BUYOUTS: Giant Eyes China Backdoor, Qihoo Still Trying

Bottom line: Giant Interactive is likely to achieve a backdoor listing in China over the next 12 months, while Qihoo could receive a new, lowered privatization offer by the end of this year.

Giant eyes China backdoor listing

Early signs of stabilizing on China’s stock markets are breathing new life into the nascent migration by Chinese tech firms that are abandoning overseas listings to re-list back at home. The latest signals of new movement are coming from formerly New York-listed Giant Interactive, which is eyeing a backdoor listing in Shenzhen, and from Qihoo 360 (NYSE: QIHU), which is indicating its faltering plan to de-list from New York is still alive.

Both of these deals have a bit of history, and are part of a broader wave that saw 3 dozen US-listed Chinese firms announce plans to privatize in the first half of this year. Most of those plans came when China’s domestic stock markets were rallying sharply. Backers of the bids were betting that companies whose shares had languished in New York could get much higher valuations from investors in their home China market. Read Full Post…

IPOs: New Listings Creak Back to Life with China RE Pricing

Bottom line: The offshore market for Chinese IPOs will see a brief resurgence in the next month as China’s stock markets stabilize, but the window will be short-lived as China’s economy shows new signs slowing sharply.

Imax China jumps in HK debut

After an extended period with few new listings, a new wave of IPOs by Chinese firms in offshore markets could be coming, led by stodgy insurer China RE. Sources are saying the re-insurer has taken a major step forward in its creaky IPO process by setting a price range for its stock after receiving strong feedback from investors.

This particular deal has been in the works for the last month, but it’s still relatively encouraging to see that it’s moving closer to the end. But the fact that it comes in the conservative and unexciting insurance sector means we’ll probably have to wait for a more controversial offering to see if the fall IPO season will really take off. Such a riskier deal could come in the next week or so if we see renewed activity for the other major offering in the pipeline, a $1 billion IPO by faded investment banking superstar CICC. Read Full Post…

NEW ENERGY: Holistic Approach Needed to Jump-Start China EVs

Bottom line: Beijing should take a more holistic approach to developing green cars in China, which should include education of owners and creation of owner communities in addition to financial incentives and infrastructure building.

Beijing in new steps to charge up EV sales

China made the latest new move to boost its sputtering electric vehicle (EV) program over the holiday, disclosing an ambitious plan to sharply accelerate installation of charging stations across the country. The plan was aimed at countering one of the biggest obstacles to EV development, namely concerns from potential owners about difficulties they might face recharging their vehicles.

The new move comes after Beijing announced new financial incentives for EV buyers in May, and could provide some more momentum to a national program that has fallen far short of expectations. These kinds of piecemeal measures look good in theory, but often seem to fall flat due to lack of national coordination and supporting education and other publicity. Read Full Post…

News Digest: October 9, 2015

The following press releases and media reports about Chinese companies were carried on October 9. To view a full article or story, click on the link next to the headline.

  • China RE Sets Price Range for $2 Bln HK IPO; to Launch Deal Monday – Source (English article)
  • Meituan, Dianping CEOs Issue Email Acknowledging Merger (Chinese article)
  • China Raises Solar Installation Target for 2015 (English article)
  • China Wants Qihoo 360 (NYSE: QIHU) to Come Home – CEO (Chinese article)
  • Didi Kuaidi Receives China’s First Private Car Services License (Chinese article)

INTERNET: US Trade Group Steps Up Alibaba Piracy Attack

Bottom line: A major US trade group’s new call for censure of Alibaba over piracy will bring more negative publicity, though the company’s name is unlikely to reappear on the next edition of Washington’s “notorious markets” list for trade in counterfeit goods.

Group says Taobao still plagued by fakes

A major US trade group that launched an assault on Alibaba (NYSE: BABA) earlier this year is ratcheting up the volume of its attack, calling for direct censure of the Chinese e-commerce giant for not doing enough to fight piracy. The American Apparel & Footwear Association (AAFA) was quite scathing in its earlier criticism of Alibaba back in July, blasting the company for its flawed approach and lack of transparency in tackling piracy on its Taobao C2C marketplace.

At the time of that critique the AAFA said it was sending a letter detailing its concerns to the US Trade Representative’s office, which compiles an annual list of “notorious markets” where piracy is rampant. Now the AAFA, which represents more than 1,000 American clothing and shoe makers, is being even more direct by specifically calling for Alibaba to be included on the next edition of the “notorious” list that is likely to be published in the next 2-3 months. (AAFA announcement; English article) Read Full Post…

INTERNET: Tencent, Alibaba Odd In-Laws Again in O2O Mega-Merger

Update: An official at an investment firm involved in the deal confirmed to YCBB that the merger talks are happening.

Bottom line: The merger of Dinaping an Meituan will make uneasy in-laws of Tencent and Alibaba, and will likely be followed within a year by a buyout by one of the partners or IPO for the new company.

Meituan, Dianping in uneasy union

The headlines are buzzing today with word of an imminent merger between leading group buying sites Dianping and Meituan on this first day back to work after the week-long National Day holiday. The deal is certainly a landmark one, as it will create a clear leader in the emerging category of online-to-offline (O2O) companies that bring together the convenience of Internet buying with offline products and services like restaurant dining, going to the movies and hailing a taxi.

Some media are pointing out the merger will pose a major new challenge to the aggressive O2O aspirations of Baidu (Nasdaq: BIDU), which is pouring hundreds of millions of dollars into building out its own rival services. But for me, this particular marriage represents the latest chapter of an increasingly close but also uncomfortable alliance between the country’s other 2 Internet giants, Tencent (HKEx: 700) and Alibaba (NYSE: BABA), which are major stakeholders in Dianping and Meituan, respectively. Read Full Post…

New Digest: October 6-8, 2015

The following press releases and media reports about Chinese companies were carried on October 6-8. To view a full article or story, click on the link next to the headline.

  • Meituan, Dianping in Merger Talks – Source (Chinese article)
  • Apparel, Footwear Industry Calls for Taobao Relisting as “Notorious Market” (press release)
  • China to Hasten Roll-out of Car Charging Network: Xinhua (English article)
  • Yum’s (NYSE: YUM) China Missteps Amplify Calls For Spinoff, Other Change (English article)
  • Canadian Solar (Nasdaq: CSIQ) Closes Purchase of Ontario Assets from KKR (PRNewswire)

NEW ENERGY: Solar Schizophrenia Powers Yingli, ReneSola Stocks

Bottom line: YIngli’s debt restructuring plan and ReneSola’s early debt repurchase will bring some confidence to solar shares, but pessimism will quickly return as their situations deteriorate without major signals of new government support.

Yingli delays debt repayment

Shares of Yingli (NYSE: YGE) and ReneSola (NYSE: SOL) have taken investors on a wild ride these last few weeks, reflecting the alternating hopes and fears gripping 2 of the shakiest companies in a solar sector crippled by a downturn now entering its fourth year. If I were a betting man, I would say the chances are better than 80 percent that Yingli won’t survive the crisis, especially after the company’s latest announcement that it will miss a debt repayment deadline. Chances for ReneSola look slightly better, but even then I would only put the company’s likelihood of survival at 50-50.

One of the biggest questions fueling the uncertainty is whether Beijing and local governments will step in to rescue these companies. A year ago the answer would almost certainly have been “no”, reflecting China’s desire to clean up a bloated sector plagued with excess capacity. Recent signals show Beijing may still want to let the weakest players fail, but also that China’s slowing economy may be weakening that resolve. Read Full Post…

SMARTPHONES: Apple Goes to War With China’s Pirates

Bottom line: Apple’s new drive to sell legal music, books and video in China stands a reasonably good chance of success, banking on consumers’ growing willingness to pay for such products if they are convenient and affordably priced.

iTunes comes to China

Following the record-breaking debut for its iPhone 6s models, tech giant Apple (Nasdaq: AAPL) is taking a big new risk by attempting something no one has done yet successfully: making profits from selling legal music and movies in China. The move was part of a newly announced major expansion of Apple’s online store in its second largest global market. But while Chinese consumers have shown a big willingness to pay huge premiums for iPhones, it’s far from clear they’ll do the same for movies and music that they can usually download for free.

Apple sold a record 13 million iPhone 6s models worldwide in their first weekend on sale, easily beating the previous record of 10 million for the iPhone 6 models. China was an important factor in achieving the new record, since the iPhone 6 wasn’t available here during the first weekend of its global launch due to technical reasons. Apple hasn’t given any individual country figures yet, but it’s probably safe to assume it sold at least 3 million of the new iPhones in China during their opening weekend. Read Full Post…

INTERNET: Zuckerberg, Sandberg Keep Up Facebook China Press

Bottom line: Mark Zuckerberg’s meeting with Chinese President Xi Jinping and new China-related remarks by Sheryl Sandberg show Facebook is closing in on a goal of launching its signature service in China, with a breakthrough possible as soon as next year.

Facebook thrives on China ad sales

Despite being blocked in the world’s largest Internet market, social networking (SNS) giant Facebook (Nasdaq: FB) is using every opportunity to quietly remind the world that it’s determined to include China in its global footprint. Just a week after company founder Mark Zuckerberg met with Chinese President Xi Jinping at a high-profile event in Seattle, his chief deputy Sheryl Sandberg was quoted at an event in New York talking up the big business Facebook is already doing in China.

Company watchers will know that Facebook quietly opened a China office in Beijing last year, with an aim to courting local advertisers seeking to reach the company’s global audience of 1.5 billion users. That business is doing quite well, according to Sandberg, though the Facebook’s ultimate China goal is still its eventual entry into a domestic Internet market that boasts nearly 700 million web surfers. Read Full Post…

News Digest: October 1-5, 2015

The following press releases and media reports about Chinese companies were carried on October 1-5. To view a full article or story, click on the link next to the headline.

  • Apple (Nasdaq: AAPL) Brings Apple Music, iTunes Movies & iBooks to Customers in China (Businesswire)
  • Didi President Liu Qing Confirms Breast Cancer, Says Work Unaffected (Chinese article)
  • Yingli (NYSE: YGE) to Restructure Payments for Mid-Term Notes Due Oct 13 (English article)
  • Twentieth Century Fox Creates New China Managing Director Position (Businesswire)
  • Shuttle Bus App ‘Dada Bus‘ Wins 200 Mln Yuan Series B Funding (English article)