Beijing’s crackdown on excessive spending by officials has claimed one of its first victims in the media sector, with word that leading independent broadcaster Phoenix Satellite TV’s (HKEx: 2008) profits tumbled in the first half of the year due to flagging revenue from luxury goods advertisers. The news isn’t all that surprising, since Beijing’s crackdown has been going on for more than a year now. Now we’ll have wait and see how long the slowdown lasts, whether it intensifies, and who else is most vulnerable. Continue reading
China Telecom (HKEx: 728; NYSE: CHA) could quickly regain the growth momentum it lost in the first half of this year, with word that the smallest of the nation’s 3 mobile carriers has already launched 4G service just weeks after getting a license for the business. At the same time, media are reporting that both China Telecom and larger rival China Mobile (HKEx: 941; NYSE: CHL) are preparing to shutter their airport VIP lounges, in a move that was long overdue as each faces pressure to cut marketing costs. The pair of developments show that China Telecom should soon return to positive subscriber growth, after posting net losses in the first half of this year as it waited for a 4G license. Continue reading
Smartphone maker Xiaomi’s co-founder Lei Jun is a marketing master, but his lightweight status as a technology expert landed him in the middle of an embarrassing gaffe in the microblogging realm over the past week. I normally would sympathize with someone caught up in such a gaffe, as such mistakes are usually harmless even if they’re somewhat embarrassing. But in this case I don’t feel too much sympathy for Lei, who is such a tireless promoter for his company that this kind of stumble was almost inevitable.
Meantime, the number “2″ seems to be a magic one for leading search engine Baidu (Nasdaq: BIDU), which made a rare appearance in the microblogging realm to trumpet the formal launch of its new search service in Brazil — its second major foray outside China after a dismal first effort in Japan. In this case, Baidu isn’t really trumpeting the “2″ element of its Brazilian story, even though it took more than 2 years for the launch since reports first emerged of its plans for the site. Continue reading
The following press releases and media reports about Chinese companies were carried on July 24. To view a full article or story, click on the link next to the headline.
- McDonald’s (NYSE: MCD) Sticks By Meat Supplier OSI After Yum Severs Ties (English article)
- SAIC (Shanghai: 600104), Alibaba Partner In Internet Car Initiative (Chinese article)
- First Foreign-Invested Hospital Approved, Obstacles Remain (Chinese article)
- Phoenix Satellite TV (HKEx: 2008) Announces Profit Warning (HKEx announcement)
- Lenovo (HKEx: 992) To Launch, Air Purifiers, Other Smart Devices (Chinese article)
- Latest calendar for Q2 earnings reports (Earnings calendar)
A year after it shook up China’s stodgy banking sector with the launch of its Yu’ebao savings product, e-commerce leader Alibaba looks set to give the market another shot of needed innovation in a new tie-up with 7 major banks. This time the aim is to promote lending to small and medium-sized enterprises (SMEs), with a focus on manufacturers and especially exporters. Such companies often have difficulty getting loans from traditional banks for reasons I’ll explain shortly. Thus this new partnership aims to use Alibaba’s mountains of financial data on these smaller companies to help the banks better understand underserved SMEs that are a critical player in China’s economy. Continue reading
Update: Since originally writing this post, Tencent has issued a statement in response to the original Chinese media reports saying it has no plans to close its microblogging service. It adds the service will be combined with its news service, as part of a broader restructuring of its online media group.
New reports are saying that leading Internet firm Tencent (HKEx: 700) is quietly halting development for its largely ignored microblogging service, in what would amount to a rare admission of defeat in its core social networking services (SNS) business. The move would be long overdue, as Tencent’s microblogging service, a variant of US leader Twitter’s (NYSE: TWTR) service, was never really a major player in China. So in that sense I have to at least congratulate Tencent for finally conceding defeat in the space to Weibo (Nasdaq: WB), the Twitter imitator founded by leading web portal Sina (Nasdaq: SINA). Continue reading
Shanghai and most major Chinese cities lack organized outdoor food centers and night markets, which are a colorful and popular part of daily life in places like Taiwan, Hong Kong and Singapore. But now that’s changing here in Shanghai, which is rolling out ambitious plans for a series of such centers modeled on the famous Shihlin night market in Taipei.
This kind of move seems long overdue, and could kill many birds with a single stone. Most importantly it would help to rid the streets of annoying hawkers, and it would also remove a source of noise and congestion that is irritating for nearby residents. It would also tackle the problem of food safety, since concentrating such hawkers in supervised centers would make it easier to monitor their quality. Continue reading
The following press releases and media reports about Chinese companies were carried on July 23. To view a full article or story, click on the link next to the headline.
- Tencent (HKEx: 700) Halts New Development For Microblog Service (Chinese article)
- Alibaba Joins With Banks In Online Lending Initiative (Chinese article)
- New Oriental (NYSE: EDU) Announces Q4 Results, $120 Mln Share Repurchase (PRNewswire)
- Xiaomi Unveils New Flagship Smartphone, The Mi 4, With A Metal Frame (English article)
- Apple (Nasdaq: AAPL) Revenue Lags Street’s View Despite Strong China Growth (English article)
- Latest calendar for Q2 earnings reports (Earnings calendar)
Two more US-traded Chinese firms are on the cusp of de-listing, with online game operator Giant Interactive (NYSE: GA) and chipmaker RDA Microelectronics (NYSE: RDA) just announcing they have wrapped up buy-out deals that will pave the way for their imminent privatization. These 2 de-listing stories were announced months ago and are completely expected. But the bigger underlying story is the lack of major new privatization announcements in the last half year. In a similar development, major new IPOs by Chinese firms in New York have slowed considerably since a boom of offerings in April and May, indicating the broader deal-making market may be entering a new, more stable phase. Continue reading
It’s been more than a year since a major food safety scare hit western fast-food operators in China, so we were probably overdue for the latest scandal that is now consuming leading chains KFC (NYSE: YUM) and McDonald’s (NYSE: MCD). Frankly speaking, Chinese consumers are probably so jaded about food safety scandals by now that I don’t know if these latest 2 will really have much long-term impact on either company.
The most disgraceful element this time is the fact that the supplier at the heart of the latest scandal is a foreign-owned firm. Up until now, most of the suppliers who provided tainted food to big foreign supermarkets and restaurant chains were domestic Chinese firms, which usually have lower quality control standards. Thus this latest scandal could really do some damage to the broader image of foreign-owned companies, which are generally seen as more trustworthy than their Chinese peers. Continue reading
China’s regulators have become involved in mediating a growing number of business disputes, reflecting the recent rise of a new generation of multibillion-dollar private sector companies that are rapidly growing beyond their traditional roots. In most cases, companies that began as Internet firms and high-tech manufacturers have encroached into a wide range of new areas like banking, TV and telecoms services, raising the hackles of big state-owned firms that previously dominated those sectors. Continue reading