I’ve been trying to ignore a noisy war of words developing between e-commerce giant Jingdong Mall and one of its key couriers, but I’m finally surrendering and writing about it because it’s a relatively slow news day and also I haven’t written for a while about China’s chaotic e-commerce space. This particular issue is part of what looks like a broader growing discord between Jingdong, which also goes by the name 360Buy, and many of the courier companies that deliver the millions of goods that consumers buy online. Such discord is just as much a sign of the chaos that now plagues China’s e-commerce space as it is of the rampant competition that has pushed most major players deeply into the red.
Journalist China
Baidu Turns Up Anti-Piarcy Tune 百度展开反盗版行动
Internet search leader Baidu (Nasdaq: BIDU) made plenty of noise last year when it announced a series of landmark licensing agreements with major Hollywood music labels, trumpeting the move as part of its drive to wean itself from the trading of pirated material on its platforms. But while it tooted its horn over the deals with Universal, Warner Music (NYSE: WMG) and Sony Music (previous post), it also quietly continued to operate its controversial music swapping platform that was the source of much of the earlier criticism. Now in an interesting move, Baidu is being much more low-keye in what looks like its attempt to quietly de-emphasize and perhaps eventually phase out the controversial music swapping service.
Sinopec’s China Gas Bid Flames Out 中石化放弃敌意收购中国燃气
One of the more entertaining and strange cases of hostile M&A by a big state-run firm has quietly flamed out, with the announcement by oil major Sinopec (HKEx: 386; Shanghai: 600028; NYSE: SNP) that it’s dropping an unsolicited bid for piped gas distributor China Gas (HKEx: 384). (company announcement; English article) I’ll admit that I’m not surprised the story has ended this way, even if I’m just a tad disappointed that we didn’t see just a few more fireworks in what was otherwise a colorful story that seemed to involve plenty of bumbling and indecision from Sinopec. I will also add that I don’t have much sympathy for the speculators who will probably lose money after buying big stakes in China Gas on the hopes that Sinopec would raise its original bid for the company made back last December.
4G: More Positive Signals 中国正在加快脚步迈向4G网络
More positive signals are emerging on China’s long march to 4G, with both the telecoms regulator and embattled networking equipment provider ZTE (HKEx: 763; Shenzhen: 000063) providing the latest signs that China could award 4G licenses much sooner than many previously thought. These new signals seem to be the latest in an accelerating trend, as China’s slow-moving telecoms regulator finally responds to pressure from industry heavyweight China Mobile (HKEx: 941; NYSE: CHL) to award 4G licenses sooner rather than later. Perhaps more importantly, the regulator could finally be realizing that its constant lateness in awarding new technology licenses is putting China’s 3 telcos at a distinct disadvantage to their global rivals, forcing the trio of China Mobile, China Unicom (HKEx: 762; NYSE: CHU) and China Telecom (HKEx: 728; NYSE: CHA) to constantly play catch-up to their more aggressive peers around the world.
IPOs: New Signs of Life in China, NY 上市：纽约、中国上市新迹象
News of 2 interesting new IPOs for Chinese companies, one in Shanghai and the other in New York, is an encouraging sign that spring may finally coming for a market still suffering through a long winter that has dragged on for more than a year. From the New York end, a social media website called YY has filed with the US securities regulator for an offering of up to $100 million, in what would become only the second major US listing for a Chinese company this year. (English article; Chinese article) Meantime, Southern Publishing has also filed with the Chinese securities regulator for an IPO, providing an interesting choice for media investors looking to tap into the company’s ties with one of China’s most ground-breaking media groups. (English article; Chinese article)
ZTE Slammed, New Oriental Exonerated 中兴通讯噩耗不断 新东方洗脱嫌疑
There’s bad news and good news coming from 2 Chinese sector leaders, with embattled telecoms equipment maker ZTE (HKEx: 763; Shenzhen: 000063) leading the downbeat headlines while education services specialist New Oriental (NYSE: EDU) brings some much needed relief to beaten-down US-listed Chinese stocks. The bad news for ZTE never seems to end, and now we’re starting to see the impact of all the negative developments on this former high-flyer which has just announced it will post a massive loss in the third quarter. Meantime, New Oriental has quietly issued its own announcement implying an investigation by the US securities regulator into some of its accounting practices has cleared it of any wrongdoing, in what would be welcome news for a sector of US-listed Chinese firms that has been dogged by an accounting credibility crisis for more than a year.
Solyndra Lawsuit: War of the Solar Dead Solyndra发难 光伏业者拼个你死我活
The fight for survival among the world’s embattled solar panel makers is starting to look more like a battle of the dead, with word that bankrupt US player Solyndra is suing 3 of its biggest Chinese rivals over allegations of running an illegal cartel. (English article) Some of you might be saying: “Wait a minute, doesn’t Solyndra have better things to do than to be filing lawsuits against rivals who are also flirting with bankruptcy?” If that’s the question, then the answer appears to be “no”. Perhaps the failed Solyndra is still seeking some final respect, and also perhaps some money through a quick settlement of this lawsuit to repay a long list of creditors that includes the US government.
Canada Delays CNOOC-Nexen Decision 加拿大推延中海油收购尼克森决议
An increasingly xenophobic West will face an important test in the next 30 days as Canada weighs whether to approve the $15 billion purchase of local oil exploration giant Nexen (Toronto: NXY) by Chinese rival CNOOC (HKEx: 883; NYSE: CEO). The deal could well become an important indicator of the West’s willingness to accept China as an equal partner in the global economy, and its approval would send a positive signal after a more controversial decision last week that saw two of China’s leading technology firms locked out of the US telecoms equipment market due to security concerns.
China’s Slow Bank Privatization Continues 中国继续缓慢推进四大行私有化
I’ve often suggested the controversial idea that Beijing should consider re-privatizing its big-four state-owned banks, as all of them still act largely like socialist-era policy lenders rather than the commercial-focused banks they were supposed to become after making IPOs starting in the mid-2000s. So it doesn’t come as much of a surprise to me to learn that the central government, which is already the dominant shareholder for each of the banks, has been quietly buying back their shares on the open market to support their stocks as they come under pressure due to a looming bad-loan crisis.
Lenovo’s PC Crown: Tough to Defend 联想个人电脑皇冠：强力捍卫
The headlines today are filled with reports trumpeting Lenovo’s official ascension to the top of the global PC rankings, as the company officially passed longtime champion Hewlett-Packard (NYSE: HPQ) to become the world leading computer seller. So now the next question is: What’s does it mean? Unfortunately, the answer could be “Not much,” as PCs get set to embark on a long-term decline that will ultimate see them go the same way as record players and VCRs as they get replaced by more nimble mobile devices. Over the shorter term, Lenovo will also have to show it has the power to stay at the top before it can claim true bragging rights as the world’s biggest PC seller — a challenge that could be tough for reasons I’ll explain shortly.
Hasbro Tests Out China Toy Box 孩之宝牵手奥飞动漫
Just a year after leading global toy maker Mattel (NYSE: MAT) decided it didn’t want to play in China, the second largest US toy company Hasbro (Nasdaq: HAS) is taking a shot at the market with a new joint venture that could stand a better chance of success. Unlike Mattel, which shuttered its flashy House of Barbie in March last year, Hasbro is taking a more behind-the-scenes approach to the market by developing toys for the China market rather than making any major retail initiatives. While there’s certainly no guarantee of success in this tough market, this kind of back-end approach seems a bit more suitable for a less-developed market like China where consumer tastes and spending patterns are a bit different from those in more mature markets like the US and Europe.
