As yet another deadline approaches for Sinopec’s (HKEx: 386; Shanghai: 600028; NYSE: SNP) strange hostile takeover bid for natural gas distributor China Gas (HKEx: 384), I’m going to make a prediction that may look bold but also seems increasingly obvious, namely that greed and indecision will ultimately kill this controversial deal. The unsolicited offer by Sinopec and partner ENN Energy (HKEx: 2688) for China Gas will officially expire on Tuesday, though it’s quite possible we might see the pair extend the deadline yet again, following several previous extensions. (English article) But based on the clumsy way Sinopec has handled the deal so far, I see no indication that it’s prepared to raise its offer.
Journalist China
Xiaomi: China’s New Apple? 小米：下一个中国的苹果公司？
The sales and marketing people at smartphone wannabes like ZTE (HKEx: 763; Shenzhen: 000063), Huawei and Lenovo (HKEx: 992) are probably green with envy over the surge in publicity surrounding the upcoming launch of the newest low-cost smartphone by up-and-comer Xiaomi. I’m not usually someone who gets too excited by new product launches, but I have to admit that even I am increasingly intrigued not only by this new phone, Xiaomi’s second following the launch of its first model last fall, but also by Xiaomi itself. The hype looks very similar to the kind of excitement that companies love but often have difficulty generating for their new product launches, with Apple (Nasdaq: AAPL) as one of the few companies that can successfully generate such buzz.
Tudou, Youku Merger Moves Ahead as Growth Slows 随着增长放缓，优酷、土豆合并有进展
China Resource M&A Set to Slow 中国海外资源并购或将放慢脚步
I previously predicted that 2012 could be a landmark year for Chinese firms to buy global energy and resource assets (previous post), and now the latest signs indicate the buying binge could quickly fizzle in 2013. The reason is simple: After ordering big state-run energy and mining companies to buy global assets to feed China’s expanding economy, Beijing is quickly realizing that rapidly falling prices for commodities like coal, oil and iron ore could render many of those overseas purchases as uneconomical in the very near future.
Solar Trade Wars: Showdown Coming? 中西方太阳能贸易战离摊牌已不远？
A new flurry of noise indicates a showdown may be imminent in the ongoing solar trade wars between Beijing and the west, reflecting the very real possibility that many of China’s top players may be on the brink of bankruptcy due to a prolonged downturn for their sector. The sudden flurry of new noises comes as yet another top manufacturer, Yingli Green Energy (NYSE: YGE), has just pre-announced second-quarter results that show the industry’s long-anticipated recovery may be weaker than expected. (company announcement)
Lenovo Waltzes With EMC, Eyes Nokia 联想“牵手”EMC
There are a couple of interesting news bits today on PC giant Lenovo (HKEx: 992), including a smart-looking new tie-up with data storage giant EMC (NYSE: EMC), and rumors that the company is weighing a potentially disastrous bid for struggling cellphone giant Nokia (Helsinki: NOK1V). All this comes as analysts and Lenovo itself are predicting it could overtake struggling Hewlett-Packard (NYSE: HPQ) for the title as the world’s biggest PC maker by the end of this year, becoming the first major Chinese high-tech brand to take such a global title.
Groupon Retreats, Dianping Mobilizes 中国团购业继续整合
The shakeup in China’s online auction space continues, with global pioneer Groupon (Nasdaq: GRPN) effectively retreating from the market just a year and a half after it entered while up-and-comer Dianping passes an important milestone in the mobile space. The shake-up has been going on since the beginning of the year, fueled by rampant competition that has caused many Chinese consumers to rapidly lose interest in group buying deals from companies that look increasingly shaky as many run out of cash and are forced to close or make massive cutbacks. Of course the big really news from this space has yet to come, but could be just a month or 2 away when I predict that cash-challenged giant LaShou will either be forced to shut down or get purchased by one of the industry’s stronger players. But more about that in a moment.
CNOOC’s Nexen Buy: Doomed to Fail? 中海油收购Nexen注定失败？
It’s been less than 2 weeks since Chinese oil major CNOOC (HKEx: 883; NYSE: CEO) announced its blockbuster plan to buy Canadian oil company Nexen (Toronto: NXY), and already we’re seeing swirls of controversy emerging in reports of insider trading and the hiring of political heavyweights around the deal. But I’m fairly certain these tales of minor intrigue are just a preview to the main show, which will see Canada and the US launch national security investigations that will ultimately sink this $15 billion deal.
Online Wars Hit Suning, No Relief in Sight 电子商务价格战拖累苏宁业绩
Here’s a word of caution to anyone who might have thought that China’s bloody e-commerce wars may start to ease in the second half of the year as companies start to run out of cash: Don’t get your hopes too high. That’s my main conclusion after looking at newly released first-half results for Suning (Shenzhen: 0020204), one of China’s top electronics retailers that seems determined to sacrifice short-term profits in its aggressive drive to build up its fast-growing online business. The big problem in China’s e-commerce wars, which began more than a year and a half ago, has been that most players have access to huge reserves of cash from outside sources and all have indicated they will continue to use that money to fund operations no matter how much their loses mount.
Suntech, Trina in Solar Blood-Letting 光伏产业已经触底？
Just when you thought the struggling solar sector’s prolonged downturn had reached bottom, industry leaders Suntech (NYSE: STP) and Trina (NYSE: TSL) have put out announcements that seem to indicate they used creative accounting to hide the magnitude of their suffering. While these latest 2 announcements have clearly spooked investors, I’m going to take a somewhat contrarian view and say these confessions may actually be a positive sign for an industry suffering through a downturn that has lasted nearly a year and a half now, sending all major players deeply into the red. My reason is simple, namely that big players like Suntech and Trina are confessing to these problems because they think the worst of the downturn is behind them, and they want to clean up their balance sheets to position themselves for a fresh start when a recovery begins.
ZTE Stock: Long Winter Ahead 中兴股价的冬天或将很长
Amid a growing wave of setbacks for telecoms equipment maker ZTE (HKEx: 763; Shenzhen: 000063), I thought it might be interesting to look at the company’s stock and whether it might be a good time to buy shares for a firm that seems to have good long-term potential despite its recent string of negative news. A quick look at the numbers leads me to conclude that despite losing nearly 60 percent of their value over the last 52 weeks, ZTE shares are probably still overpriced and are unlikely to make any major gains from their current levels over the next year.
