BUYOUTS: Wanda’s Offer, eLong’s Exit, Yongle’s Backdoor

Bottom line: Dalian Wanda’s de-listing plan from Hong Kong is likely to succeed, while eLong could re-list in China and become the travel services provider for WeChat following its New York privatization.

Dalian Wanda joins homeward migration

A trio of new headlines are part of the recent homeward migration of offshore-listed Chinese companies, led by a highly anticipated $4.4 billion offer to privatize property giant Dalian Wanda (HKEx: 3699). Also making news is faded online travel agent eLong (Nasdaq: LONG), whose shareholders have just approved a privatization that will soon end its 12-year-old listing in New York. Finally there’s film production house Yongle Film and Television, which would have been a strong New York IPO candidate in a earlier era but is now in the process of making a backdoor listing in Shenzhen. Read Full Post…

CHIPS: China Repeats Flawed R&D Model With Qualcomm

Bottom line: China should abandon its model of trying to develop proprietary technology through government-backed initiatives, and focus instead on supporting leading private companies like Huawei to develop such products.

Qualcomm JV developing special server chip for China

China has started down a familiar but flawed path to creating its own cutting edge-technology, with reports last week that a joint venture backed by US telecoms giant Qualcomm (Nasdaq: QCOM) is developing a special microchip for the China market for use in computer servers that power the Internet. The effort looks strikingly similar to previous ones that typically saw China work with big foreign companies to develop technologies to compete with existing global products and standards. Read Full Post…

China News Digest: May 31, 2016

The following press releases and news reports about China companies were carried on May 31. To view a full article or story, click on the link next to the headline.
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  • Wanda Group Offers Record $4.4 Bln Price to Privatize Property Unit (English article)
  • Chinese Bidders Vie for ING Life in Record South Korea Insurance M&A: Sources (English article)
  • Yongli Film And TV Eyes Backdoor Listing Using Hongda Materials (Shenzhen: 002211) (Chinese article)
  • Kuka (Frankfurt: KU2) Should Remain in Europe Investor Hands, EU’s Oettinger Says (English article)
  • eLong (Nasdaq: LONG) Shareholder Approve Going Private Transaction (PRNewswire)

INTERNET: Regulator Rebukes Baidu for Malicious Apps

Bottom line: Baidu’s stock won’t suffer more short-term damage from a recent series of transparency scandals, but its reputation could suffer over the longer term.

Baidu software under fire
Baidu software under fire

Leading search engine Baidu (Nasdaq: BIDU) is fast becoming synonymous with the word “opaque” due to long-standing practices that have helped it become one of China’s most valuable Internet companies, often by exploiting unsuspecting consumers. Following a recent series of scandals involving various opaque practices, the company is back in the headlines after a number of apps from its mobile assistant store landed on a malware black list from China’s telecoms regulator. Read Full Post…

IPOs: BOC Aviation Set for Take-Off, P2P Lender Lufax Delays

Bottom line: BOC Aviation’s stock will debut with a 5-10 percent gain when trading starts on Wednesday, while Lufax’s delay of its IPO plan looks prudent until China’s P2P lending sector settles down.

BOC Aviation set for strong debut

After running into some early minor turbulence, Asia’s second biggest IPO of the year is set to take off later this week in Hong Kong when aircraft leasing company BOC Aviation begins trading in what should be a relatively buoyant debut. But the ride to market is looking a bit rockier for Lufax, with reports that what could become the first IPO for a P2P lender is being delayed until next year. Lufax had earlier signaled it planned to make its listing this year, most likely in Hong Kong or Shanghai. But its plan is being delayed as Beijing moves to clean up the nation’s unruly P2P lending market.  Read Full Post…

SMARTPHONES: Apple’s New India Love Affair Leaves China Sweating

Bottom line: China’s sudden worries over Apple’s new love affair with India are probably overblown, but do reflect Apple’s need to find new growth engines to offset its rapidly cooling China sales.

China frets over Apple’s new dance with India

Apple (Nasdaq: AAPL) CEO Tim Cook’s surprise first trip to India 2 weeks ago may be firmly in the history books, but it’s still front page news in the Chinese headlines, revealing an unexpected angst in the world’s biggest smartphone market. China has grown accustomed to being at the center of Apple’s universe, as Cook has made numerous trips to the country over the last 3 years in a bid to curry favor with Beijing and Chinese consumers. So the sudden trip to India, a rival with China in many ways, appears to be causing some unexpected sweating by Chinese who worry they may soon lose their spot as the leading object of Apple’s affections. Read Full Post…

China News Digest: May 28-30, 2016

The following press releases and news reports about China companies were carried on May 28-30. To view a full article or story, click on the link next to the headline.
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  • China’s Zoomlion (HKEx: 1157) Abandons Pursuit of Crane Maker Terex (NYSE: TEX) (English articlen
  • MIIT Releases List of 29 Malwares, Including 4 on Baidu’s (Nasdaq: BIDU) Mobile Assistant (Chinese article)
  • P2P Lender Lufax May Delay IPO to 2017 Due to Market Turmoil, Regulator Queries (Chinese article)
  • Tencent (HKEx: 700), Weiying Invest $85 Mln in South Korea’s YG Entertainment (PRNewswire)
  • Qualcomm (Nasdaq: QCOM) JV Developing Customized Mobile Chip for China (Chinese article)

SMARTPHONES: Lenovo Eyes Friendlier China as Foreign Investors Flee

Bottom line: Lenovo’s smartphone business could ultimately get spun off and separately listed in China, as its continued weak performance could force out CEO Yang Yuanqing later this year.

Lenovo posts first annual loss in 6 years

There’s really not much positive to say about the latest earnings report from struggling PC and smartphone maker Lenovo (HKEx: 992), which has just posted its first annual loss in 6 years. Perhaps we could find an upbeat note in word that the company is on track to achieve $1.35 billion in annual cost savings, though even that’s related to widespread layoffs and other cuts related to its faltering businesses. One might also find rays of hope in Lenovo’s admission that its earlier purchase of Motorola has largely failed, or that it might consider a re-listing in China. Read Full Post…

BUYOUTS: Autohome, iKang, Wanda in Twisted Buyout Tales

Bottom line: Privatization plans by Autohome and iKang will face long delays due to shareholder resistance and rival bids, while Wanda Commercial’s similar buyout will proceed soon after some technical issues are resolved.

Autohome, iKang take buyout clashes to court

Three of the larger privatization bids by offshore-listed Chinese firms are running into snags, hinting at a growing wave of resistance to such offers considered by many as too low and opportunistic. Two of the most colorful tales involve online car site Autohome (NYSE: ATHM) and private clinic operator iKang (Nasdaq: KANG), whose management-led buyout deals both hit snags due to unexpected third-party developments. In the latest twist to those stories, Autohome is now taking legal action to prevent a separate share sale that could kill its own management-led buyout bid; while iKang is playing legal games with a rival bidder that trumped an original management-led buyout plan. Read Full Post…

LEISURE: Wanda Challenges Disney with Park-Building Binge

Bottom line: Wanda’s recent theme park building spree looks aimed at challenging Disney, but many of its new resorts are likely to fail due to lack of experience and poor choice of locations.

Wanda breaks ground on new Guilin park

Watch out, Disney (NYSE: DIS). Chinese real estate giant Wanda Group has recently embarked on a global theme park building binge that would put Disney to shame, and certainly outpaces the US entertainment giant in terms of investment dollars. This month alone Wanda is getting set to open a multibillion-dollar park in the interior Chinese city of Jiangxi, and it has also just announced the ground-breaking for another mega-park in the scenic southern tourist city of Guilin. Then there’s its plans for a $3.3 billion park near Paris announced in February, which would be its first major overseas resort. Read Full Post…

China News Digest: May 27, 2016

The following press releases and news reports about China companies were carried on May 27. To view a full article or story, click on the link next to the headline.
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  • Wanda Commercial (HKEx: 3699) buyout offer delayed by regulator’s queries – sources
  • Lenovo (HKEx: 992) Announces Fiscal Q4, Full Fiscal Year Results (HKEx announcement)
  • Huawei Launches MateBook Notebook PC in China, Starting at 4,988 Yuan (Chinese article)
  • Baidu (Nasdaq: BIDU) Ruled Guilty of Unfair Competition, to Pay Dianping 3.23 Mln Yuan (Chinese article)
  • Telstra’s Autohome (NYSE: ATHM) Sale Faces Cayman Islands Court Action (English article)