Just a couple of weeks after telecoms heavyweight China Mobile (HKEx: 941; NYSE: CHL) complained that Internet giant Tencent (HKEx: 700) was stealing its text messaging business, we’re getting word that the 2 companies may have started talks for a revenue sharing agreement to resolve the dispute. China Mobile’s discontent involves Tencent’s popular mobile instant messaging service WeChat, better known by its Chinese name Weixin, which has soared to prominence in the last 2 years and recently passed the 300 million registered user mark. (previous post) The service allows people to send text messages back and forth over the Internet, letting them circumvent traditional text messaging that is one of the biggest revenue sources for China Mobile and the nation’s other 2 big telcos.
Journalist China
Facebook Forges Links, Sina Shuffles; Facebook未弃中国梦 新浪或将一分为二
News involving a new China tie-up by Facebook (Nasdaq: FB) will undoubtedly reignite speculation that the social networking giant could finally enter the world’s biggest Internet market in 2013, fulfilling the long-stated goal of company founder Mark Zuckerberg. Meanwhile in other Internet news, leading web portal Sina (Nasdaq: SINA) is reportedly undergoing yet another new internal shuffle, foreshadowing major changes in store for one of China’s oldest online companies in 2013.
China Internet Rule: Beijing’s Order Obsession 中国互联网新规
Everyone is giving their view on China’s new Internet rule announced late last week and what it means for both web surfers and service providers, so I too feel a need to provide my own interpretation on this latest development in the country’s wild and often unruly social media space. In a nutshell, the new rule seems designed to formally put into law many of the practices already performed by major companies and individuals, and in that sense it doesn’t represent a huge change in Beijing’s stance toward the Internet and new media in general.
ZTE Sells Assets, Huawei Courts Iran 中兴出售资产，华为讨好伊朗
After a few weeks of silence, embattled telecoms equipment makers Huawei and ZTE (HKEx: 763; Shenzhen: 000063) are back in the headlines again for the wrong reasons, with more bad news for each of these 2 companies that have lately entered an endless downward spiral. Exactly where this spiral of bad news will end is anyone’s guess, and I suspect 2013 won’t be a particularly good year for either company. But we could finally see the situations at both firms stabilize around the middle of the year, especially if either starts to gain some traction for its less controversial newer smartphone business.
Fubon Banks on Cross-Strait Thaw 富邦金控收购华一银行80%股权
The ongoing thaw in relations between China and Taiwan has helped increase trust between the former pair of Cold War adversaries, but hopes for a boom in cross-strait M&A have yet to materialize as lingering suspicions remain. That reality is on display once again this week, with the announcement by Fubon (Taipei: 2881), one of Taiwan’s leading banks, that it has reached an agreement to buy 80 percent of a mid-sized Chinese bank called First Sino Bank for about $900 million. (English article)
Solar Bits: LDK Woes, Hanwha Loan 光伏行业困境依旧
A couple of news bits from the solar sector are showing at once how companies continue to struggle with fallout from the ongoing downturn even as some larger players continue to receive lifelines from Beijing. In the former category, floundering giant LDK (NYSE: LDK) has just announced an arbitration panel’s ruling that it must pay hundreds of millions of yuan for equipment that it ordered at the height of the solar boom but which it no longer wants or needs. Meantime in the latter category, mid-sized player Hanwha SolarOne (Nasdaq: HSOL) has just received a major new credit line from a Beijing bank, becoming the latest to get state funding to continue its operations pending the roll-out of a larger industry overhaul plan.
Alibaba IPO: Waiting for a Window 阿里巴巴上市：等待时间窗口
The headlines have been flooded almost daily these last 2 weeks with the latest rumors regarding the much talked-about IPO for leading e-commerce firm Alibaba. The latest rumors from the last couple of days have cited a leaked internal company memo saying Alibaba plans to begin IPO preparations in the second half of next year, and could make a listing as soon as the end of 2013. (English article) Those rumors follows similar talk over the last week that the company is in the process of a major restructuring to organize Alibaba into 4 or 5 units around each of its key business areas. After rumors of the IPO came out, US media quoted still other sources saying that terms in the ongoing divorce between Alibaba and major stakeholder Yahoo (Nasdaq: YHOO) give Alibaba incentives to make its IPO closer to 2015. (English article)
Virtual Networks Coming in 2013 虚拟运营商或于明年进入中国电信市场
The Chinese media have been buzzing these last few days with word that the telecoms regulator will soon roll out a highly anticipated plan to allow virtual network operators (VNOs) into China in 2013, finally breaking the monopoly on telecoms services held by the nation’s 3 major telcos. Such a move could suddenly open the door for homegrown companies like Tencent (HKEx: 700) and Sina (Nasdaq: SINA) to offer specialized services over their own privately branded virtual networks, but would also open the door for bigger global names like France Telecom (Paris: FTE) and AT&T (NYSE: T) to enter the long-closed market.
Qihoo, Group Buying Set For 2013 Growth 奇虎360、团购网站明年料增长
As we approach the end of 2012, online search and group buying look like 2 spaces on China’s Internet that could see some big changes in the year ahead and provide some interesting investment opportunities. In the online search space, the new year could well shape up as the one when dominant search engine Baidu (Nasdaq: BIDU) finally received some serious competition from Qihoo 360 (NYSE: QIHU), which is quickly adding important features to its up-and-coming search service launched over the summer. Meantime, the new year could also see the revival of some of the nation’s beleaguered group buying sites, which have spent the past year in a bloody retrenchment that has seen many players either close or merge with rivals. In that space, we’re getting word that 55tuan, one of the former top players, has finally managed to turn a profit after altering its business model.
Renren Buy-Back: Does Anyone Care? 人人回购股票：有人关心吗？
Beleaguered social networking site (SNS) Renren (NYSE: RENN) is resorting to the feeble tactic of buying back its shares to boost its anemic stock, even as it faces little or no prospect of major new growth in the current chilly advertising climate. What the company really needs right now is a major jolt to excite investors, perhaps through a privatization or a mega-merger with leading rival Kaixin. Both of those could be possibilities in the new year, with the merger option as the most exciting that could breathe new life into a company that was once considered the Facebook (Nasdaq: FB) of China.
ICBC Dips Toe in Brazil 工行巴西分行获准成立
After years of focusing on the domestic market, leading Chinese bank ICBC (HKEx: 1398; Shanghai: 601398) is suddenly embarking on a rapid global expansion, this time with the announcement that it has received the necessary approvals to open a Brazilian unit. This latest move would follow a rapid series of new initiatives over the last 2 years, including new entries into South America, the Middle East and US.
