Profit Leaps At 58.com, Loss Soars At Qunar

Losses balloon at Qunar

A look at the latest earnings from online travel agent Qunar (Nasdaq: QUNR) and online classified ad site 58.com (NYSE: WUBA) made me feel like I was living in a parallel universe where everything was the opposite of what it should be. Qunar, China’s second largest online travel agent backed by leading search engine Baidu (Nasdaq: BIDU), saw its loss soar 10-fold as its costs grew far faster than revenue. And yet investors welcomed the results, bidding up the company’s stock by 6 percent. Conversely, the profitable 58.com saw its earnings more than double, and yet it’s stock tanked nearly 8 percent on the report. Continue reading

News Digest: August 22, 2014

The following press releases and media reports about Chinese companies were carried on August 22. To view a full article or story, click on the link next to the headline.
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  • Commerce Ministry Re-Examines E-Commerce 7-Day Return Policy (Chinese article)
  • China Minsheng Investment To Formally Launch In Shanghai (Chinese article)
  • Qunar (Nasdaq: QUNR) Reports Q2 Financial Results (Globe Newswire)
  • Second Group Of Private Bank Licenses To Be Released, Fosun Among Winners (Chinese article)
  • China Makes Queries To South Korea In Qualcomm (Nasdaq: QCOM) Anti-Trust Probe (Chinese article)
  • Latest calendar for Q2 earnings reports (Earnings calendar)

Earnings: Property In Black; E-Commerce, Video In Red

Leju jumps on strong results

Following last week’s flood of quarterly earnings announcements by many of China’s top tech names, this week many second-tier players are reporting results that are decidedly mixed. Real estate looked surprisingly strong in the earnings reports of E-House (NYSE: EJ) and its newly listed Leju (NYSE: LEJU) unit, while e-commerce and online video looked weaker in the results of LightInTheBox (NYSE: LITB) and newly listed Xunlei (Nasdaq: XNET). Whereas shares of the Internet giants showed little reaction to their results last week, most of these second-tier names showed much bigger movement this week, probably reflecting thinner trading of their stocks by more short-term buyers. Continue reading

Big 4 Banks Soak Up Billions With Shares, Notes

China banks to raise up to $63 bln

I’ve largely ignored a steady stream of announcements by China’s big 4 state-run banks these past few weeks, but the latest plans released on the same day from 2 of those seemed like a good opportunity to finally focus on this exercise that could soak as much as 400 billion yuan ($63 billion) from the market. My main reason for ignoring the announcements was mostly because they were too numerous to write about individually, and also because much of the fund raising was expected. But the sheer size of this exercise, plus the broader implications for investors, seems like a good reason for writing now. Continue reading

Weibo: Execs Talk Smartphone War, Remember Robin Williams

Execs reveal new smartphone price cuts

I generally try to avoid writing too much about smartphones in this space, since the blogosphere often seems like little more than a soap box for high-tech execs to hype their latest products. But a series of exchanges between some of the industry’s top executives provided a fascinating snapshot of the current price wars now gripping China, as companies try to undercut each other to see who can offer the cheapest models. Meantime, some of those same executives were poking fun at the recent news that a famous Chinese comedian was planning to enter the space, again reflecting how overheated the market has become.

Elsewhere on a more solemn note, executives from some of China’s leading tech firms were also paying tribute in the blogosphere to Robin Williams, praising the US comedian for his ability to make other people laugh despite his own depression that ended with his suicide last week. Continue reading

News Digest: August 21, 2014

The following press releases and media reports about Chinese companies were carried on August 21. To view a full article or story, click on the link next to the headline.
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Apple, Samsung Face China Telco Freeze-Out

Telcos to cut spending on Apple, Samsung phones

Cost-cutting pressure is putting a squeeze on China’s 3 big telcos, creating an unusual set of conditions that could claim smartphone giants Samsung (Seoul: 005930) and Apple (Nasdaq: AAPL) as victims. The latest signs of trouble for the world’s 2 largest smartphone makers comes in the form of an article in the English language China Daily newspaper, calling on China’s big 3 mobile carriers to stop offering packages with Samsung and Apple smartphones and instead only offer models from domestic manufacturers like Lenovo (HKEx: 992), ZTE (HKEx: 763; Shenzhen: 000063) and Huawei. Further evidence of the pressure the telcos are feeling comes in an unrelated report, which has the trio denying reports that they’re preparing massive layoffs. Continue reading

Fosun, Tencent Eye Gas Stations

Fosun chases US Aurora, Sinopec unit

Gas stations were never that attractive to me as an investment, but a group of major firms seem to think differently as oil refining giant Sinopec (HKEx: 386; Shanghai: 600028) gets set to sell up to 30 percent of its retail arm. That’s my conclusion, following reports that domestic investment giant Fosun (HKEx: 656) and Internet leader Tencent (HKEx: 700), and Canadian retailer Alimentation Couche-Tard (Toronto: ATDb) are among the finalists bidding for a stake in the Sinopec unit. In separate headlines, the acquisitive Fosun is also reportedly in talks for another mega deal that would see it purchase the US unit of global insurance giant Swiss Re (Switzerland: SREX). Continue reading

Shanghai Street View: Untapped Water World

The watery town of Wuzhen
The watery town of Wuzhen

Stories of 2 accidents onboard cruise liners visiting Shanghai are shining a spotlight on the city’s abundant natural water resources and their big potential as attractions for both out-of-town tourists and local visitors. Shanghai truly has some of China’s most scenic and varied water resources, ranging from the quaint Suzhou Creek up to the mighty Pacific Ocean, all within easy driving distance.

But many of those resources remain woefully underdeveloped and underpromoted, resulting in a huge lost opportunity for our city. As a longtime resident, I seldom visit any of these scenic spots or take my out-of-town visitors to see them, even though I’ve considered doing so from time to time. Part of the reason is my own laziness, but another part is lack of must-see attractions and lackluster promotion. Continue reading

News Digest: August 20, 2014

The following press releases and media reports about Chinese companies were carried on August 20. To view a full article or story, click on the link next to the headline.
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  • Solar Boom Driving First Global Panel Shortage Since 2006 (English article)
  • Fosun (HKEx: 656) Said In Talks To Buy Swiss Re’s Aurora in US (English article)
  • Youku Tudou (NYSE: YOKU) Announces Q2 Unaudited Financial Results (PRNewswire)
  • Canada’s Couche-Tard, Tencent On Short-List In $16 Bln Sinopec Unit Sale -Sources (English article)
  • Healthcare App Maker Spring Rain Completes $50 Mln Series C Funding (English article)
  • Latest calendar for Q2 earnings reports (Earnings calendar)

Alibaba Eyes, Used Cars, Korea, Mid-Sept IPO

Alibaba ties up with China Grand Auto

E-commerce leader Alibaba is supposedly in a quiet period in the run-up to its upcoming multibillion-dollar IPO, but you would never know that based on the steady stream of headlines that keep emerging about the company. In all fairness, many of the IPO-related headlines are probably coming from investment banking sources who are trying to hype the offer that could be the world’s biggest ever by a tech firm. But I suspect many of those reports are probably coming from company sources, including the latest reports that Alibaba is preparing to launch a used car e-commerce platform and move into South Korea. Continue reading