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Journalist China
Business news from China By Doug Young.
Doug Young, journalist, has lived and worked in China for 20 years, much of that as a journalist, writing about publicly listed Chinese companies.
He is based in Shanghai where, in addition to his role as editor of Young’s China Business Blog, he teaches financial journalism at Fudan University, one of China’s top journalism programs.
He contributes regularly to a wide range of publications in both China and the west, including Forbes, CNN, Seeking Alpha and Reuters, as well as Asia-based publications including the South China Morning Post, Global Times, Shanghai Daily and Shanghai Observer
Ex Cloudary exec detained on suspicion of espionage
An escalating clash between 2 of China’s top Internet names has taken an interesting twist, with word that a former Shanda executive has been detained just before the formal launch of his new online literature company backed by sector giant Tencent (HKEx: 700). Broadly speaking, I’m somewhat encouraged by this latest development, which shows that China may finally be preparing to crack down on perpetrators of economic crimes who in the past often faced little or no serious punishment for their offenses. At the same time, I do worry that this latest detention may have less to do with the law, and more to do with politics and guanxi. Read Full Post…
China’s Shuanghui sets the table for Smithfield buy
China’s appetite for foreign food M&A is gaining momentum with news that meat processor ShuanghuiInternational has offered to buy US pork products maker Smithfield Foods (NYSE: SFD) for $4.7 billion. The deal would be the biggest purchase ever of a foreign food maker by a Chinese firm, following a recent spate of smaller but still major deals by names like Bright Food (Shanghai: 600597). But the deal drew controversy almost as soon as it was announced, with at least one US politician and an industry group voicing their concerns about the transaction. Read Full Post…
The inevitable has happened as soaring discount online retailer Vipshop (NYSE: VIPS) finally became too irresistible a target for short sellers, who sensed the company’s stock had become a little too overinflated. This kind of attack doesn’t surprise me at all since Vipshop shares have risen more than 7-fold over the last 8 months. I’m not a big fan of short sellers in general, but I might even have to commend the attacker in this case for spotting an easy target and most likely making some big money with relatively minimal effort. Read Full Post…
Today I want to take a look at the latest developments from 2 companies that have both tried to play in the US stock markets, but ultimately found out that international investors can be a fickle group. In both cases, outdoor advertising specialist Focus Media and group buying specialist LaShou discovered that foreign equity markets can be quite lucrative and prestigious, especially for up-and-coming Chinese firms that can make successful IPOs. But both firms have also discovered those same markets can also be brutal places for Chinese companies that aren’t used to dealing with sophisticated institutional investors, hedge funds and short sellers that are active in those markets.
An interesting low-key filing by Telefonica (Madrid: TELF) is leading me to wonder if the debt-laden Spanish telco may be preparing to sell its remaining 5 percent stake in its laggard Chinese peer China Unicom (HKEx: 762; NYSE: CHU). I said last year that such a sell-down wouldn’t surprise me at all, after Telefonica sold about half of its 10 percent in Unicom last June, bringing its holdings to their current levels. Read Full Post…
Some 6 months after buzz first emerged that Amazon (Nasdaq: AMZN) could soon bring its popular Kindle tablet PCs to China, media are reporting that the product could finally make its debut in the market next month. I’ll be frank in saying that Amazon is coming to the China tablet PC market a bit late, as the space is already quite competitive due to the earlier arrival of Apple’s (Nasdaq: AAPL) iPad, along with tablet offerings from Samsung (Seoul: 005930) and homegrown giant Lenovo (HKEx: 992). But that said, I would also say there’s still no clear leader in the space, meaning Amazon could quickly grab some market share if it makes the right moves. Read Full Post…
Say the word “logistics” in any conversation and you’ll almost inevitably put anyone listening to sleep. But the concept is hardly a boring one in China’s hyper-competitive e-commerce space, where industry leader Alibaba has just announced a massive 100 billion yuan ($16.3 billion) plan to build up its logistics network over the next few years. To me this plan looks like a direct response to similar recent moves by e-commerce names like Jingdong, Tencent (HKEx: 700) and Amazon (Nasdaq: AMZN), which are aggressively building logistics networks with an aim of reducing delivery times to 2 hours or less. But the situation for Alibaba is far more complex due to its different business model, leading me to suspect this plan will run into problems as it’s rolled out. Read Full Post…
A global buying spree by cash-rich Chinese investors has taken a turn onto the tourist map, with word that Fosun International (HKEx: 656) is taking part in a bid to purchase France’s Club Med (Paris: CU), a pioneer in the upscale resort business. I particularly like this deal, as Fosun can actually provide something more than just cash to Club Med, as the European company gets set to embark on an aggressive expansion to bring its brand of exclusive resorts to China. Read Full Post…
After repeatedly criticizing China’s anti-monopoly regulator for its slowness in approving global M&A, I finally have to congratulate the Chinese Commerce Ministry for improving its record with the relatively fast approval of a major deal. In this case, the ministry has given its official approval just over 3 months after Warren Buffett’s Berkshire Hathaway announced it would partner with private equity firm 3G Capital to buy US ketchup giant H.J. Heinz (NYSE: HNZ) for $28 billion. Read Full Post…
It’s been interesting to watch all the different interpretations coming out of a brief flurry of talks in Europe late last week aimed at settling a trade dispute between the EU and China over Beijing’s support for its solar panel makers. About the only thing that everyone agrees on is that some talks did happen, and that China took the interesting step of letting an industry association rather than government officials handle its side of the negotiations. Read Full Post…
Nearly two years after US securities regulators first held breakthrough meetings with their Chinese counterparts, the two sides have reached an agreement that marks a big step forward in making cross-border stock listings more transparent. The agreement will pressure overseas-listed Chinese firms and their independent auditors to become more accountable to both regulators and shareholders, helping to restore confidence to battered shares of these companies. Read Full Post…
