TELECOMS – New Comments Hint At Qualcomm Settlement Soon

Bottom line: China is likely to wrap up its probe of Qualcomm by year end with a record fine of more than $1 billion and Qualcomm’s agreement to significantly change its licensing practices.

End draws near in Qualcomm probe

After filling the headlines for much of the summer, news on the flood of anti-trust investigations against major foreign firms suddenly came to a halt in the fall, giving the movement an almost seasonal feel. But the story looks set to pop back into the headlines soon, with signs that China’s National Development and Reform Commission (NDRC) is getting ready to levy a record fine for anti-competitive behavior against leading global cellphone chip maker Qualcomm (Nasdaq: QCOM). The signals are coming in new comments this week from Qualcomm’s top 2 executives, as well as from China’s Premier Li Keqiang. Continue reading

INTERNET – Ballooning Losses Slowly Killing Renren

Bottom line: Renren’s situation is likely to continue deteriorating as its core SNS business struggles and it sells off assets, with the company likely to close up shop or sell itself within the next 2 years.

Renren losses balloon

During the last boom for Chinese Internet IPOs in late 2010 and early 2011, one of the last names to make a successful listing was money-losing social networking (SNS) leader Renren (NYSE: RENN), which billed itself as the Facebook (Nasdaq: FB) of China. More than 3 years later, the company is still losing money and the figure is starting to balloon, according to Renren’s just released quarterly earnings.

Somewhat surprisingly, Renren still has a market value of $1 billion, even as it shows every sign of becoming a bargain buy for an acquirer or going out of business completely. But this is China, and Internet stocks that normally wouldn’t get any attention from US investors can still get noticed when they carry the “made in China” label. Continue reading

Shanghai Street View: Absent Autumn

No autumn leaves on Hunan Lu
No autumn leaves on Hunan Lu

It seems that old habits die hard when you’re among the thousands of sweepers clad in signature blue smocks who work tirelessly to keep Shanghai clean. That’s the lesson I learned when I took to our city’s streets this week to check out an innovative program to enhance the autumn atmosphere in the former French Concession area.

The new program was simple and quite creative, attempting to create a feeling of fall by allowing fallen leaves to accumulate throughout the day on several tree-lined streets. Such leaves are typically cleared away by sweepers within minutes of touching the ground, keeping our streets spotless but also deprived of much local color. Continue reading

News Digest: November 21, 2014

The following press releases and media reports about Chinese companies were carried on November 21. To view a full article or story, click on the link next to the headline.

  • Alibaba (NYSE: BABA) Sells $8 Bln Of Bonds In Company’s Debut Sale (English article)
  • Renren (NYSE: RENN) Announces Unaudited Q3 Financial Results (PRNewswire)
  • China Mobile (HKEx: 941) Says Won’t End Handset Subsidies (Chinese article)
  • Tencent (HKEx: 700) Invests In Wi-Fi Solutions Provider ‘WiWide’ (English article)
  • BMW (Frankfurt: BMWG) China CEO Sees Margins Narrowing, Expects To Beat Market (English article)
  • Latest calendar for Q3 earnings reports (Earnings calendar)

INTERNET – Google Eyes China App Store, Hardware Coming?

Bottom line: Google is likely to get Beijing’s permission to open a China version of its app store that could launch next year, paving the way for the roll-out of its smartphones in the market.

Google eyes China app store

A flurry of new reports are saying that global Internet giant Google (Nasdaq: GOOG) is planning to re-enter China by opening an app store there, in what would be a major strategic turnaround for the company. The real story of Google in China is quite complex, and to say it withdrew from the market in 2010 after a high profile spat with Beijing over censorship is quite an oversimplification. The more accurate story is one that’s seen Google diversify from its core desktop-based Internet services to an increasingly mobile portfolio that also includes a growing hardware component. That hardware element of its diversification could well be the focal point for a new China foray if the latest reports about Google’s plan to open a China app store are true. Continue reading

INTERNET – E-Commerce In Bloody Sell-Off On Ho-Hum Results

Bottom line: The post-November 11 sell-off for Chinese e-commerce shares will persist for the next few months until most trade at or slightly below their IPO levels, and then shares will trade mostly sideways next year.

E-commerce shares under presssure

Black Friday may only be a week away in the United States, but the landscape for China’s high-flying e-commerce companies was notably red with blood in the latest Wall Street trading session after a number of players issued new financial results. The numbers weren’t all that bad for the red-hot Vipshop (NYSE: VIPS), though people were probably expecting more from this company whose shares have exploded 40-fold since their IPO 2 and a half years ago. The picture was far more mixed for second-tier e-commerce players Jumei (NYSE: JMEI) and LightInTheBox (NYSE: LTIB), which also isn’t surprising due to the stiff competition in the market. Continue reading

FINANCE – HK-Shanghai Link Could Spark Brokerage Tie-Ups

Bottom line: The latest M&A in China’s brokerage sector involving Essence Securities could presage a new wave of tie-ups between Chinese and foreign brokerages, boosted by the Hong Kong-Shanghai stock exchange link.

Essence joins brokerage consolidation trend

A new reverse takeover involving a major Chinese brokerage is shining a spotlight on the potential for new deals in the sector following this week’s launch of a ground-breaking program linking the Hong Kong and Shanghai stock exchanges. This particular deal involves Essence Securities, which is becoming a publicly traded company following its purchase by Shanghai-listed textile firm Sinotex Investment (Shanghai: 600061). But more intriguing is the very real possibility that major foreign brokerages may start to look for tie-up opportunities with Chinese peers in anticipation of synergistic partnerships to take advantage of the new Hong Kong-Shanghai Connect program. Continue reading

News Digest: November 20, 2014

The following press releases and media reports about Chinese companies were carried on November 20. To view a full article or story, click on the link next to the headline.

  • Google (Nasdaq: GOOG) To Launch Its App Store In China – Report (English article)
  • Alibaba (NYSE: BABA) Said To Prepare Inaugural Bond Issue For Today (English article)
  • Qualcomm (Nasdaq: QCOM) Sees Progress In Talks In China On Licensing Fees (English article)
  • E-House (NYSE: EJ) Reports Q3 Results, Declares Leju Share Distribution (PRNewswire)
  • Telcos To Offer Full 4G Service Next Year, Unicom Aims To Pass China Mobile (Chinese article)
  • Latest calendar for Q3 earnings reports (Earnings calendar)

IPOs: eHi Sputters; Huayi, iQiyi Raise Funds

Bottom line: A weak debut for eHi reflects waning investor enthusiasm for Chinese IPOs, while a new $585 million investment in Huayi Bros reflects strong growth prospects for the independent filmmaker.

eHi IPO sputters out of the gate

A flurry of fund-raising events are in the headlines today, led by a weak trading debut for car rental specialist eHi Car Services (NYSE: EHIC) and a big capital infusion for Huayi Bros (Shenzhen: 300027), one of China’s leading independent film makers. Rounding out the activity are reports confirming that smartphone high-flyer Xiaomi has made its largest investment to date, spending $300 million for a stake in iQiyi, China’s second largest online video site owned by Internet search leader Baidu (Nasdaq: BIDU). Continue reading

GUEST POST – Amazon Still Can Win In China, For It Is Not Alibaba

Bottom Line: Despite strong competition, e-commerce giant Amazon stands a chance of success in China by leveraging its unique strength supported by its global logistic system and trusted brand.

By Lu Jin

Amazon launches imported goods store for China

Even as numerous buyers and sellers in China created another record online shopping spree in the virtual malls of Alibaba (NYSE: BABA) on Double Eleven day last week, global e-commerce giant Amazon (Nasdaq: AMZN) also did something new: It launched its Chinese language online store offering imported goods, called “shop overseas”.

Voices were heard in the market in no time: “Here comes the wolf!”

Just how bad is this “wolf”, or is the wolf really even coming? Continue reading

WEIBO – Double Eleven Intoxication, Moto’s China Homecoming

Execs boast of big Double Eleven sales

Chatter in the microblogging realm this past week was squarely focused on the Double Eleven shopping binge that saw e-commerce sites and smartphone makers log impressive sales on the date also known as Singles Day. But not everyone was boasting about huge sales, as executives from early e-commerce leader Dangdang (NYSE: DANG) and smartphone aspirant Smartisan were both uncharacteristically quiet on their microblogs, hinting at mediocre results on the shopping holiday.

The situation was just the opposite at e-commerce leader Alibaba (NYSE: BABA), which single-handedly commercialized a day that now generates more sales than even Black Friday or Cyber Monday in the US. That rapid success in such a short time was putting a strain on Alibaba’s Alipay electronic payments arm, which reportedly was restricted to processing payments from Alibaba’s own e-commerce sites. That meant other companies’ sites often couldn’t accept Alipay for payments on their sites during the day.

Continue reading