SMARTPHONES: Coolpad in Denial on LeEco Takeover Talk

Bottom line: Rumors that LeEco is in talks to take over Coolpad are probably true, with a deal likely in the next few months that would see the former buy a controlling stake or even purchase the latter outright.

Coolpad to be acquired by LeEco?

I don’t usually write about rumors, but I just couldn’t resist opining on new market talk saying that struggling smartphone maker Coolpad (HKEx: 2369) may become the first major player to get swallowed up in a looming industry shakeup. In this case Coolpad is denying the rumors, which say it will be acquired by online video superstar LeEco (Shenzhen: 300104), which is already a major stakeholder and now pays Coolpad to manufacture its recently launched line of smartphones. Read Full Post…

IPOs: SF Express Eyes Back Door; China Music in NY; ZTE Thinks Small

Bottom line: A backdoor listing plan by SF Express in Shenzhen, a New York IPO plan by China Music Corp and 3 new China OTC listings by ZTE units reflect creative approaches to new listings by Chinese firms due to bottlenecks for traditional IPOs.

SF Express eyes backdoor listing

A trio of IPO stories in the headlines are quite revealing, as none are happening through traditional channels on China’s 3 main stock exchanges in Shanghai and Shenzhen. Instead, the largest of the 3 plans has parcel delivery giant SF Express eyeing a backdoor listing using a shell company from the minerals business. Meantime, music streaming company China Music Corp has popped up across the Pacific in New York, where it is reportedly planning an IPO that could be the largest of its kind this year. Read Full Post…

TRAVEL: Anbang Plays Hide-and-Seek with Beijing in Canadian Hotel Bid

Bottom line: Beijing regulators should take a more hands-off approach to outbound M&A by major institutional buyers like Anbang, and let them take more direct responsibility for their investment decisions.

Anbang targeting InnVest?

A new showdown could be brewing between Beijing and China’s newly minted field of outbound investors, as reports emerged last week that insurer Anbang was planning a major new Canadian acquisition less than 2 months after China’s insurance regulator reportedly vetoed a previous similar plan. The latest deal would see Anbang buy InnVest Real Estate Investment Trust (Toronto: INN-UN), one of Canada’s largest hotel owners, following its failed bid in March to buy US hotel giant Starwood (NYSE: HOT), operator of the Westin and Sheraton brands. Read Full Post…

China News Digest: May 24, 2016

The following press releases and news reports about China companies were carried on May 24. To view a full article or story, click on the link next to the headline.
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  • SF Express Eyes Backdoor Listing Using Dingtai Rare Earth (Shenzhen: 002352) (Chinese article)
  • Tencent-Backed China Music Corp Launches Process for NY IPO (Chinese article)
  • Coolpad (HKEx: 2369) Denies Report of Plan to be Acquired by LeEco (Shenzhen: 300104) (Chinese article)
  • Wal-Mart (NYSE: WMT) China Sales Rise 5.1 Pct Y/Y in Q1 (English article)
  • ReneSola (NYSE: SOL) Announces Q1 Results (PRNewswire)

IPOs: Yum Orphaned in China as CIC Abandons Stake Bid

Bottom line: CIC’s withdrawal from the bidding for a stake in Yum’s China unit represents a minor setback, but Yum’s long history in the market makes finding major local investor less important.

CIC drops out of bidding for Yum China stake
CIC ends bid for Yum China stake

KFC parent Yum Brands (NYSE: YUM) has lost a major potential ally as it prepares to spin off its China business, with word that China’s sovereign wealth fund has dropped out of the bidding for 20 percent of the unit. Reuters is reporting that China Investment Corp (CIC) abandoned its bid for a number of reasons, including Yum’s refusal to sell a controlling stake to the new investor group. Yum has previously said it wants to sell just 20 percent of the China unit, which includes 7,200 stores. It also plans to sell more of the unit’s shares through an IPO later this year in Hong Kong or New York. Read Full Post…

INTERNET: Baidu, Real Estate Site Spar Over ‘Protection Fees’

Bottom line: New revelations about Baidu’s fees for endorsing certain companies and including them in special zones on its website are the result of a business dispute and are unlikely to attract major attention from China’s Internet regulators.

Sofang protests Baidu fees

Just as Baidu (Nasdaq: BIDU) starts to recover from a major scandal involving misleading online search results, the Internet giant is coming under attack for similar tactics from a major online real estate services firm called Sofang.com. In this case Sofang’s move looks somewhat opportunistic, taking advantage of the earlier recent scandal to draw attention to another one of Baidu’s less-than-transparent practices involving fees for special treatment on its various websites. Read Full Post…

Shanghai Street View: Culinary Culture

Shanghai sets the table for Michelin Guides

A couple of culinary headlines this week are spotlighting the important role that food plays in defining a city’s character, not only in terms of local tastes but also its openness to out-of-town flavors. Shanghai’s culinary evolution over the last 2 decades has been nothing short of spectacular in that regard, as the city transformed from a regional backwater dominated by local fare like xiaolongbao to one where top-notch flavors from throughout China and abroad are widely available. Read Full Post…

China News Digest: May 21-23, 2016

The following press releases and news reports about China companies were carried on May 21-23. To view a full article or story, click on the link next to the headline.
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  • CIC Ends Talks With Yum Brands (NYSE: YUM) Over China Business – Sources (English article)
  • Mystery Canadian Hotel Buyer Said Potentially Tied to Anbang (English article)
  • Samsung (Seoul: 005930) Integrates Alipay Mobile Pay Function Into Smartphones (Chinese article)
  • Chinese Buyers Circle Soccer “Super” Agent Stellar Group (English article)
  • TCL (HKEx: 1070) Sets Up TV Joint Venture Factory in Egypt (Chinese article)

ENTERTAINMENT: Shanghai Disney Greets 1 Mln, Fends Off Critics

Bottom line: Huge publicity around the new Shanghai Disneyland ensures it will rapidly become a major new profit center after it opens in June, but will also expose Disney to a wide range of mini scandals like one involving its high food prices.

Thousands flock to Shanghai Disney before opening

The hype is rapidly building as Disney (NYSE: DIS) gets set to launch its first theme park in more than a decade, attracting droves of visitors and also the first of what are likely to be many mini-scandals involving the $5.5 billion Shanghai resort. Leading the headlines is word that nearly 1 million people have already flocked to the areas outside the official park just to catch a glimpse of China’s first Disneyland from the outside.

The park has also been admitting smaller numbers of guests on a trial basis to sample the rides and other attractions in the run-up to the official June 16 opening. Some of those got indigestion from the high prices for food at restaurants in the park, leading to a mini-firestorm of criticism that Disney has quickly tried to control. Read Full Post…

SMARTPHONES: Apple Gives Car Money to China, R&D to India

Bottom line: Apple’s $1 billion investment in a Chinese car services firm and establishment of an India R&D lab reflect China’s strength as an incubator of strong private companies and India’s as a software development hub.

Apple’s Tim Cook calls on China, India

It’s been an Asia-themed week for Apple (Nasdaq: AAPL) CEO Tim Cook, whose tour to China and then India casts a spotlight on 2 massive markets with huge potential for the company. This particular trip has been quite revealing for the gifts that Cook has awarded during the week, reflecting each country’s strengths and also its weaknesses.

China’s biggest gift was a $1 billion investment in local private car services firm Didi Chuxing, and also a smaller gift in the form of a new app to promote local musicians. India, meanwhile, secured a coveted R&D lab, which is one of Apple’s few outside the US and hugely prestigious.  Read Full Post…

MULTINATIONALS: Seagate Joins China Tech Train with Sugon Tie-Up

Bottom line: Seagate’s new partnership with Sugon is the latest tie-up designed to give a major western hardware maker continued access to China’s IT services market, even as such partnerships sharply raise the risk of IP theft.

Seagate in new China tie-up

The steady stream of US tech firms bowing to Beijing’s tough new rules for doing business in China has just gained a new member, with word that data storage specialist Seagate (Nasdaq: STX) has just formed a new local joint venture. This particular tie-up comes just a half year after Seagate’s new partner, a company called Sugon (Shanghai: 603019), formed another similar cloud computing partnership with VMWare (Nasdaq: VMW), a unit of data storage giant EMC (NYSE: EMC).

The new Seagate alliance and slightly older VMWare venture come as most major US high-tech hardware makers, including the likes of IBM (NYSE: IBM), Hewlett Packard Enterprise (NYSE: HPE) and Cisco (Nasdaq: CSCO), have all formed similar tie-ups in a new love affair with Beijing. Of course I’m being slightly facetious in calling it a love affair, since these companies really didn’t have any choice in the matter. Read Full Post…