TELECOMS – Broadband To Open To Private Competition

Bottom line: China’s plan to allow private competition in the wire-line broadband sector will move forward slowly, but should provide needed competition for Unicom and China Telecom within the next 3-5 years. 

China opens broadband to private investment

China’s drive to open up its telecoms services sector to more competition could soon gain some new momentum, with word that the telecoms regulator is crafting a plan that would let private companies offer wire-line broadband services. This particular move looks like an extension of a campaign that launched earlier this year, allowing private companies to offer traditional mobile service through the creation of virtual network operators (VNOs).

This new campaign would also come as China works to break the current monopoly in the wire-line broadband sector held by China Telecom (HKEx: 728; NYSE: CHA) and China Unicom (NYSE: CHU; NYSE: CHA), which previously were probed for monopolistic practices. It would also come as Beijing assembles a new national wire-line broadband company through consolidation of the nation’s dozens of cable TV operators. Continue reading

INTERNET: SNS Wars Heat Up As Weibo Freezes Out WeChat

Bottom line: Weibo’s latest moves to stop users from defecting to WeChat reflect the company’s concerns over its fading momentum, and send a negative signal that will put pressure on its stock.

Weibo takes new steps to counter WeChat’s rise

An entertaining war is breaking out in the social networking (SNS) space, with word that the Twitter-like Weibo (Nasdaq: WB) is taking steps to punish people who use the service to promote their parallel accounts on archrival WeChat. I say this particular war is somewhat entertaining, as it seems quite petty and reflects the intense competition between these 2 companies. But at a more serious level, Weibo’s move reflects the very real fact that its service is rapidly losing eyeballs to the trendier WeChat, which is far more versatile and is also optimized for the fast-growing mobile Internet space. Continue reading

Shanghai Street View: Misguided Matchmaking

Matchmaking event posts low success rate

With the Double Eleven shopping binge now in the past, many of Shanghai’s singles are moving their sights to the upcoming Chinese New Year when they’ll have to face the barrage of questions about their love lives from friends and relatives. Sensing an opportunity to play on the upcoming anxiety, our city is preparing to hold the latest edition of its semi-annual matchmaking event next month to give singles something to talk about in response to their grillings at home. Continue reading

News Digest: November 28, 2014

The following press releases and media reports about Chinese companies were carried on November 28. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════

  • Dalian Wanda To Seek HK Approval For Up To $6 Bln IPO On Monday: IFR (English article)
  • Weibo (Nasdaq: WB) Freezes Out Users Who Promote WeChat Public Accounts (Chinese article)
  • China To Allow Private Companies To Sell Broadband Services (English article)
  • BAIC Approved For Hong Kong IPO, To List On December 18 (Chinese article)
  • Xiaomi’s Lei Jun Invests 100 Mln Yuan In You+ Youth Apartment Rental Service (Chinese article)

INTERNET – Shanda Breakup Nears End With Game Unit Sale

Bottom line: Chen Tianqiao’s sale of his Shanda Games stake marks his symbolic exit from online entertainment, and he will probably return to deal-making by setting up his own private equity firm.

Chen Tianqiao steps down from Shanda Games

The slow-motion breakup of the online entertainment empire of Shanda Interactive has taken a major step forward, with news that the company is selling its entire stake in its core online gaming unit. The news follows previous reports that Shanda Interactive had reached a deal to sell a controlling stake in its Cloudary online literature unit, and its sale earlier this year of a controlling stake in its struggling Ku6 Media (Nasdaq: KUTV) online video unit. All of this comes as Shanda Interactive’s chairman and founder Chen Tianqiao looks to disband his empire that was an early leader in online entertainment, but later languished as it was overtaken by rivals like NetEase (Nasdaq: NTES) and Tencent (HKEx: 700). Continue reading

COMPUTERS: Microsoft Under New Assault For Tax Evasion

Bottom line: A tax evasion probe against Microsoft is likely to end in a settlement with Beijing, and will be followed by similar probes against other major multinationals that use their complex structures to avoid taxes.

Beijing seeks back taxes from Microsoft

After a period of relative quiet, a recent Chinese wave of probes against major multinationals is jumping back into the headlines with news of yet another investigation against beleaguered software giant Microsoft (Nasdaq: MSFT). This time the world’s largest software company is being investigated for tax evasion, as Beijing looks set to open a new front in its recent series of probes against major multinationals. Whereas the early investigations focused on anti-competitive behavior, this new wave is more likely to be less controversial since it involves tax evasion and dovetails with similar campaigns in the west. Continue reading

INTERNET – WeChat Struggles For US Acceptance

Bottom line: WeChat will face slow progress in the US and other global markets due to strong competition, and will be hobbled by concerns that it may monitor its users activities like it does in China.

WeChat in US promotion on UCLA campus

Tencent’s (HKEx: 700) WeChat mobile messaging service may be wildly popular in China, but it’s facing a steep uphill climb outside its protected home market. My own recent experience using the service in Hong Kong this week highlights one of WeChat’s biggest problems, namely concerns among users that their activities may be monitored and censored. That kind of issue could push users to more popular western brands like WhatsApp and Line, which have cleaner reputations. Tencent itself isn’t helping the situation by using a half-hearted promotion strategy in the US, as highlighted in a new report on some of its recent activities to crack that highly competitive market. Continue reading

New Digest: November 27, 2014

The following press releases and media reports about Chinese companies were carried on November 27. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════

  • Wal-Mart (NYSE: WMT) Dismisses 30 China Executives In Restructuring (English article)
  • Shanda Interactive Sells Controlling Interest In Shanda Games (Nasdaq: GAME) (PRNewswire)
  • China Widens ‘Tax-Evasion’ Net Amid Microsoft (Nasdaq: MSFT) Case (English article)
  • ReneSola (NYSE: SOL) Announces Q3 Results (PRNewswire)
  • Meizu to Release Ubuntu OS Smartphone In Q1 2015 (English article)
  • Latest calendar for Q3 earnings reports (Earnings calendar)

CELLPHONES – Huawei, ZTE Threaten Xiaomi Over Patents

Bottom line: Xiaomi is likely to settle a series of patent disputes launched by domestic rivals Huawei and ZTE, but will face more similar actions as its profile rises in its global expansion.

Huawei, ZTE point finger at Xiaomi

New reports about a series of patent violation claims against smartphone sensation Xiaomi are casting a spotlight on the kinds of battles this fast-rising Chinese firm may face in its aggressive global expansion. Just 3 years after launching its first models, Xiaomi has come from nowhere to become the world’s third largest smartphone brand, behind only much older global rivals Samsung (Seoul: 005930) and Apple (Nasdaq: AAPL). That rapid rise has caught the attention of older domestic smartphone rivals like Huawei and ZTE (HKEx: 763; Shenzhen: 000063), which are reportedly now threatening to sue Xiaomi for violating their patents. Continue reading

WEIBO: Internet Execs Hobnob In Wuzhen; Xiaomi Aims High

Internet execs gather in Wuzhen

Most of China’s high-tech attention was focused on the scenic canal city of Wuzhen near Shanghai this past week, as a who’s-who of top Internet executives gathered for a conference that billed itself as a global gathering. Most of China’s top names were reportedly at the event, including Baidu’s (Nasdaq: BIDU) Robin Li, Alibaba’s (NYSE: BABA) Jack Ma and NetEase’s (Nasdaq: NTES) Ding Lei. But the guest list was notably lacking in major global names, and at least one executive commented on the sensitive subject of the exclusion of global leaders like Facebook (Nasdaq: FB) and Twitter (NYSE: TWTR) from the Chinese Internet.

Meantime, the marketing savvy Lei Jun, who is also CEO and hypemaster supreme for smartphone sensation Xiaomi, also managed to make his own mini splash in the microblogging realm by declaring his own ambition to overtake Samsung (Seoul: 005930) and Apple (Nasdaq: AAPL) to become the world’s biggest smartphone brand. Such hype from Lei isn’t all that unusual, though I was somewhat surprised to see several executives from other firms chime in with support for this upwardly mobile company. Continue reading

News Digest: November 26, 2014

The following press releases and media reports about Chinese companies were carried on November 26. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════

  • Tencent (HKEx: 700) To Air HBO In China As Govt Shuts Down Free Sites (English article)
  • Huawei, ZTE (HKEx: 763) Accuse Xiaomi Of Copyright Infringement (Chinese article)
  • China UnionPay to Launch Android NFC Payment Service – Source (English article)
  • Ctrip (Nasdaq: CTRP) Reports Unaudited Q3 Financial Results (PRNewswire)
  • LeTV (Shenzhen: 300104) CEO Jia Yueting Returns To China After Treatment (Chinese article)
  • Latest calendar for Q3 earnings reports (Earnings calendar)