Shanghai Street View: Vanishing Buses

Long distance buses set for consolidation

New plans to consolidate the dozens of long-distance bus stations throughout Shanghai made me slightly nostalgic, reflecting the diminishing use of buses for inter-city travel over the last 2 decades. Anyone who only reads the news might never be aware of this rapid shift, since the papers are constantly filled with reports on the latest horrific collision or fiery crash involving a long-distance bus that leaves dozens of travelers dead.
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News Digest: September 24, 2014

The following press releases and media reports about Chinese companies were carried on September 24. To view a full article or story, click on the link next to the headline.
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  • After Delay, Microsoft (Nasdaq: MSFT) Xbox One China Launch Set For Sept 29 (English article)
  • Jack Ma Becomes China’s Richest Man, Lei Jun Enters Top 10 – Hurun Report (Chinese article)
  • iPhone 6 Still Being Reviewed, Results Expected Shortly – MIIT Chief (Chinese article)
  • Shanghai Gov’t Requires Officials To Use Domestic Brand Smartphones (English article)
  • Shunfeng (HKEx: 1165) 500 Mln Yuan Ningxia Solar Power Station Hits Obstacle (Chinese article)

Youku Tudou: A Buyout Target?

Youku Tudou: buyout ahead?

I decided to write about leading online video site Youku Tudou (NYSE: YOKU) today after reading a new report that says the company has posted a hefty 1.77 billion yuan ($290 million) in losses since its New York IPO 4 years ago. A little math will show that translates to average losses of about $20 million in each of the approximately 15 reporting quarters since it went public in December 2010. Much has changed in China’s online video space over that time, including a recent regulatory campaign to stop Youku Tudou and its peers from competing directly with traditional TV stations. Continue reading

Alibaba, Proxies Pull Back As Correction Begins

Alibaba shares shed 4 pct on 2nd trading day

Alibaba (NYSE: BABA) fever has finally peaked, as shares of the e-commerce leader and its 2 major proxies took a needed breather after a turbo-charged IPO that made it China’s most valuable Internet firm. As a final footnote, the company also made the widely expected announcement that its underwriters exercised their rights to buy additional shares in the offering, officially making it the biggest IPO of all time. But the looming question for now is whether the sell-off on the second day of trading is short-term or the start of a much-needed correction. Regular readers will know my forecast is that the stock is set for turbulent trading over its first month or two, before it moves steadily downward over the next year to levels closer to its IPO price. Continue reading

Luxury Car Crackdown Shifts To Transparency Drive

NDRC on car pricing transparency drive

The largest in a string of Chinese antitrust investigations this year has begun nearing closure, with word that Beijing regulators are crafting new rules that will require greater transparency from luxury car makers regarding their pricing policies. The new rules would follow a series of massive fines against both luxury automakers and their parts suppliers, who were penalized for charging excessively high prices for after-sales replacement parts and maintenance services. Continue reading

News Digest: September 23, 2014

The following press releases and media reports about Chinese companies were carried on September 24. To view a full article or story, click on the link next to the headline.
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  • Alibaba (NYSE: BABA) Underwriters Exercise Option To Buy Additional ADSs (Businesswire)
  • Shanghai Husi Lays Off 340, Says Factory Unable To Reopen In Near-Term (Chinese article)
  • Youku Tudou (NYSE: YOKU) Piles Up 1.77 Bln Yuan In Losses In 4 Years Since IPO (Chinese article)
  • Focus Media, Kingsoft’s (HKEx: 3888) Westhouse Partner On Mobile Gaming (English article)
  • Lenovo (HKEx: 992) Workers Move Into Motorola HQ As Merger Nears End (Chinese article)

China Closes Book On GSK Case With Record Fine

GSK criminal probe ends with record fine

One of the highest profile cases in a recent series of probes against multinationals in China has reached an emphatic but reasonably just conclusion, with word that Beijing has fined British drugmaker GlaxoSmithKline (London: GSK) nearly half a billion dollars and handed several of its top local executives suspended jail sentences. I was never a big fan of this investigation, which saw GSK pursued for bribing doctors and other medical professionals to buy its drugs. That’s not because I think GSK was innocent in this case, but rather because I think the company was unfairly singled out for punishment for corrupt practices that are widespread in China’s business culture. Continue reading

Alibaba, CAR Soar In NY, HK Trading Debuts

China Auto IPO draws on Alibaba fever with strong debut

I’m a bit reluctant to write more today about the historic New York IPO for e-commerce giant Alibaba (NYSE: BABA), whose extremely strong trading debut surprised even me. But I would be somewhat remiss if I didn’t at least mention the final phase of this massive offering, which has made Alibaba the world’s second largest Internet company behind only Google (Nasdaq: GOOG). At the same time, another far more low profile trading debut in Hong Kong for auto rental specialist CAR Inc (HKEx: 699) has also done quite well, extending a nearly yearlong window for overseas listings by Chinese firms. Continue reading

Smartphone Stress In Coolpad Cuts, China Mobile ‘Naked’ Policy

Coolpad cuts 10 pct of workforce

Several news bits are casting a spotlight on growing stress in the low-end smartphone market, where a crowded field of Chinese companies have been engaged in a cut-throat series of price wars for the past year. Leading the headlines is word that Coolpad, a leading homegrown brand, is cutting 10 percent of its workforce as it explores a new joint venture with some of its distributors. At the same time, other reports say that China Mobile (HKEx: 941; NYSE: CHL) won’t be coming to the rescue of these struggling companies by selling their smartphones to its subscribers at subsidized prices, as the leading Chinese carrier embarks on its own cost-cutting campaign to bolster its sagging profits. Continue reading

News Digest: September 20-22, 2014

The following press releases and media reports about Chinese companies were carried on September 20-22. To view a full article or story, click on the link next to the headline.
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  • Alibaba (NYSE: BABA) Jumps 38 Pct In Debut, Becomes 2nd Largest Internet Firm (Chinese article)
  • China Fines Drugmaker GSK (London: GSK) Record $489 Mln For Bribery (English article)
  • Car Makers Ordered To Openly Disclose Maintenance Fees Starting Next Year (Chinese article)
  • Chinese Auto Rental Company CAR Inc (HKEx: 699) Soars 28 Pct In HK Debut (English article)
  • Microsoft (Nasdaq: MSFT) Delays Xbox One China Launch To Before Year-End (Chinese article)

iPhone Chases China Window, Oct Launch Likely

October China launch likely for iPhone 6

With Alibaba’s blockbuster IPO nearly in the past, attention will turn over the next few weeks to tech giant Apple (Nasdaq: AAPL) and the mystery surrounding the lack of a launch schedule for its new iPhone 6 in China. While Alibaba is a story of hype, the iPhone 6 saga is quickly becoming a tale of intrigue, as everyone tries to guess what’s happening behind the scenes to delay this other highly anticipated event. China’s own media are helping to fuel the suspense, with a new report from the Xinhua central news agency providing clues about what looks like a tangle with China’s censors. Continue reading