Multinationals

INTERNET: Google Seeks Partner for China Return

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Bottom line: Google will get permission from Beijing to open a Chinese version of its app Play Store later this year, most likely through a joint venture with NetEase or Tencent.

Google, NetEase talk China Play Store JV

The glacial return to China for Internet titan Google (Nasdaq: GOOG) is making its debut in the 2017 headlines, with word that the company is in talks to open a Chinese version of its app store with online game giant NetEase (Nasdaq: NTES). That tidbit nicely sets the stage for what’s likely to be a banner year for Google and possibly US Internet rival Facebook (Nasdaq: FB) in their race to see who can be first to plant a tent pole in China. Read Full Post…

RETAIL: Yum China Looks Flat in Maiden Report

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Bottom line: Yum China’s maiden quarterly report and $300 million share buyback program highlight a company that needs to move more aggressively and take more risks to regain its footing after being spun off from its US parent.

Yum China posts unimpressive maiden quarterly report
Yum China posts unimpressive maiden quarterly report

Fast food operator Yum China (NYSE: YUM) has just put out its maiden quarterly earnings report that looks decidedly ho-hum, including a somewhat surprising announcement of a $300 million share repurchase program. The operator of KFC and Pizza Hut stores in China was formally split off from its parent, Yum Brands (NYSE: YUM), late last year, following shareholder pressure to let the unit operate more independently in the somewhat unique and fast-changing Chinese market. Read Full Post…

E-COMMERCE: Alibaba Gets Alter Ego with Yahoo-Turned-Altaba

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Bottom line: Alibaba will closely watch the performance of the newly minted Altaba over the next 1-2 years, and could make a privatization bid with Softbank if it feels the company is undermining its own stock.

Yahoo to morph into Altaba

Yahoo (Nasdaq: YHOO) co-founder Jerry Yang never would have dreamed a decade ago that the ground-breaking search engine he co-founded might someday morph into a Chinese e-commerce company called Alibaba (NYSE: BABA). But that’s pretty much what has just happened, with official word from Yang’s former baby that it will change its name to Altaba following the pending sale of its core Internet business. Read Full Post…

INTERNET: Tencent in High-Powered Mapping Investment with Europe’s Here

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Bottom line: Tencent’s new investment in Nokia’s former mapping unit Here reflects the Chinese herd mentality to pile into new technologies, but also looks like a relatively savvy way to enter the space by pairing with experienced partners.

Tencent ties with mapping giant Here

Internet giant Tencent (HKEx: 700) doesn’t want to be left behind in the race with rivals Baidu (Nasdaq: BIDU) and Alibaba (NYSE: BABA) into self-driving new energy cars that may someday dominate the streets of both China and the world. That appears to be the message from the latest headlines, which have Tencent involved in a somewhat complicated deal that will give it a small stake in a high-powered mapping company that counts car giants BMW, Daimler and Audi as its main investors. Read Full Post…

CONSUMER: Bright Food Gets Indigestion from Weetabix

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Bottom line: Bright’s plan to sell Weetabix 4 years after the purchase is mostly due to declining performance at the British cereal maker, with similar sales likely to follow for other poorly planned food purchases by Chinese buyers.

Bright loses appetite for Weetabix

After splashing into the global M&A headlines 4 years ago with its purchase of a well-known British breakfast cereal maker, Shanghai’s Bright Food has decided that Weetabix apparently isn’t its cup of tea. That seems to be the message in the latest headlines, which say that Bright is looking to sell the British company for quite a discount to the price it paid at the time of the ground-breaking deal in 2012.

Of course much has happened since Bright, known in Shanghai for its biscuits and dairy products, first announced the deal. Bright brought Weetabix’s core breakfast cereal products to China not long after the deal was closed, and even talked about making a separate listing for the British company. Read Full Post…

SMARTPHONES: Two Losers Unite in BlackBerry, TCL Alliance

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Bottom line: TCL’s new licensing deal with BlackBerry will end up as a quiet failure due to TCL’s weak R&D skills and lack of consumer appeal to the BlackBerry name.  

TCL, BlackBerry in licensing tie-up

When does adding two negatives yield a positive? The answer is “never”, but dying smartphone makers BlackBerry (Toronto: BB) and TCL (Shenzhen: 000100) are hoping that maybe this time will be different. Of course, it’s easy for me to predict disaster for this particular new alliance, and I’d be much bolder if I said this partnership might revive the two dying companies. But the truth is that neither BlackBerry’s nor TCL’s smartphone business have much going for them these days. Read Full Post…

INTERNET: Google Sort of Back in China with Developer Page

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Bottom line: Google’s new launch of a China-based developers site marks a partial return to the Chinese web, but its higher-profile return to the consumer market with a Chinese Google Play app store probably won’t come until next year.

Google launches China developer site

After more than a year of speculation, global search leader Google (Nasdaq: GOOG) is finally back in China. Or at least sort of. The tech world is certainly buzzing about this latest development, which comes with Google’s launch of a China page for locally-based developers. For anyone who wants to look, the page itself is at developers.google.cn, and is all in English. But proving its China credentials, the page also has a QR code that lets users follow Google Developers on WeChat. Read Full Post…

FINANCE: WeChat Sips with Starbucks; Alipay in Europe, Australia

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Bottom line: Starbucks’ selection of WeChat before Alipay for in-store electronic payments is a symbolic victory for the former, while Alipay’s aggressive global expansion could eventually help it to overtake UnionPay outside China.

WeChat ties with Starbucks

China’s two leading mobile payments services are both in the headlines, led by word of a major new tie-up between Tencent’s (HKEx: 700) WeChat and coffee lifestyle titan Starbucks (NYSE: SBUX). I have to admit that my interest in this particular tie-up is somewhat personal, as I’m a big fan of both of these companies and have been waiting a long time for such a partnership.

But equally significant is the fact that Starbucks chose WeChat before archrival Alipay. That same Alipay is in a couple of its own headlines, both showing how it’s trying to expand abroad to compete with China’s other major electronic payments system, the state-owned UnionPay. One of those headlines has Alipay in a new tie-up in Australia, while the other has it announcing partnerships with four major financial companies to expand its footprint in Europe. Read Full Post…

M&A: China-US Deals Stall as Trump Presidency Nears

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Bottom line: A Chinese bid for the Chicago Stock Exchange could get vetoed on concerns about exposure to the US financial system, while a similar bid for chip maker Lattice could get approved due to its relatively small size.

Lattice buyer has Beijing backing

Two cross-border deals involving China M&A in the US appear to be stalling, even before the protectionist-minded Donald Trump becomes the next US president. That certainly doesn’t bode well for either deal, one in the high-tech chip space and the other in the financial sector, since both could easily have Chinese government backing. One of those has a Sichuan-based investor group trying to buy the tiny Chicago Stock Exchange, while the other has a different group trying to buy mid-sized chip design house Lattice Semiconductor (Nasdaq: LSCC). Read Full Post…

SMARTPHONES: Apple Weighing iPhone Move Back to US?

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Bottom line: Apple’s reported decision to study moving some iPhone production to the US could have been a form of contingency planning, but is unlikely to happen unless a major trade war breaks out between the US and China.

Apple reportedly eyes US iPhone production

The headlines have been buzzing these past few days over reports that global tech giant Apple (Nasdaq: AAPL) might be considering moving some of its iPhone production from China to the US. The original report comes from a respectable Japanese publication, and at least on the surface seems somewhat logical in light of Donald Trump’s surprise win in the US presidential election.

After all, Trump, among other things, has been quite vocal on getting companies like Apple to manufacture in the US. He’s also promised to slap a generic 45 percent tariff on goods made in China. Never mind that goods imported from China and elsewhere fall under a wide range of categories, each subject to different tariff rates. Trump is known for throwing out random thoughts, even when they’re far from practical or connected with reality. Read Full Post…

E-COMMERCE: Walmart Steps Up China Grocery Drive with New Investment

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Bottom line: Walmart’s investment in an online grocery delivery company is the latest advance in its rapidly growing alliance with JD.com, which could help to reignite its stagnating position in China’s retail market.

Walmart invests in New Dada

The growing alliance between global retailing titan Walmart (NYSE: WMT) and Chinese e-commerce giant JD.com (Nasdaq: JD) is taking yet another step forward, with word that the former is making another new investment in the latter in the hotly contested online grocery space. In this case the investment itself, in a JD-backed online grocery specialist called New Dada, is a relatively modest $50 million. Instead, the investment is more symbolic because it takes direct aim at the market-leading position of e-commerce titan Alibaba (NYSE: BABA). Read Full Post…