Journalist China

In what I can only describe as a stroke of brilliant PR by China’s top two oil companies, both PetroChina (NYSE: PTR; HKEx: 857) and Sinopec (NYSE: SNP; HKEx: 386) have posted very strong first quarter numbers but also managed to draw attention to how much they’ve suffered due to high oil prices. (English article) Sinopec in particular was very creative, saying it kept down its refining losses during the quarter by relying on crude oil stockpiles it accumulated when oil prices were lower. PetroChina, meantime, relied on its crude oil business to offset its own massive refining losses. The PR blitz underscoring the problems they face comes as Chinese consumers express growing frustration with high gas prices, and as Beijing grows increasingly worried about inflation. Analysts are saying to look for Beijing to grant another price increase in the not-too-distant future, and such an increase may indeed be coming. But with crude oil prices unlikely to go much higher and perhaps even come down as the Libya situation plays out, don’t look for an inflation-worried Beijing to approve any major hikes in gas prices anytime soon.

Bottom line: PetroChina and Sinopec have launched an effective PR campaign to highlight losses from their refining operations, but don’t look for any major gasoline price hikes from Beijing.

中石油<0857.HK><601857. SS>和中石化<0386.HK> <SNP.N>一季度财报喜人，但却成功地让大家注意到他们的炼油业务是如何饱受油价飙升之苦的。我只能说，这是一个高明的公关策略。中石化尤其有创意，称其一季度控制住炼油业务亏损原因靠的是在油价较低时囤积的原油库存。中石油则同时宣称，依赖原油业务抵消了炼油业务的大幅亏损。在中国消费者对高油价日益不满，中国政府对通货膨胀日益担心之际，这两家公司的公关策略凸显了两家公司所面临的问题。分析人士表示，估计在不久的将来，中国政府将批准燃料油再次涨价。但实际上在原油价格不大可能变得更高，而且随着利比亚动荡的局势趋向平稳，甚至可能会下跌。因此别指望中国政府允许油价大幅度提升。

一句话：中石油和中石化的公关策略卓有成效，强调了其炼油业务的亏损，但别指望中国政府会允许油价大幅上涨。

Related postings 相关文章:

◙ Sinopec Fights Back With Feeble PR Blitz 中石化公关仍不到位

◙ Sinopec Scandal Points to Big Oil Crackdown 中石化：“天价酒”事件实为敲山震虎？

◙ PetroChina Gets in Bed wtih Saudis to Secure Oil Supplies 中石油的沙特“情缘”

In the brief but colorful race to market between China’s top two social networking sites, both often called the Facebook of China, early leader Renren seems determined to take the prize despite a number of scandals surrounding its bid. In the latest of those, the chairman of its auditing committee, a foreigner with bountiful experience in Chinese start-ups, has resigned due to an unrelated accounting scandal at another company, Longtop Financial (NYSE: LFT), where he is now CFO. (English article; Chinese article) The resignation follows other smaller scandals, including a downward revision of Renren’s new user numbers in the first quarter (previous post) and a lawsuit by rival Kaixin, now being heard by China’s high court, over a disputed domain name. (previous post) All the noise doesn’t seem to have deterred investors hungry for the latest China Internet play, with Renren actually raising the size of its offering to nearly $700 million from a previous $500 million due to strong demand. Barring any last-minute disasters, it does seem like Renren will win this race as it plans to make its IPO on Tuesday in New York. But even if it wins, look for plenty of quick profit taking after the debut and lots of volatility in Renren’s stock in the months ahead until all the issues are resolved.

Bottom line: Renren may win the race to market with rival Kaixin, but its stock will be very volatile in its first few months as it resolves a number of outstanding issues.

在中国的两家最大的社交网站——人人网和开心网竞相追求IPO的过程中，人人网看起来心意已决要赢得这场赛跑。人人网审计委员会主席德雷克·帕拉舒克，一个在中国初创企业拥有经验丰富的外国人，因其在Longtop金融科技公司担任首席财务官期间的一个不相干的会计丑闻，而宣布辞去在人人网的职务，成为困扰该网站的最新一波丑闻。此前还有一些小的丑闻，例如人人网下调一季度新用户数，开心网就争议域名状告人人网正在接受中国最高法院审理等等。所有这些，都没有打消投资者对中国最新一波互联网上市狂潮的胃口。因需求量巨大，人人网实际上将筹集资金规模从5亿美元扩大到7亿。人人网打算周二在纽约IPO，很可能会如愿以偿。但即使如此，未来几个月估计会有很多快速获利了结现象，股价也会大幅波动，直至所有问题都得到解决。

一句话：人人网可能会在IPO一役中胜过开心网，但其股价可能会在首次公开招股後的前几个月出现大幅波动。

Related postings 相关文章:

◙ Renren Admits to Population Inflation; More to Come?

◙ Kaixin Fights Back in Race With Renren to Market 人人、开心上市大PK：开心扳回一局

◙ Renren Takes Lead Over Kaixin With Blockbuster Filing 人人网：风风火火IPO 气势盖过开心

Former high-flying car maker BYD (HKEx: 1211) has come out with an interesting strategy to try to win over skeptics of its grand electric car dreams: bury them with numbers. At least that’s the impression one gets from reading a new press release from the company, which updates investors on the many pilot EV projects it is now running. (Company announcement) Granted, the company’s various EV pilot programs do seem to have logged a lot of miles, showing they are moving forward. But nowhere in the pile of numbers is there any mention of issues that have cropped up in the course of all that driving; and there’s only one mention of additional orders in its home city of Shenzhen, where BYD is well connected, that might start to validate all this effort. You have to give them credit for placing such a big bet on EVs, and I do like their recent tie-up with Daimler to further develop EV technology. (English article) But I’m still not convinced that BYD — despite backing from Wall Street guru Warren Buffett — has what it takes just yet to become a leader in this area, and this update certainly doesn’t help to bridge the credibility gap.

Bottom line: BYD is trying hard to validate its massive electric car initiative, but has yet to produce any compelling results that show its efforts are bearing fruit.

一度风光无限的汽车制造商比亚迪<1211.HK>祭出了一个有趣的战略，试图打消人们对其电动车宏伟构想的怀疑：那就是用数字狂轰滥炸。至少有关其电动车项目的新闻稿给人这样的印象。虽然比亚迪试验的多款电动车听起来确实录得了不错的续航里程，说明这些项目的确在取得进展，但在这麽多数字里，我们找不到电动车试驾中出现的任何技术问题，而且只有一处提到了来自本土城市深圳的新增订单。比亚迪对电动车的大举压注值得称道，我也确实喜欢他们最近与戴姆勒合作开发电动车技术的举措。但我仍不能相信，得到股神巴菲特青睐的比亚迪真正具备成为该领域领先者的素质，公司最近发布的这一连串数字显然也无助於人们建立对它的信心。

一句话：比亚迪在努力试图证实其大规模电动车计划值得信赖，但迄今并未拿出任何具有说服力的具体成果。

Related postings 相关文章:

◙ China’s Green Auto Dream: A Road Paved with Problems 中国的绿色汽车之梦：前途荆棘密布

◙ It’s Good News, But More Is Needed To Jump-Start BYD 比亚迪：需要更多好消息

◙ BYD: Jump-Starting Stalled Sales With Auto Finance 比亚迪：试水汽车金融

It’s May in Shanghai and spring is finally in the air, which can only mean one thing: it’s time for Lenovo (HKEx: 992) to get into yet another new product area. First it was cellphones, then smartphones, then tablet PCs, and now the company is officially releasing its first gaming console. (Chinese article) I previously wrote that Lenovo’s new tablet PC, the LePad, could stand a good chance of success (previous post), given the company’s strong position in China which accounts for half of its sales. But I see very little to be gained from this latest gaming console plan, though admittedly details have been scarce so far. There’s a reason that Sony (Tokyo: 6758) and Microsoft (Nasdaq: MSFT) have all largely avoided the China gaming console market so far. In a nutshell, rampant piracy makes selling legitimate gaming titles — the main profit source for the console business — virtually impossible in China. Perhaps Lenovo has found a way to beat the pirates as it’s certainly very familiar with the China market. But if it hasn’t, which I suspect will be the case, this could become yet another failure for the company and also a major distraction from products it should be pursuing.

Bottom line: Lenovo is showing a worrisome tendency to chase too many products outside its core PC business, which could prove both distracting and resource-wasting over the longer term.

到了五月份，上海终於有春天的气息了，不过它还可以有另外一层含义：联想<0992.HK>又要试水新产品了。先是手机、接着智能手机、再接着是平板电脑，现在联想正式发布首款游戏机了。此前我曾写道，鉴於联想在中国市场的地位，乐Pad应有成功机会。但是对於联想最近的游戏机计划，我实难看到多大好处，虽说迄今计划细节寥寥。目前为止，索尼<6758.T>、微软<MSFT.O>基本避开中国游戏主机市场，这麽做必定有其中的道理。简单说，中国市场盗版盛行，销售正版游戏非常困难，而卖游戏又是主机业务的主要收入来源。联想深知中国市场情况，也许有办法打击盗版。如果不是这样，联想可能又要失败收场了，而且还会对公司应该推行的产品造成重大干扰。

一句话：联想似乎出现核心PC业务外全线出击的忧心趋势，长远而言可能不仅干扰主业、而且浪费资源。

Related postings 相关文章:

◙ Apple Takes A Second Look at China for iPad 2 苹果重新考虑中国市场

◙ Lenovo’s LePad: Finally a Game Plan That Could Work 联想乐Pad：终於拿出了像样的东西

◙ Motorola Comes Xooming Into China 摩托罗拉平板电脑偏重中国市场

It seems that ZTE (HKEx: 763; Shenzhen: 000063), already reeling from more recent setbacks than I can recount in this space, has just received yet another blow in its own backyard from crosstown rival Huawei Technologies. To be more precise, the actual blow has come in Europe where Huawei has sued ZTE for stealing its intellectual property, Chinese media are reporting (Chinese report) The recent follies of Huawei and ZTE, both aspirants on the global telecoms equipment stage, are beginning to look more and more like a soap opera. On the one hand, the latest lawsuit comes as a second blow to ZTE, which is also being sued in Europe by local giant Ericsson (Stockholm: ERICb). (previous post) Meantime, Huawei, seemingly frustrated at its slowing growth, is turning to lawsuits to fill its time, as this latest action follows another similar one against Motorola that briefly held up the purchase of Motorola’s networking assets by Nokia Siemens Networks. (previous post) Seeing Huawei actually turn on ZTE almost seems like a sad comedy, reflecting the frustrations that this pair of companies have faced on the global stage in the last six months.

Bottom line: Huawei’s latest legal attack on reflects a new stage in hostilities with crosstown rival ZTE, a development that will ultimately undermine both.

Related postings 相关文章:

◙ Growth-Addicted Huawei Looks to the Cloud 华为渴求增长上瘾 着眼云计算

◙ Motorola, Huawei Settle, Now Everyone Can Move On 华为与摩托罗拉和解，各方均受益

◙ ZTE, Huawei Stumble Some More 华为中兴：难兄难弟

What a difference a multibillion-dollar capital raising makes! ICBC (HKEx: 939; Shanghai: 601939) has just reported its first-quarter results, which show its profit rose an impressive 29 percent as it benefited from a growing interest margin spread fueled by China’s recent rate hikes. (English announcement; Chinese announcement) What’s less impressive is the fact that its earnings per share grew quite a bit less, at about 25 percent, as shareholders saw their equity significantly diluted last year after ICBC and China’s other major banks raised over $100 billion through a series of rights offers to boost their shaky balance sheets. While many are congratulating ICBC and its peers on keeping their non-performing loan rates low at around 1 percent, I would advise people to focus on the fact that Beijing has indicated that billions more in capital raising is likely to come (previous post). That means that EPS growth will sharply lag actual earnings growth, even if earnings growth itself remains strong, which is far from certain. I still see a mild to moderate downturn in China’s housing market coming, which will undoubtedly pressure ICBC and its peers in the next year or two and will ultimately draw attention to the tenuous position these banks are in.

Bottom line: ICBC and China’s other major banks will continue to remain risky plays for at least the next 2 years due to uncertainties about China’s real estate market.

Related postings 相关文章:

◙ China Readies Market for More Bank Begging 中资银行准备再筹资

◙ Banks: CCB Bets on Downturn, BOC Keeps Head in Sand 中行依旧高歌猛进，建行趋向保守

◙ Minsheng Fund-Raising Shift Reveals Govt Angst

In the latest twist in the increasingly complex race to market between Renren and Kaixin, China’s two Facebook wannabes, Renren has apparently confessed to US stock regulators that its initial public filing significantly inflated its user numbers. According to Chinese media, Renren has told the SEC in a new filing that it added 5 million new users in the first quarter, not a bad figure but quite a bit less than the 7 million it originally reported. (Chinese article) That means its user base grew base grew 19 percent in the quarter to 31 million, again not bad but well below the 32 percent growth it previously reported. Obviously people are starting to pay extra close attention to the numbers, not least of all rival Kaixin, which is seeking to derail Renren’s IPO plan with a lawsuit over one of Renren’s Internet domain names that is being heard in China’s highest court. (previous post). This latest twist would seem to indicate Renren’s plan and early lead in the race may be quickly losing momentum, as now people will start to question their other numbers as well. At this point Renren needs a quick boost from something, perhaps a court victory, a major investor endorsement or something else, if it wants to maintain its quickly fading lead in this race.

Bottom line: Renren’s latest admission that it inflated first-quarter user numbers is taking more momentum out of its fast-dwindling lead in its race to market with Kaixin.

Related postings 相关文章:

◙ Kaixin Fights Back in Race With Renren to Market 人人、开心上市大PK：开心扳回一局

◙ Renren Takes Lead Over Kaixin With Blockbuster Filing 人人网：风风火火IPO 气势盖过开心

◙ Renren Vs Kaixin: Who Will Get There First? 开心网PK人人网：谁能抢先上市？

While growth is generally good, it seems to have become an addiction for telecoms equipment superstar Huawei Technologies. After recently saying it would develop IT services to maintain its stellar growth as its manufacturing business matures, a Huawei exec has come out and said the company aims to boost sales another 200 percent over the next 5-10 years. (English article) The executive went on to say that Huawei’s next cash cow would lie in providing IT services in the enterprise and cloud computing spaces. While I admire Huawei for wanting to keep posting triple-digit growth (heaven forbid they should slip into double digits!), it does in many ways feel like this company has become obsessed with growth at any cost and may be losing its common sense. I’m not saying it can’t make such a transition — after all, IBM (NYSE: IBM) made such a move, and HP (NYSE: HPQ) is moving in that direction. But given that such transitions can be difficult —  Lenovo (HKEx: 992) tried and failed at a similar move less than a decade ago — Huawei and rival ZTE (HKEx: 763; Shenzhen: 000063) might be better advised to focus on developing new products that take advantage of their expertise as low-cost, quality manufacturers.

Bottom line: Huawei needs to give up its obsession with triple-digit growth and focus its energies on manufacturing of low-cost, quality telecoms products.

虽然一般来说增长是好事，但对於电信设备生产领域的明星公司华为来说，它对增长的渴望好像上了瘾。华为刚刚表示要发展IT服务业务，以保持强劲增长趋势之後，一位高管又站出来说，华为打算在未来5-10年把销售再增加200%。这位高管继续说，华为下一个现金增长源头将取决於IT服务业务和云计算。虽然我敬佩华为想要保持三位数增长的愿望（但愿不会下滑到两位数！），但从很多方面都能感觉到，这家公司已经到了不计代价寻求增长的地步，并可能会丢掉常识。我并不是说这家公司不能做出这样的转型—毕竟IBM<IBM.N>已经转型了，惠普<HPQ.N>也正在朝这个方向转型。但考虑到这种转型可能不容易—联想<0992.HK>不到十年前的类似尝试以失败告终—华为和中兴通讯<000063.SZ> <0763.HK> 也许更应该把精力集中在开发新产品，充分利用其在低成本、高质量电信产品方面的技术优势更好。

一句话：华为应该放弃对三位数增长的狂热，集中精力制造物美价廉的电信产品。

Related postings 相关文章:

◙ Huawei Looks for Growth in IT Services 华为在IT服务领域寻求增长机遇

◙ ZTE Results: Weak Link in Networks, Handset Hopes 中兴通讯财报：薄弱环节在网络设备手机有希望

◙ Troublesome Timing As China Approves NSN-Motorola 中国监管部门批准诺基亚西门子购买摩托罗拉网络业务时机不佳

The sun isn’t shining too brightly these days on solar energy firm LDK Solar (NYSE: LDK), which has just announced some decidedly downbeat updated guidance for its latest results. (company announcement) Among the headline numbers, the company lowered its revenue guidance for the first quarter to about $750 million, nearly 10 percent lower than a previous forecast of $825 billion. Clearly this company’s less-than-stellar management is starting to hurt both its top and bottom lines, as it battles for share in China’s ultra-competitive solar energy market and staggers under a huge debt load. If things continue this way, and there’s no sign they won’t, the company could face a major cash crunch in the near future. Market talk has it that LDK is looking to spin off its polysilicon assets into a $1-3 billion company to be listed in Hong Kong in a bid to raise cash to stave off the debt collector. But even if the talk is true, there’s no guarantee investors will be interested and it may take more anyway to turn this company around before it’s too late.

Bottom line: LDK’s latest downward revision to guidance marks the latest milepost in its broader downward spiral.

对於赛维LDK太阳能有限公司<LDK.N>来说，这几天阳光没有那麽明媚。这家公司刚刚公布看起来有些惨淡的经营展望，把一季度营收预期下调至7.5亿美元，比此前的8.25亿美元预期少了将近10%。很显然，这家债台高筑、步履蹒跚的公司在竞争异常激烈的中国太阳能市场抢夺市场份额之际，表现欠佳的管理团队已经开始损害其营收和利润了。如果还这样继续下去，似乎看起来也是如此，这家公司将很快面临现金短缺的状况。坊间传言，赛维LDK打算把其在多晶硅领域的资产剥离成一个估值10-30亿美元的公司，在香港上市，以缓解窘境。但即使传言是真的，也不能保证投资者%E

In a major about-face, Apple (Nasdaq: AAPL), after initially leaving China off its Asia launch list for the iPad 2 (previous post), has decided that maybe China is worth a second look after all. In a new announcement detailing its plans for Asia and non-European markets, Apple has suddenly added China to the launch list, saying the iPad 2 will be available there starting May 6 — just a week after it goes on sale in the usual list of major markets including Japan, Korea, Singapore and Hong Kong. (official announcement) This marks a major breakthrough for China, which, despite its growing consumer power, has until now remained a second-class market for major product launches. Chipmaker Micron Technology made a similar realization of China’s growing clout as a major gadget hub, announcing earlier this month it would triple the size of its China plant as the market accounts for more than half of its sales. (previous post) Interestingly, Apple said it will only launch its wi-fi iPad 2 in China for now, probably as it looks for a Chinese telco that will sign a revenue-sharing agreement rather than just purchase the iPads outright. If that’s the case, look for another major announcement from Apple and either China Unicom (HKEx: 762; NYSE: CHU) or China Telecom (HKEx: 728; NYSE: CHT) in the months ahead.

Bottom line: Apple’s decision to add China to its global launch list reflects the growing clout of China consumers, and Apple’s belief it can earn major returns there.

苹果<AAPL.O>起初没有把中国内地列入iPad 2在亚洲的首批发售市场之内，但现在却发现，也许中国内地还是值得考虑一下的。在苹果新近宣布的亚洲和欧洲以外地区发售声明里，突然将中国内地列入了名单中–5月6日起将开始在中国内地发售iPad2，仅比其在其常规重要市场–日本、韩国、新加坡和香港发售日期晚一周。对於中国内地市场来说，这是一个重大突破，因为尽管中国大陆购买力日益增强，但在苹果重大产品发布中仍然属於“二线市场”。芯片制造商Micron Technology也认识到了中国将来作为电子元器件中心的地位，本月初便宣布将把其在中国的工厂规模增加两倍，目前其在中国的销量也占到其全部销量的半数以上。有趣的是，苹果说目前只会在中国内地推出Wi-Fi版本iPad2，也许苹果是在寻找一家可与其签署收入分成协议，而不是仅仅买断iPad2经销权的中国电信运营商。如果是这样，那麽过几个月我们可能会看到苹果与中国联通<0762.HK><CHU.N>或是中国电信<0728.HK> <CHA.N>发表重要声明。

一句话：苹果决定将中国内地列入全球发售名单，说明中国消费者的影响力日益巨大，苹果相信可以在中国内地取得很大回报。

Related postings 相关文章:

◙ Apple to China: Sorry, You’re Not On Our List 中国达不到苹果iPad2的水平

◙  Motorola Comes Xooming Into China 摩托罗拉平板电脑偏重中国市场

◙ Lenovo’s LePad: Finally a Game Plan That Could Work 联想乐Pad：终於拿出了像样的东西

I love the imagery associated with the latest blockbuster deal on China’s fast food scene, which would see YUM brands (NYSE: YUM), operator of KFC and Pizza Hut restaurants, swallow up Little Sheep (HKEx: 968), China’s leading hot pot chain. (company announcement; English article; Chinese article) YUM is already well acquainted with Little Sheep, owning 27 percent of the Hong Kong-listed company. Its purchase of most of the remaining stake could make the total deal a sizable one, worth up to $500 million based on Little Sheep’s latest market cap. A purchase by YUM, whose KFC is already China’s largest fast food chain, could do wonders for Little Sheep, helping it boost its already strong position at home and even potentially taking it abroad in markets like Taiwan, Japan and South Korea, where hot pots are also popular. The big potential obstacle in all this is China’s regulator, which has shown an increasing tendency to use its anti-trust powers as a political tool, as it did two years ago when it vetoed Coke’s (NYSE: KU) proposed purchase of leading chinese juice maker Huiyuan (HKEx: 1886). If the regulator is smart, it will approve this deal and ignore any nationalistic sentiment, or risk further damaging its reputation as an objective and impartial anti-trust body.

Bottom line: China needs to approve YUM’s purchase of Little Sheep to improve its reputation, a move that could propel the Chinese hot pot chain to a domestic and even regional powerhouse.

近日媒体报美国百胜集团<YUM.N>将收购中国火锅连锁小肥羊<0968.HK>，这样的甜蜜姻缘我个人非常喜欢。百胜对小肥羊绝非陌生，它已拥有後者27%股权。百胜购小肥羊多数剩余股权，该交易规模较为可观，基於小肥羊目前市场，大约相当於5亿美元。如果收购成功，小肥羊有望壮大国内市场影响力，触角甚至有望伸向台湾、日本与韩国等地市场。牵手的最大潜在障碍在於中国监管机构。两年前可口可乐提议收购汇源果汁，就遭中国监管机构否决。中国监管机构如头脑灵活的话，就该放行交易，忽略任何民族品牌情绪，否则其客观与公正名声会进一步受损。

一句话：中国从名声考虑应批准百胜购小肥羊，而小肥羊也有希望成为国内，甚至地区性火锅连锁大品牌。

Related postings 相关文章:

◙ Troublesome Timing As China Approves NSN-Motorola 中国监管部门批准诺基亚西门子购买摩托罗拉网络业务时机不佳

◙ Starbucks China Expansion: New Brew Needed to Serve Up Success

◙ What’s in a Name? Plenty for Best Buy in China