Instead of lamenting the latest blow to the embattled solar sector that this time is coming from Europe, I’m going to take a different approach today and say that perhaps the ongoing flood of resistance from the west towards Chinese solar subsidies could actually have some positive long-term effects. The reason is this: Beijing, for all its good intentions, has shown it can throw money at developing industries to quickly establish big new manufacturers with major production capabilities. But those fast-rising powerhouses tend to be relatively bad at innovation, with many of the major new advances in the solar sector still coming from the west even as a growing number of players in the US and Europe go bankrupt.
Journalist China
Ctrip: Time to Take a Ride? 携程：行到柳暗花明处？
I’m going to break with my usual style of starting each posting with the news, and say that shares of leading online travel site Ctrip (Nasdaq: CTRP) look like quite a bargain to me based on the non-stop sell-off of a stock for what looks like quite a solid company to me. That sell-off continued on Wednesday, when Ctrip shares lost 10 percent of their value after the company reported earnings that showed the overheated competition in China’s online travel space continues. (earnings announcement)
SNS Real Names: Crackdown Ahead? 社交媒体未“实名” 或面临更严厉监管
I read with amusement this morning a report stating that Baihe, one of China’s smaller social networking sites, is still letting people register under any name they choose, even though Beijing rolled out a controversial “real name registration” system months ago designed to curtail rumor mongering. The report, which looks credible, reflects the very real fact that such real name registration has been difficult if not impossible for not only Baihe but also much bigger names like Sina (Nasdaq: SINA) and Tencent (HKEx: 700) posing a very real risk for these Internet titans if and when Beijing decides to enforce the real name rule, or even worse, to punish companies that have failed to comply.
Earnings: Baidu Picks Up, Huawei Hurts 百度和华为公布业绩
Leading search engine Baidu (Nasdaq: BIDU) and top telecoms equipment maker Huawei have both just announced their latest quarterly results, reflecting slowing growth both at home and abroad that each will have to deal with as the global and Chinese economies struggle. But whereas Huawei’s story looks rather dire, Baidu was able to post some solid advertising numbers, showing it remains resistant so far to a downturn that has affected many of its rivals.
Telcos: China Mobile Slips, Unicom Rises 电信业半年回顾：中国移动滑落 联通顺势崛起
As we reach this year’s halfway point and companies start reporting their mid-year results, I wanted to take a quick look at China’s telecoms landscape and some of the major highlights over the first half of the year, including a recent surge by China Unicom (HKEx: 762; NYSE: CHU), the country’s second largest mobile carrier. China’s 3 telcos, Unicom, China Mobile (HKEx: 941; NYSE: CHL) and China Telecom (HKEx: 728; NYSE: CHA), all released their June subscriber totals late last week, revealing some subtle but interesting changes from the beginning of the year as the trio look to develop third-generation (3G) mobile services that are the wave of the future.
Doubts Linger on New Oriental, Citic Securities 新东方和中信证券料将面临更多动荡
I’d like to start off this Monday with a brief apology for my own erratic writing these last few days, as I’ve been traveling in the US and my schedule has become a bit spotty. But that said, I’ll begin this sunny Monday in Los Angeles with some postscripts to items I wrote about last week on troubled education services firm New Oriental (NYSE EDU) and leading Chinese brokerage Citic Securities (HKEx: 6030; Shanghai: 600030), neither of which is inspiring much confidence in investors these days.
Citic Securities, Banks See Brief Uptick 中信证券和银行业的“昙花一现”
Stock markets are often said to be leading indicators of things to come, a factor that could explain why top Chinese brokerage Citic Securities (HKEx: 6030) has just posted relatively strong financial results in the first half of the year despite a rapidly weakening stock market. The newly released report from Citic Securities shows the company’s profit attributable to owners of its parent fell 24.5 percent in the first half of 2012, while its earnings per share fell more sharply by 33 percent. (HKEx announcement) While neither of those numbers sounds very impressive, both are an improvement over the company’s 36 percent drop in first-quarter profit, indicating that its situation may be stabilizing after a weak stock market performance hit its results in 2011.
Mobile Internet Passes the Desktop 手机成中国网民最大上网终端
A government agency has just released data showing that mobile Internet users in China have passed traditional desktop users for the first time, posing an interesting challenge for all players that have typically designed their products for people who surf the web from fixed-line PCs at home and in Internet cafes. This move reminds me of a similar shift to mobile from desktop computing now taking place worldwide that is dealing a blow to former PC giants Intel (Nasdaq: INTC) and Microsoft (Nasdaq: MSFT), which have long dominated the desktop computing arena but are having trouble in the mobile space.
New Oriental Gets Accounting Lesson 新东方受到会计调查
Tuesday was not a kind day to US-listed Chinese companies, as education specialist New Oriental (NYSE: EDU) led a downward charge that saw its shares go into free-fall, losing a third of their value, after it released its latest quarterly results. But investors weren’t focused on the results themselves, which were actually quite respectable, but rather got spooked by a note near the bottom of the announcement saying the company was being investigated by the US securities regulator for its accounting practices. (results announcement)
UnionPay Gets Setback in WTO Ruling WTO裁定中国银联垄断
In what looks like a big setback for UnionPay, the World Trade Organization has ruled that the financial services network operator has an illegal monopoly that unfairly locks rivals like MasterCard (NYSE: MA) and Visa (NYSE: V) out of the market for settling financial transactions denominated in China’s currency, the renminbi. But while this ruling may represent a victory for Visa and MasterCard in the longer term, I have no doubt that the decision will be meaningless for at least the next few years, as Beijing, even if it decides to comply with the ruling, erects bureaucratic obstacles to make sure that UnionPay maintains its monopoly status for now.
E-Commerce Wars Hit Suning 苏宁沦为电商价格战的新俘虏
Electronics giant Suning (Shenzhen: 002024) has become the latest Internet player to fall victim to China’s bloody e-commerce price wars, issuing a profit warning as companies get set to report their second-quarter results. Suning’s warning shouldn’t really surprise anyone since these price wars have been going on for about a year now. So perhaps the 10 percent drop in Suning shares yesterday — the daily allowable maximum under China’s stock market rules — reflects investor realization of just how bad these price wars have become and fact that Suning will suffer some major profit erosion before the situation finally eases.
