC giant Lenovo (HKEx: 992), and one of China’s oldest and most respected private tech companies.

The first news bit has Alibaba injecting the pharmacy business from its popular Tmall online shopping mall into its Hong Kong-listed Alibaba Health (HKEx: 241) unit. The second has Legend Holdings making its first public filing for a long-planned listing in Hong Kong that should happen later this year, including some of the first official financials we’ve seen for the IPO. Continue reading

IPOs: Ninebot Swallows Segway, Zips Towards US IPO

Bottom line: China’s Ninebot most likely purchased Segway for less than $100 million to get its technology, and could make a New York IPO by 2017 that will value the firm at $2-$5 billion.

Ninebot buys Segway

If you can’t beat ‘em, then buy ‘em. That seems to be the philosophy at a Chinese firm called Ninebot, which has just announced it has purchased US rival Segway, maker of a trendy type of 2 wheel, stand up vehicle used to travel short distances. The pair of companies previously had a stormy relationship, as Segway had accused Ninebot of intellectual property theft. So this new purchase should formally end the copycat allegations. Continue reading

MEDIA: China Online Video Zooms, Challenges HK Elite

Bottom line: More Chinese online video companies could soon follow LeTV onto the global stage as their home market soars, providing competition in smaller markets to locally entrenched players like Hong Kong’s PCCW and TVB.

LeTV marches into HK

China is generally considered a technology follower rather than a leader, but new data are showing an exciting trend that could see it finally emerge as a global innovator in Internet-connected video services. The factors behind this movement are uniquely Chinese, and stem from a huge pent-up demand in China for quality video services. Such services are finally starting to come from a growing range of private companies led by names like LeTV (Shenzhen: 300104), Xiaomi and Youku Tudou (Nasdaq: YOKU), which are far more innovative and nimble than the stodgy state-run firms that dominate the traditional broadcasting sector.

Those newer companies are showing early signs of trying to go global, using Hong Kong and other Southeast Asian markets as their stepping stones onto the world stage. Such markets are relatively small and rely heavily on western content, making them particularly fertile ground for some of these Chinese firms that can create and distribute content more suitable for Asian audiences. Continue reading

News Digest: April 16, 2015

The following press releases and media reports about Chinese companies were carried on April 16. To view a full article or story, click on the link next to the headline.
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  • Legend Group Files For Hong Kong IPO, 2014 Profit Reaches 4.1 Bln Yuan (Chinese article)
  • Alibaba Injects $2.5 Bln Online Pharmacy Business Into Alibaba Health (HKEx: 241) (English article)
  • JD.com (Nasdaq: JD) Launches JD Worldwide Cross-Border E-commerce Platform (Globe Newswire)
  • Beijing-based Ninebot Acquires Segway, Raises $80M From Xiaomi, Sequoia (English article)
  • Motorola To Return To Profit This Year – Lenovo (HKEx: 992) Executive (Chinese article)

CELLPHONES: LeTV Dials Into Slowing Smartphone Market

Bottom line: LeTV’s smartphone gamble, based on relatively cheap phones tied to its video services, could succeed despite tough competition if its newly launched models get positive reviews.

LeTV launches smartphones

Online video sensation LeTV (Shenzhen: 300104) is all over the tech headlines this morning, with the formal launch of the first 3 models for its previously announced foray into smartphones. The company is taking a page from its successful business model with smart TVs, once again selling what it’s billing as a relatively high-end product for low prices in a bid to attract customers to its core paid video services.

LeTV’s biggest problem will be finding an audience for these models, as it’s quite late to the smartphone game. That fact is being underscored by new industry data that shows China’s cellphone market contracted 5 percent in March, amid growing signs of saturation due to stiff competition. Continue reading

INTERNET: Ganji Charges Up 58.com On Merger Talk

Bottom line: A merger between 58.com and Ganji looks like a smart pairing that would create a clear leader in online classified ads with a market value worth up to $8 billion.

58.com eyes Ganji

China’s Internet world has been buzzing these last 2 days on a steady stream of reports involving a possible merger between leading online classified advertising site 58.com (NYSE: WUBA) and Ganji, one of its biggest rivals. The reports have been somewhat conflicting, some saying a deal is imminent and others saying talks have stalled, but it’s clear that something is happening behind the scenes. The deal certainly looks quite exciting if it’s happening, as it would create a clear market leader anchored in the well-run 58.com, which is often called the Craigslist of China.

This kind of merger often fails to happen in China for reasons of pride, as many of these company founders are fiercely independent entrepreneurs who would rather see their empires slowly crumble than sell to someone else. But more recently we’ve seen some of these entrepreneurs become more realistic and realize they can’t survive as independent companies, and I suspect that’s what’s happening in this case. Continue reading

News Digest: April 15, 2015

The following press releases and media reports about Chinese companies were carried on April 15. To view a full article or story, click on the link next to the headline.
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  • Ganji, 58.com (NYSE: WUBA) To Merge – Report (Chinese article)
  • LeTV (Shenzhen: 300104) Launches High-End Smartphone, Eyes Xiaomi, Apple (Chinese article)
  • China’s March 2015 Handset Shipments Down 5.2 Pct YoY (English article)
  • Liquor Giant Moutai (Shanghai: 600519) Reveals Record Deliveries Without Cash (English article)
  • Giants Reborn In China As Companies Join List Of World’s Largest (English article)