The headlines have been buzzing this week with word that Baidu (Nasdaq: BIDU) could soon form a tie-up with software maker Kingsoft (HKEx: 3888), with many speculating the move by China’s leading search engine would be a direct assault on recent Baidu nemesis Qihoo 360 (NYSE: QIHU). But a far more interesting possibility in this potential new tie-up would be a future related deal that would bring together Baidu with the up-and-coming young smartphone maker Xiaomi, whose co-founder Lei Jun has strong ties with Kingsoft.
Journalist China
Solar Shares Shine, JA Shuffles 光伏企业股价回光返照 行业尚待重组
After more than a year of coming under constant assault, shares of solar panel makers have suddenly received an unexpected boost from investors who are suddenly showing renewed interest in the battered sector. Many are attributing the sudden surge in solar stocks to growing signs that China will soon embark on a massive building spree of new solar power plants, which should theoretically provide a major new business opportunity for solar panel makers who have been posting massive losses for more than a year now.
Baidu’s Li Puts Personal Bets on Mobile 李彦宏亲自挂帅百度移动部门
Less than 2 months after Baidu’s (Nasdaq: BIDU) founder Robin Li called on his employees to rekindle their “wolf spirit” that made his company great, media are reporting that Li has personally stepped in to take charge of Baidu’s mobile division in a bid to reverse its sinking fortunes. Baidu was once the envy of China’s Internet world, defeating global giant Google (Nasdaq: GOOG) to take the crown as the dominant player in China’s online search market. While it still controls the big majority of China’s online search market, many observers believe the company has become complacent in the last year due to its near-monopoly status in the market.
Citic Telecom Enters VNO Race 中信国际电讯加入虚拟运营商牌照争夺战
As China prepares to open its telecoms market to virtual network operators (VNOs) later this year, investors will inevitably be following the market closely to try to figure out who might become the first firms to enter the lucrative area. Many have speculated that Internet titan Tencent (HKEx: 700) could be one of the first 6 companies to enter the arena (previous post), and now the telecoms arm of investment giant Citic Group also looks like it may be jockeying for a position to enter the field with its purchase of a Macau wireless carrier.
Tencent-China Mobile: Virtual Network Buddies? 腾讯有望成虚拟运营商 与中移动合作
A rapidly evolving pilot program that should see at least 6 virtual network operators (VNOs) enter China’s telecoms space this year has everyone chattering about who the first operators might be, with Internet leader Tencent (HKEx: 700) mentioned as one of the most likely candidates. Tencent hasn’t really commented on its intent, though it’s certainly an intriguing possibility, especially against the backdrop of the company’s recent high-profile spat with leading mobile carrier China Mobile (HKEx: 941; NYSE: CHL). I’ll take a look more closely at this element shortly, but first let’s take a step back and check out the latest big-picture news involving the biggest opening in years for China’s sensitive telecoms sector.
Group Buy Site 24Quan Quits 团购网站24券关门
After taking a temporary “excursion” offline due to a dispute with its investors in October, mid-sized group buying site 24Quan has decided to make the trip permanent by closing down, in the latest wrinkle of a painful restructuring in the overcrowded space. This latest development shouldn’t come as a surprise to anyone, following the site’s suspension of service 3 months ago despite its promises to reopen once it resolved its problems. (previous post) Now it seems the company’s managers couldn’t resolve those differences with investors, prompting 24Quan’s CEO to confirm that his company has officially closed its doors permanently.
Alibaba Reorganizes, Jingdong Delays IPO 阿里巴巴重组，京东推迟上市
E-commerce leader Alibaba is quickly discovering that being big has its benefits, but it also comes with many challenges — a fact that’s reflected in a recent series of major reorganizations aimed at making the company more efficient. Meantime, Alibaba’s top rival Jingdong Mall is also grappling with its own issues, most notably its inability to earn a profit, which may be the reason behind its latest proclamation that it won’t make an initial public offering until 2015 at the earliest. Alibaba’s latest major restructure and Jingdong’s delay of its IPO plans are largely unrelated; but both developments do reflect the fact that each company has become quite large and diverse and needs some organizational makeover to maximize its appeal to investors before planned IPOs.
HSBC’s Ping An Stake Sale Unravels 汇丰出售平安股份受挫
The slow-motion collapse this week of HSBC’s (HKEx: 5; London: HSBA) plans to sell its stake in Ping An Insurance (HKEx: 2318; Shanghai: 601318) is shining a harsh spotlight on the big role that politics can play in deals involving major Chinese companies. The case is particularly interesting because it also shows how this kind of Chinese politics can quickly cost investors billions of dollars, since Ping An’s shares have dropped sharply as it looks increasingly likely the deal will collapse. Ping An’s Hong Kong-listed shares lost more than 6 percent of their value early this week after news of the deal’s potential collapse first emerged, though they’ve regained some of the ground since then.
Smartphones: Xiaomi Sales, ZTE Tie-Up 小米迅速成长 中兴另辟蹊径
A couple of news bits from the smartphone space are shining a spotlight on 2 very different stories in the sector, with up-and-comer Xiaomi’s young but rapid growth moving ahead, while a struggling much larger ZTE (HKEx: 763) is trying a new approach to win more overseas business. The only common theme to these 2 different stories is the lightning pace of change that has developed in the dynamic smartphone space, where a manufacturer can now go from startup to superstar to laggard status in very short time.
News Digest: January 10 报摘：2013年1月10日
The following press releases and media reports about Chinese companies were carried on January 10. To view a full article or story, click on the link next to the headline.
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- Liu Qiangdong: Jingdong Mall Won’t Make IPO Before 2015 (Chinese article)
- China’s Insurance Regulator To Reject $9.4 Bln HSBC (HKEx: 5) Deal: Reports (English article)
- Xiaomi Sells 7 Mln Smartphones in 2012 (English article)
- ZTE (HKEx: 763), Telstra Launch Easy UI Customization for Global Operators (Businesswire)
- Apple (Nasdaq: AAPL) CEO Cook Visits China Unicom (HKEx: 762) This Morning (Chinese article)
Dangdang, Vancl in Overhauls 当当网转型 凡客诚品瘦身
Media are reporting that online retailers Dangdang (NYSE: DANG) is launching a major overhaul and Vancl is facing issues from its own big retrenchment, as each searches for elusive profits that have become increasingly hard to find in the current cutthroat e-commerce space. In Dangdang’s case, the company is attempting to focus on several key product groups, giving up its previous aim of becoming a general merchandise giant like Amazon (Nasdaq: AMZN). Meantime, online clothing retailer Vancl’s own ongoing slimming exercise has left it so lean that it is reportedly running into logistical problems that are resulting in delayed shipments to some of its customers. All of this reflects just how difficult China’s e-commerce environment has become, with most companies resorting to desperate measures in their bids to conserve cash and become profitable in the ultra-competitive space.
