The long awaited clean-up of China’s cluttered group buying sector appears to be accelerating, with new reports that a potential cash-rich consolidator has emerged in the form of GroupNet, which is itself the product of the merger earlier this year between former mid-sized players FTuan and Gaopeng. The new reports say that GroupNet has raised $40 million in new funds, which it will use to acquire other companies in the money-losing space where many players are now on life-support after burning through hundreds of millions of dollars in investor dollars over the last 2 years. (English article)
Journalist China
Xunlei: Preparing For New IPO Try? 迅雷：准备尝试新的上市？
The year 2012 will easily go down as the worst for New York IPOs by Chinese firms since the global financial crisis, though there’s still some hope we could see one or 2 offerings in the next couple of months by cash-starved Chinese firms. A social media website named YY surprised many when it made a preliminary New York IPO filing earlier this month (previous post), and now video and music sharing site Xunlei is also emitting signals that indicate a filing could be near for its own stalled public offering.
Telecoms: 4G and IPTV in, Cisco Out 中国电信行业：4G与IPTV推进 思科受阻
The headlines are buzzing with news bits from each of the country’s 3 major telcos, with high-speed services taking big steps forward even as US telecoms equipment powerhouse Cisco (Nasdaq: CSCO) could be bracing for a Chinese winter. In the former group of headlines, media are reporting that China Mobile (HKEx: 941; NYSE: CHL) has made a significant step into 4G with plans to expand its trial TD-LTE network into China’s interior, while China Telecom (HKEx: 728; NYSE CHA) has just won an important new license to offer TV and other video and data services over its fixed-line broadband network. Meantime, China Unicom (HKEx: 762; NYSE: CHU) is also making headlines with reports that the company is replacing Cisco-supplied equipment from some of its key network due to security concerns.
CITIC Securities Solidifies Global Push 中信证券巩固全球化战略
China’s biggest brokerage CITIC Securities (HKEx: 6030; Shanghai: 600030) could be a company to watch over the next 2-3 years as it attempts to become the country’s first truly global player using its newly acquired CLSA unit as a stepping stone. If I were making bets, I would say the company has the resources it needs to become one of the top second-tier global players in the next 4 or 5 years, competing successfully with the likes of names like Japan’s Nomura and Britain’s Barclays Capital. If it can do that, I would even give the company a chance of eventually entering the echelons of a global elite that includes names like Morgan Stanley (NYSE: MS) and Goldman Sachs (NYSE: GS), though that will take at least a decade or possibly longer.
Smartphones: ZTE Sputters, Lenovo Looks Out 智能手机：中兴缩减，联想进军海外
When ZTE (HKEx: 763; Shenzhen: 000063) warned 2 weeks ago that it would post a massive third-quarter loss, everyone assumed that its smartphone business was partly to blame as the company sacrificed margins in exchange for fast growth. Now it seems that even its smartphone plans were overly ambitious, with ZTE’s newly released official results showing it is likely to miss its smartphone target for the year by a big gap. Meantime, Lenovo (HKEx: 992), still basking in the glory of recently becoming the world’s biggest PC seller, is also making its own smartphone moves with news that it will start to sell its models outside China. I’ll admit I have my doubts about this new smartphone push by Lenovo, as the company has enjoyed far less success with this product in its home China market than with its core PC business.
Geely’s UK Investment Fails, Volvo Next? 吉利持股的英国锰铜申请破产保护 沃尔沃或遭遇相同命运
A week after I commended home appliance maker Haier (HKEx: 1169) for a job well done with its recent purchase of a New Zealand company, I’m sorry to say I can’t give the same positive assessment for more problematic overseas investments by the parent of Hong Kong-listed Geely (HKEx: 175). The latest news has seen one of Geely’s biggest overseas investments, UK taxi maker Manganese Bronze, file for bankruptcy, even as Geely’s bigger Volvo car unit appears to be heading down a similar road.
iPad Mini: Another China Snub; iPad Mini首发再次不含中国大陆
I’m probably beginning to sound a bit redundant by writing about Apple’s (Nasdaq: APPL) latest China snub, but it does seem worth noting that yet another major new product from the world’s biggest tech company won’t be coming to Chinese consumers anytime soon. Meantime, Chinese media are noting that Microsoft (Nasdaq: MSFT) is seeking to exploit this latest Apple snub by selecting China as one of the launch markets for its new tablet PC. Unfortunately for Microsoft, I don’t think Chinese consumers will really care very much.
CNOOC-Nexen: Waiting for Signs From Beijing 中海油收购尼克森：等待中国政府的信号
Oil major CNOOC (HKEx: 883; NYSE: CEO) has just released its latest quarter results that look generally upbeat, but media have predictably focused instead on the company’s pending $15 billion bid for Nexen (Toronto: NXY) which is still awaiting approval by the Canadian government. Since everyone else is guessing on whether Ottawa will ultimately approve this deal, I’ll go ahead and add my name to the list and predict the deal will get approved when Canada announces its decision next month. But there’s one caveat to my prediction, namely that Beijing will need to give some kind of signal — the more openly, the better — that it is willing to give Canadian companies similar access to the Chinese market where state-run firms currently dominate the resources sector.
HNA Spreads Wings to France 海航收购法国蓝鹰航空48%股权
Shi, Beijing Battle for Heart of Suntech 尚德电力为获政府救援或失去施正荣
Solar panel maker LDK (NYSE: LDK) started its long march to a takeover by the state with a major stake sale this week, but the equally cash-starved Suntech (NYSE: STP) looks like it may put up a bigger fight to maintain its independence. What’s happening at Suntech comes down to a single word: Pride. The latest twist at Suntech also has broader implications, as the kind of pride we’re seeing from founder Shi Zhengrong could foreshadow similar resistance we’re likely to see at many of the nation’s other solar panel makers.
Suning Links With Vancl, 24Quan Shutters 苏宁易购联手凡客诚品 24券暂时停业
New signs of consolidation are appearing in the overheated in e-commerce and group buying spaces, with Suning.com (Shenzhen: 002024) again emerging as a potential major consolidator in e-commerce as a mid-sized group buying site named 24Quan closes up shop. The e-commerce news is easily the more interesting of these 2 bits, as China’s group buying sector has largely run out of cash by now and most players are tottering on the brink of insolvency. By comparison, the e-commerce field is backed by a big number of cash-rich companies like Suning, Alibaba and Amazon (Nasdaq: AMZN), which have indicated they are prepared to lose big money for a long time to defend and build their positions in a country likely to become the world’s biggest e-commerce market in the next 5-10 years.
