I don’t usually like to toot my own horn, but my prediction last month that we could soon see a major fund-raising exercise by high-flying e-commerce firm Vipshop (NYSE: VIPS) has come to pass, with word that the firm is preparing to sell stock and bonds worth more than $600 million. Investors weren’t extremely excited about the plan, with Vipshares falling slightly after the announcement came out. But considering that the company’s shares have risen about 8-fold over the last year alone, the reception wasn’t all that bad either. From the strategic perspective, this new massive fund raising hints that Vipshop wants to take advantage of the recent wave of M&A sweeping China’s e-commerce space, and I expect we could see some big deal announcements later this year. Continue reading
After an unsuccessful earlier listing for one of its units, online real estate giant E-House (NYSE: EJ) is preparing to try again with plans for a New York IPO for its Leju division. The company has been quite cagey in this latest listing plan, giving little details about Leju’s background and why the unit deserves its own separate listing. Perhaps that’s because a little checking reveals that this “new” offering is really just a recycled listing for a previous company jointly-owned by E-House and leading web portal Sina (Nasdaq: SINA). Continue reading
A new survey on marriage patterns in Shanghai is casting an interesting spotlight on what it means to be an outsider in one of China’s most international cities, whose high-profile embrace of foreigners and foreign things often overshadows a much bigger influx of domestic immigrants. The survey also draws attention to the bigger Chinese fondness for characterizing everything as either “insider” or “outsider”, a centuries-old tradition that Shanghai could and should take the lead in discarding.
The “insider” and “outsider” mentality goes way back in Chinese history, and is physically present across the Chinese landscape and deeply embedded in the language. Its most potent physical symbol is the storied Great Wall, which drew a clear line between the inside, or civilized China to the south, and the outside, populated by barbarian tribes to the north. Continue reading
The following press releases and media reports about Chinese companies were carried on March 11. To view a full article or story, click on the link next to the headline.
- JD.com Rolls Out Financial Product Similar To Yu’ebao To Boost IPO (Chinese article)
- E-House (NYSE: EJ) Announces Leju’s Plan For Proposed IPO (PRNewswire)
- Home Inns (Nasdaq: HMIN) to Acquire Yunshang Siji Hotel Management Co (PRNewswire)
- ZTE (HKEx: 763), The9 (Nasdaq: NCTY) to Release Game Console – Source (English article)
- Ackman To Renew Attack On Herbalife (NYSE: HLF) With Aim On China Business (English article)
- Latest calendar for Q4 earnings reports (Earnings calendar)
The new week is just beginning, but it could well go down as a pivotal moment in Chinese Internet history with Tencent’s (HKEx: 700) new announcement of an e-commerce alliance with JD.com that could threaten the dominance of sector leader Alibaba. The tie-up, which was first rumored last month, will see Tencent pay $215 million for 15 percent of JD.com, which will also receive some of Tencent’s e-commerce assets including a minority stake of its flagship Yixun.com B2C service. (company announcement) The companies will merge their e-commerce businesses, creating a new player with nearly a quarter of China’s B2C e-commerce market. Continue reading
As I longtime China resident, one of the most fascinating things for me to watch over the last 2 decades has been the rapid rise of the country’s private sector, which has spawned such big names as real estate giant Wanda Group and Internet leader Tencent. But a big majority of China’s economy still comes from the state-run sector, where many of the largest companies like Sinopec and China Mobile have also thrived on a combination of innovation and also strong protection from Beijing.
While these government-owned giants have thrived, the nation’s thousands of smaller state-run firms have faced a more uncertain fate. Many of these suffered from poor management, and quietly closed over the years as they failed to compete with better-run private sector players. Continue reading
After a massive rally over the last year, shares of solar panel makers could be set for a few months of winter following a disappointing earnings announcement from superstar Canadian Solar (Nasdaq: CSIQ) and a debt default from second-tier player Chaori Solar (Shenzhen: 002506). Such a correction was almost inevitable after last year’s huge rally and shouldn’t be cause for concern among long-term buyers of shares in top players like Canadian Solar. But shareholders of second-tier firms like Chaori might think strongly about selling their stock, as these smaller companies could easily end up getting wiped out or sold for bargain prices in the sector’s ongoing consolidation as it emerges from a 2-year downturn.
The following press releases and media reports about Chinese companies were carried on March 8-10. To view a full article or story, click on the link next to the headline.
- Tencent (HKEx: 700) Clinches JD.com Investment, Pair To Merge E-Commerce (Chinese article)
- Alibaba May Invest $1 Bln In Online Video Site Wasu (Shenzhen: 000156) (Chinese article)
- Disney (NYSE: DIS), Shanghai Media Group To Develop Disney-Branded Movies (English article)
- City of Dalian Order 1,200 BYD (HKEx: 1211) Electric Buses (Businesswire)
- Shanghai Jin Jiang Hotels (Hong Kong: 2006) Scraps Bond Issue (English article)
- Latest calendar for Q4 earnings reports (Earnings calendar)
The list of major Chinese entertainment firms jumping on the Hollywood bandwagon has just gained an important new member with word that Huayi Bros (Shenzhen: 300027) is on the cusp of investing in a major new production house. I’ve been following the China media scene for more than a decade now, and can say that Huayi was one of the nation’s earliest major players to emerge in a space that was extremely difficult for years due to tough restrictions and extreme fragmentation. But Huayi has shown not only an ability to survive, but also to thrive in a market where the movie theater business is suddenly booming and online video has quickly become an important new revenue source. Continue reading
I had a sense of deja vu on reading reports that a group of workers at an IBM (NYSE: IBM) plant in south China had gone on strike, unhappy about the terms of their transfer to domestic PC giant Lenovo (HKEx: 992) under a recent M&A deal. It seems the workers in the city of Shenzhen were offered similar pay and other terms under the transfer, which came as the result of Lenovo’s pending purchase of IBM’s low-end server business announced in January. But the workers were still unsatisfied, feeling they should get higher pay for agreeing to work at a domestic company rather than the more prestigious IBM. Continue reading
The 4G strategies of China’s 2 smaller telcos are starting to emerge under an unusual hybrid scheme being rolled out by the nation’s telecoms regulator, and the path being pursued by China Unicom (HKEx: 762; NYSE: CHU) certainly doesn’t look encouraging. Both Unicom and China Telecom (HKEx: 728; NYSE: CHA) have been given the nod to launch commercial 4G service using a homegrown standard known as TD-LTE, even though both plan to build their main networks using a more globally tested technology technology called FDD-LTE. But whereas China Telecom is making minimal investment in TD-LTE, Unicom seems intent on wasting billions of dollars, with word that it has awarded contracts to 8 companies to start construction of a network based on the technology. (Chinese article) Continue reading