INTERNET: Tencent Adds Ads To Popular WeChat Function

Bottom line: High-spending advertisers could provide a major new revenue source for Tencent, as it rolls out new ad-based services on its popular WeChat Moments function.

WeChat rolls out new ad services

Internet stalwart Tencent (HKEx: 700) is revving up its drive to monetize its popular WeChat mobile messaging platform, with word that it’s rolled out advertising services for one of the platform’s most popular functions. The move will start inserting ads into WeChat’s popular Moments function, known as pengyuouquan in Chinese, in a gamble that risks alienating many of the hundreds of millions of platform’s users. Continue reading

IPOs: Spring, Wanda Cinema Leap In Debuts

Bottom line: Wanda Cinema and Spring Airlines represent a new generation of major private companies to list in China, and should enjoy strong share gains over the short to medium terms following their IPOs.

Spring Air leaps on first 2 trading days

There was plenty of spring in the stocks of 2 hot companies that listed in China this week, with budget carrier Spring Airlines (Shanghai: 601021) and theater operator Wanda Cinema Line (Shenzhen: 002739) jumping 44 percent in their trading debuts. The pair are part of a new generation of privately owned companies starting to list on China’s main stock markets, stealing the spotlight from an older group of state-run firms that still dominate the country’s 2 main stock exchanges in Shanghai and Shenzhen.

Obviously profits and broader performance will be the biggest determiner of whether these companies’ stocks continue to rise after the euphoria of their IPOs starts to fade. But from the perspective of a western buyer like myself, Wanda Cinema and Spring Air are 2 of the first Chinese-listed firms that I’ve seen whose stocks I would personally consider buying. Continue reading

Shanghai Street View: Ayi Overtime

Spring exodus creates ayi shortage

The annual Spring Festival travel rush has been hogging the headlines these last few weeks, but several news reports this week are casting a more human spotlight on the millions of people who have already started leaving Shanghai for annual reunions back home. Those reports focus on the annual headaches local employers feel when millions of their workers leave for weeks or even months, driving up salaries by 50 percent or more for the people who stay on the job.

The issue adds a more human face to the millions of people who now call Shanghai home, even though they have little or no official status as city residents. Many of us depend heavily on such people, from the waitresses at our favorite restaurants, to the ayis who clean apartments and trainers who staff the gyms where we work out. Continue reading

News Digest: January 23, 2015

The following press releases and media reports about Chinese companies were carried on January 23. To view a full article or story, click on the link next to the headline.
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  • Wanda Cinema (002739.SZ) Surges To 44 Pct Limit on Shenzhen Trading Debut (English article)
  • WeChat Global MAU Reaches 440 Mln, Moments Ad Rates Revealed (English article)
  • Ping An (HKEx: 2318) Acquires City Of London Property For $482 Mln (English article)
  • TCL (Shenzhen: 000100) Reorganizes Into 3 Main Produce Areas (Chinese article)
  • TAL Education (NYSE: XRS) Announces Unaudited Results Fiscal Q3 (PRNewswire)

RETAIL: Bun Seller Gubuli Tries Coffee, Carrefour Weighs Sale

Bottom line: Gubuli’s foray into the coffee business is doomed to failure, while Carrefour is likely to sell part of its China business to a local partner later this year.

Gobuli tries coffee with Gloria Jean’s

You know the China coffee market is overheated when one of the nation’s most famous names in a traditional food like steamed buns enters the market. That’s what’s happening now, with word that Gobuli Group, a restaurant chain whose name is synonymous with a popular kind of meat-filled steamed buns, is launching a coffee chain joint venture in partnership with Australia’s Retail Food Group.

While the coffee business is quickly overheating, the opposite is true for the traditional supermarket business, which has seen several major western retailers leave the market or scale back operations as they face a growing challenge from e-commerce. Now it looks like French giant Carrefour (Paris: CA) could become the next in that trend, with word that it might consider selling some or all of its China business to a local partner. Continue reading

TELECOMS: China Telecom Outgrows Rivals

Bottom line: New data from the telecoms regulator shows that China Telecom outperformed its rivals last year, and could be set for strong growth as it consolidates around its high-speed wireless data business.

China Telecom outpaces rivals in 2014

Just a month after I expressed disappointment at China Telecom (HKEx: 728; NYSE: CHA) for its lack of focus in the era of data services, newly released year-end financial data are making me re-think my view. That data appears to portray China Telecom as a company that has made the difficult transformation from a traditional fixed-line operator to a more wireless-focused carrier, meaning it could finally be poised for some strong growth this year as it rolls out a new state-of-the-art 4G network. Continue reading

INTERNET: Tumblr Eyes China As Censors Watch

Bottom line: SNS operator Tumblr could quickly find its site blocked in China if it rolls out a Chinese-language edition targeting mainland users without taking formal steps to enter the country.

Tumblr eyes China

News that US social networking site (SNS) Tumblr is eying the China market looks intriguing, as it would come not long after professional networking site LinkedIn (NYSE: LNKD) entered the market and as industry titan Facebook (Nasdaq: FB) lobbies hard for its own Chinese presence. But what most caught my attention about this latest development was the somewhat humorous headline in one report noting that Tumblr is “still not blocked in China”.

Of course the implication is that once Tumblr formally launches a Chinese language edition of its popular blogging and SNS service, it could very easily find its site blocked by China’s Internet police. Continue reading

News Digest: January 22, 2015

The following press releases and media reports about Chinese companies were carried on January 22. To view a full article or story, click on the link next to the headline.
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  • Spring Airlines (Shanghai: 601021) Jumps 44 Pct In Shanghai Trading Debut (Chinese article)
  • Alibaba (NYSE: BABA) Seeks Stake In Insurer New China Life (HKEx: 1336) – Paper (English article)
  • Huawei, Global Union Partner On OTT TV Service (English article)
  • Dalian Wanda Group Pays 45 Mln Euros For Soccer Club Atletico Madrid (Chinese article)
  • eHi (Nasdaq: EHIC), Ctrip (Nasdaq: CTRP) Launch Next Phase Of Partnership (PRNewswire)

INTERNET: Sogou Chases News, Hollywood Sues Xunlei

Bottom line: Sougou could gain some momentum in the search market this year following some innovative new tie-ups with WeChat, while Xunlei’s stock will remain under pressure as it gets dogged by more piracy issues.

Sogou launches news feature on WeChat

More than a year after emerging as China’s third-largest search engine with the merger of 2 second-tier players, Sogou is finally making an interesting move by launching a news app that takes advantages of its ties to Internet titan Tencent (HKEx: 700). The move looks particularly promising, since the rapid rise of another similar app called Today’s Headlines shows that this is clearly an area with strong demand. The move could pose a serious challenge to the high-flying Today’s Headlines, which earlier this week was named as one of China’s top 10 mobile apps for 2014. (previous post) Continue reading

FINANCE: Citic, Galaxy Kick Off 2015 With Mega Fund Raising

Bottom line: New mega fund-raising by Citic and Galaxy Securities could presage a flurry of global buying in the year ahead as non-banking financial firms look to expand abroad.

Citic raises $10 billion

Massive new fund raising by 2 major Chinese financial firms is showing that these companies remain an attractive option for international investors, even as traditional banks have become a pariah due to their huge volumes of bad debt. The deals by financial conglomerate Citic Ltd (HKEx: 267) and Galaxy Securities (HKEx: 6881) will raise a collective $12.3 billion, and could also presage a new wave of global buying by fast-growing Chinese financial firms outside the nation’s traditional banks. Continue reading

WEIBO TALK: TCL’s Valuation Envy, JD Looks Back At Dangdang

Valuations in focus as Lunar year closes

Internet executives were busy quashing a number of rumors on their microblogs this week, with smartphone sensation Xiaomi trying to stamp out reports of bitter relations with SNS giant Facebook (Nasdaq: FB), and e-commerce giant Alibaba (NYSE: BABA) quashing talk of a major new investment in South Korea. But some of the more interesting chatter focused on the concept of company valuations, and just how widely such valuations can vary for China’s dynamic tech firms.

At the same time, a coming flurry of year-end parties began to kick off in the run-up to the Chinese New Year holiday that’s just a month away. The microblogging realm saw e-commerce giant JD.com (Nasdaq: JD) singing its own praises at the company’s annual party, taking a shot at fast-fading rival Dangdang (NYSE: DANG) in the process. At around the same time, a stumbling Sina Weibo (Nasdaq: WB) also held an annual awards ceremony for notable microbloggers, in its own attempt to remain relevant in the social networking realm. Continue reading