New music and video moves by Baidu (Nasdaq: BIDU) and Qihoo 360 (NYSE: QIHU) reflect the intensifying competition between China’s dominant search engine and a fast-rising challenger, providing an interesting new form of entertainment for industry watchers. Media are reporting that Baidu has just acquired a video search and recommendation website called Jinwankansha, whose Chinese name means “What Are You Watching Tonight?” If true, the acquisition would be one of a series of recent signals that indicate Baidu is preparing to make a serious play for the online video market, potentially challenging more established players like Youku Tudou (NYSE: YOKU) and Sohu (Nasdaq: SOHU). Meantime, Qihoo 360 has also formally launched its own music service tied to its fast-rising search business, in what looks like a direct shot at rival services operated by Baidu.
Journalist China
Youku Tudou Off To Bumpy Start 优酷土豆合并后艰难开始
Leading video sharing site Youku Tudou (NYSE: YOKU) has just released its first earnings report since its formation through the merger of the nation’s top 2 players, and the results aren’t impressing anyone too much. The numbers themselves are a bit messy, which is often the case with a newly merged company where accounting differences need to be resolved and year-ago comparisons are difficult. (results announcement) But what these results seem to show is that Youku may have overpaid significantly for Tudou. What’s more, the results also show that Youku Tudou remains highly dependent on advertising for the big bulk of its revenue, a bad sign as China’s ad market shows signs of significant slowing.
Vancl, Cloudary Take New IPO Steps 凡客与盛大文学或於明年在美上市
New signs are emerging that many Chinese firms waiting to make offshore IPOs won’t be able to take advantage of a sudden window of positive sentiment that has suddenly appeared, and instead will have to target the late first quarter or second quarter of 2013. This sudden window of opportunity has caught nearly everyone by surprise, and few if any companies have completed the necessary preparations needed to make offerings before mid-December. The period from Christmas to Chinese New Year is typically dormant for new offerings due to all the holidays, meaning most new offerings will have to wait until March to try their luck if investor sentiment remains positive for that long.
Yingli Order: Sunnier Days Ahead? 英利获大单意味未来光明？
Struggling solar panel maker Yingli (NYSE: YGE) is trying the good news-bad news approach to distract investors from its latest downbeat earnings, announcing its biggest-ever new order on the same day it released its dismal third-quarter results. Based on shareholder reaction, the approach has been quite successful, with Yingli’s stock surging more than 13 percent in Wednesday trade after both announcements came out. Investors seem to clearly be focused on the big new order, and are hoping that Yingli may actually be able to manufacture profitably by the time it delivers the solar cells to this major new customer.
Rebound Nears For US China Stocks 中概股即将反弹
After a prolonged winter, spring finally appears to be in sight for overseas-listed Chinese companies amid growing investor confidence that accounting issues that have dogged the sector for much of the last 2 years are finally in the past. The latest signs of spring are coming from telecoms software maker AsiaInfo-Linkage (Nasdaq: ASIA), which may be on the cusp of a buy-out at a nice premium; and word that infamous short seller Muddy Waters may finally be ready to cease its relentless attacks on US-listed China companies.
Unicom, China Telecom in iPhone Race 联通与电信争夺大陆iPhone 5首发
More than 2 months after Apple (Nasdaq: AAPL) launched its latest iPhone, China Unicom (HKEx: 762; NYSE: CHU) and China Telecom (HKEx: 728; NYSE: CHA) are locked in a race to see who can offer the product first in China, in what looks more like a sad comedy of ineptitude than anything else. I usually save most of my criticism in the telecoms space for Unicom, the nation’s second largest mobile carrier that has spent most of the last 2 years more focused on a series of non-stop management reshuffles rather than any attempts to do real business. But this time I also have to save some criticism for China Telecom, China’s smallest mobile carrier, which also has looked equally inept in this latest iPhone launch.
China, US Shuffle Security Card 中美互打安全牌
New noises are coming from both China and the US on the dangers to national security posed by commercial activities in the high-tech space, as fallout continues to linger from the recent Washington decision to ban Huawei and ZTE (HKEx: 763; Shenzhen: 000063) from selling their equipment in the US. Some might say this new flare up in trade relations is just an extension of other recent similar tensions between Washington and Beijing, whose complaints of unfair trade against each other have accelerated over the last year. But this latest trade war looks a bit more worrisome, since it’s leveled at the high-tech sector whose products are considerably more valuable than the usual lower tech products usually involved in many of these disputes.
SAP Eyes Dormant Int’l Board 思爱普欲登陆中国国际版
I was amused to read a new report saying that German business software giant SAP (Frankfurt: SAP) may list its shares on China’s planned International Board in Shanghai, since it’s been quite a while since I’ve read any reports like this, which were still quite common as recently as 2010. If I were an optimist, I would say these new reports might indicate a launch is coming in the first half of next year for the long-planned International Board, which would allow offshore companies to raise funds through IPOs in China. But instead, these latest reports, which appear to have originated offshore, are probably just a public relations exercise by SAP, which probably just wants to remind everyone of its commitment to China.
Dongfeng Revs Up Renault JV Talks 东风汽车加紧与雷诺汽车联手
Long-running talks about a new joint venture between domestic automaker Dongfeng Motor (HKEx 489) and France’s Renault (Paris: RENA) appear to be gaining new momentum, driven by urgency for the former to diversify following the recent territorial dispute between China and Japan. Regardless of what’s driving this new development, it does seem to mark an important move for Dongfeng, a top Chinese automaker that is going through a painful period right now due to its big dependence on joint ventures with Honda (Tokyo: 7267) and Nissan (Tokyo: 7201). Those automakers have all seen their sales plunge over the last 3 months as Chinese consumers boycotted the brands at the height of the territorial dispute between China and Japan. In related news, it does look like the peak of the boycott has finally passed, with new reports indicating that sales for the big Japanese brands are starting to pick up again after bottoming out in late October.
China Powers Ming Yang in India 中国明阳风能印度动向
With its new energy sector tottering on the brink of collapse, China no longer seems to care if foreign government accuse it of unfairly supporting its sector with low cost loans and other state subsidies. That at least appears to be the message from a new plan by Ming Yang Wind Power (NYSE: MY), which has just announced a massive new tie-up with policy lender China Development Bank to provide financing for wind power projects in India. (company announcement)
China Eastern: Beijing’s Latest Policy Tool 中国东方航空：中国政府的最新政治工具
China Eastern’s (HKEx: 670; Shanghai: 600115; NYSE: CEA) announcement of a massive new order for Airbus (Paris: EAD) planes last week looked suspiciously political, coming just after China and the EU resolved an aviation-related dispute. If politics were indeed a factor, which seems likely, Beijing set another unhelpful precedent by tying what should have been a purely commercial decision to non-commercial factors. By continuing to act this way, Beijing will show the world that it calls the shots for what should otherwise be big commercial decisions by Chinese companies rather than leaving those decisions to market forces. That will only give China’s opponents further fuel in their steady accusations of unfair trade by Beijing.
