Media/Entertainment

youngchinabiz.com : latest Business news about Media – Entertainment in China by expert / journalist Doug Young : more than two decades of experience in writting about Chinese Companies

MEDIA: Qutoutiao in Fund-Raising Frenzy

Bottom line: Qutoutiao’s recent flurry of fund-raising, including a major  loan from Alibaba, underscores rising confidence in the news aggregator after its lackluster IPO last year.

Qutoutiao in new fund-raising frenzy

News aggregator Qutoutiao (Nasdaq: QTT) is making up for lost time following its lackluster IPO last fall that raised far less than its original target. The company has just announced a new share sale that will generate about $30 million in cash, just days after raising another $171 million from e-commerce giant Alibaba (NYSE: BABA).

Investors didn’t seem too impressed with the latest cash-raising exercises, with Qutoutiao’s shares shedding some 8 percent in the last trading session. That drop appears related to announcement of the pricing of this latest share sale, since the company first announced the move a few days ago. Regardless of that, this does provide a good opening for us to take a closer look at this company. Read Full Post…

INTERNET: Online Education Looks Good in Principle

Bottom line: The online education sector is currently in a teething phase that could last for the next two years, but could offer big potential for investors who can separate the wheat from the chaff. 

Big potential in online education?

Today I thought I’d look at some of the major online education stocks to hit the market over the last two years, most turning in a decidedly negative performance that may or may not be justified. The latest of those, Koolearn (HKEx: 1797) stumbled out of the gate late last week with a flat trading debut, and since has posted some minor gains that probably don’t mean too much. (English article)

Koolearn’s anemic performance actually looks quite strong when compared with some of the others that have floated shares over the last two years. Most of those are down moderately to sharply over the last 52 weeks, led by a 67 percent plunge for one called Puxin (NYSE: NEW) and a 55 percent slide for another called Sunlands (NYSE: STG). Read Full Post…

SMARTPHONES: Is Apple’s Price Cutting Enough to Salvage China?

Bottom line: Apple will continue discounting its iPhones in China to stop its sinking market share, which could slow but not halt its decline in the face of growing competition from the likes of Huawei.

Apple’s retail partners pare back China iPhone prices

Following a break of a month, I’m returning to my writer’s seat with discussion of the China outlook for tech giant Apple (Nasdaq: AAPL), which has turned to a very un-Apple-like strategy of discounting its products in the world’s largest smartphone market. China has been a fickle place for Apple, at one point accounting for nearly a quarter of the company’s global sales, as brand-conscious Chinese paid big premiums for trendy iPhones. That’s hardly the case now, with China accounting for just 15.6 percent of Apple’s total sales in its last quarterly report. Read Full Post…

E-COMMERCE: Alibaba Eyes Germany, UK and Video Streaming

Bottom line: Alibaba’s interest in Metro’s China operations is part of its new retail strategy, while the purchase of a British payments company by its Ant Financial unit could give it a strong toehold in the European payments market.

Alibaba in new shopping spree

After a period of relative quiet, e-commerce giant Alibaba (NYSE: BABA) is suddenly springing into three relatively major headlines simultaneously on the investment front. Two have a European angle, one involving a major potential investment in German retailer Metro and the other in a British financial services provider by its Ant Financial affiliate. The other is a trans-Pacific deal of sorts, and has the company investing in Bilibili (Nasdaq: BILI), a leading U.S.-listed Chinese video streamer.

In all honesty, this particular flurry of deals seems a bit random and it’s almost certainly coincidence that all are in the headlines at the same time. But that said, each does reflect one or more tendencies by this hyperactive company, which I’ve previously said has far more cash than it knows what to do with.  Read Full Post…

IPOs: With Shutdown in Past, Live Broadcaster Douyu Lines Up to List

Bottom line: A slowdown in New York IPOs by Chinese firms at the start of the year was largely caused by the government shutdown, and activity could soon pick up starting with a listing by leading live broadcaster Douyu.

Government shutdown hits IPOs

We’ll kick off my first post of the Lunar New Year with a look at New York IPO activity in the first part of 2019, or more precisely the lack of activity for Chinese companies. If this were any other year, I would say such a silence is probably normal, since in the past the first quarter has been a difficult period due to the western New Year holiday on Jan. 1 followed rapidly by the Chinese New Year, which this year fell on Feb. 5.

But this is no ordinary year, coming off a 2018 that was one of the busiest years for Chinese IPOs in New York and Hong Kong in quite some time. This year got off to a relatively quick start with a New York IPO filing to raise up to $300 million by financial technology (fintech) company Futu, which actually came at the very end of last year. (English article) Now the latest reports are saying video streaming site Douyu has just made its own confidential filings for an even bigger offering that could raise up to $500 million. (English article) Read Full Post…

GAMES: Tencent, NetEase Shunned as Game Approvals Resume

Bottom line: Tencent and NetEase will become long-term beneficiaries of a cleanup of China’s online game sector, despite their lack of new launches so far following the recent end of a 10-month freeze on approval of new titles.

No new approvals for Tencent, NetEase

China’s 10-month freeze on approval of new online games has official ended, but don’t tell that to industry leaders Tencent (HKEx: 700) and NetEase (Nasdaq: NTES). China’s gaming regulator has officially just published its latest list of newly approved game titles, which is its third since it resumed such approvals in late December. (English article)

As with the first two lists, observers are focusing more on who wasn’t represented rather than who was. And as with the first two lists, both Tencent and NetEase were absent once again. That raises the question of what the regulator may be trying to do, and whether this could have long-term ramifications for China’s two leading online game companies. Read Full Post…

INTERNET: Amnesty, Employees Launch Google Attack

Bottom line: A major new campaign calling on Google to abandon its plan to return to China’s search market will add pressure on the company to reconsider its decision, but is unlikely to succeed unless the pressure grows significantly stronger.

Amnesty launches petition to protest Google’s China return

If Google (Nasdaq: GOOG) CEO Sundar Pichai thought he could quietly launch a new filtered China search engine without any major backlash, he’s quickly finding out otherwise. The search giant’s controversial plan to return to the world’s biggest search market is facing its stiffest resistance to date, in a frontal assault coordinated by human rights group Amnesty International and Google’s own employees.

The message from both groups is the same: Don’t do it. In Amnesty’s case, the group has launched an online petition (announcement) calling on Google not to go through with the plan, code named Dragonfly, that was first uncovered back in August. (previous post) At the same time, a group of more than 300 Google employees has signed a petition urging the company to reconsider its China plans on the blogging site Medium. (online petition) Read Full Post…

SEARCH: Google Takes Offensive on China Search Return

Bottom line: Google’s decision to finally talk openly about its plan to return to China looks smart though slightly late, by explaining the desperate need for alternatives in the massive though tightly controlled search market.

Google breaks silence on plan to return to China search

After staying mum on the subject for quite some time, Google (Nasdaq: GOOG) is finally speaking out on its controversial decision to return to the China search market. Its CEO Sundar Pichai broke the company’s silence on the matter at an event this week sponsored by Wired magazine, going on the offensive to try and defend his company’s decision.

It does seem like the company should have taken this kind of more aggressive approach sooner, rather than waiting more than two months from when the news first broke. (previous post). From my perspective as someone living in China, this country is really in dire need of an alternative to current search leader Baidu (Nasdaq: BIDU), and the argument has nothing to do with propaganda or censorship.  Read Full Post…

IPOs: What’s Up With Spikes, Declines for Nio, Qutoutiao?

Bottom line: Big volatility for first-week trading debuts of Nio and Qutoutiao point to problems with pricing and investor indecision in the current market, and could point to more rocky debuts for at least the next few weeks. 

Nio, Qutotiao go “pop”, but then fizzle

When I previously wrote about low expectation for an IPO last week by new energy startup Nio (NYSE: NIO), I wasn’t all that surprised when the company notched a more upbeat New York debut with a 5 percent gain on its first trading day. After all, the company had been so beaten down during the IPO process that this was something akin to a dead-cat bounce and a small present for the money-losing company as it entered the publicly traded realm.

But then the stock suddenly soared by more than 70 percent on its second trading day — something one seldom sees with new IPOs. I was tempted to write the whole thing off as manipulation, even though I had no direct evidence, since the company sold around 90 percent of its IPO shares to just 10 investors. That meant that a couple of large investors could have simply traded their huge blocks of shares between each other at inflated prices, and neither would have lost any money in the process. Read Full Post…

INTERNET: Google Feels China Backlash From Own Employees

Bottom line: An internal petition calling on Google to be more transparent about its plans to return to China represents the first major backlash to the move, but is unlikely to dissuade the company from going ahead.

Google employees question China return

When the news first broke a couple of weeks ago that Google (Nasdaq: GOOG) was planning a return to China’s search market, many predicted that western sources would be quick to criticize the plan, even though few voices have actually spoken out so far. Fast forward a couple of weeks, when we are hearing the first sounds of what’s likely to become a sea of protests if and when the company actually makes its China search homecoming.

Perhaps not too surprisingly, the first salvo in the storm of protest that could soon emerge is coming from within Google itself, with word that employees are circulating a petition raising questions about the reported move. (English article) This kind of internal debate could be especially troubling, since the last thing that Google wants is an uprising within its own ranks at such a delicate time. Read Full Post…

INTERNET: Tencent Slumps Under Government Wrist-Slap

Bottom line: Tencent’s sudden pulling of a popular game just days after its release shows no one is exempt from Beijing’s recent online entertainment clampdown, which could weigh on stocks of related company for the next few months.

Tencent gets wrist slapped by regulator

A new statement from leading online game operator Tencent (HKEx: 700) is dripping with contrition, following the sudden yanking of a new hit game from its platform that apparently didn’t pass muster with the regulator. This latest Tencent news, combined with some downbeat earnings from live broadcasting specialist Huya (Nasdaq: HUYA) and its parent YY (Nasdaq: YY), have cast a chill over Chinese gaming and video stocks, which took a beating in Tuesday trade.

Tencent has been leading the crowd, shedding 3.4 percent on Tuesday and down another 3.2 percent in early trade on Wednesday. Those two declines have collectively wiped out more than $4 billion in market value from one of the world’s most valuable Internet companies. The bloodbath was felt among the broader realm of Chinese companies that provide any form of video content over the Internet, be it games, live broadcasting or even traditional moves and TV shows. Read Full Post…