Journalist China

The list of contract winners for China Mobile’s (NYSE: CHL; HKEx: 941) expanded TD-LTE trials is out, with one or two surprises in the race to see who will ultimately build the world’s largest 4G mobile network. The biggest surprise is that Motorola, which had virtually disappeared from the China mobile scene in recent years, was awarded a contract to build a trial 4G network in Xiamen, according to one of my well informed sources. Ericsson (Stockholm: ERICb), after being left off initial winner lists, has also found a spot building a trial network in Shenzhen, where hometown giant Huawei will also build a network. Other winners include ZTE (HKEx: 763; Shenzhen: 000063), which got Guangzhou; Nokia Siemens Networks, which got Hangzhou; Datang, in Nanjing; and Alcatel Lucent (Paris: ALUA), in Shanghai. In my mind, the clear winner in all this is Nokia Siemens, as they now get not only one but two chances at building China Mobile’s commercial 4G network with their pending acquisition of Motorola’s networking business. Ericsson appears to have squeezed in through the back door to stay in the race, but looks to be a bit of a lame duck after being forced to share Shenzhen with archrival and local giant Huawei.

Bottom line: Nokia Siemens looks to be the big winner in China Mobile’s expanded 4G trials, with Ericsson struggling to stay in the picture.

中国移动<0941.HK>TD-LTE规模试验网络合同中标企业名单已经出炉，其中有一两家企业入围颇让人感到意外。据我的一名可靠消息人士，其中最让人意外的是，近年来在中国逐渐淡出人们视线的摩托罗拉赢得在厦门建设4G试点网络的合同。爱立信<ERICb.ST>最初曾落选，但最终仍获得承建深圳试点网络的机会，本地英雄华为也将在深圳建设一个网络。其他的赢家包括，中兴<0763.HK>承建广州网络，诺基亚西门子承建杭州网络，大唐承建南京网络，阿尔卡特朗讯承建上海网络。在我看来，最明显的赢家是即将收购摩托罗拉无线业务的诺基亚西门子，因为它实际赢得了两个在华建设4G网络的机会。爱立信似乎是从後门挤进来勉强留在本次竞争中，但因被迫与死对头华为分享深圳市场，看起来有点失魂落魄。

一句话：诺基亚西门子看来是大赢家在中国移动扩大4G试点的项目，但爱立信前途不佳

Related postings 有关文章:

◙ China Mobile Wi-Fi Play Misguided 中移动：百万WiFi热点？

◙ China Mobile Pushes Ahead With 4G Trial, Challenges Regulator 中国移动急於进军4G

◙ 4G Trial Expansion Looms, But Real Networks Still Years Off

It seems group buying site Lashou has attracted not only the hearts and dollars of Chinese consumers, but also overseas investors. Just one year after its founding as China’s answer to Groupon, Lashou has received a whopping $111 million in new funding from three European investors, including London’s Miilestone Capital Partners (English report; Chinese report) So what’s going on here, you might ask? The company doesn’t even earn a profit yet, and doesn’t see an IPO for at least two years. Instead, these European investors see in Lashou an opportunity to create a regional giant to rival Groupon, which only recently launched its own Asian sites in a number of countries, including China. My main concern is that 1-year-old children aren’t usually ready to handle so much cash, meaning execution on this smart game plan could be tough. But with sharp Western investors helping to guide this company forward, I’d give them a good chance of success.

Bottom line: Lashou stands a good chance of becoming a regional group buying powerhouse, drawing on its China base and strong support from major Western investors.

看样子，团购网站拉手网不仅吸引了中国消费者的心和钱包，还引来海外投资者的浓厚兴趣。该网站成立刚刚一年，现在就获得了三家欧洲投资方1.11亿美元的新投资。你可能会问，怎麽回事？这家网站还没有开始盈利，未来至少两年内也没有上市的打算。其实，这些欧洲投资者看到，他们有机会参与创建一家可与 Groupon相抗衡的地区团购巨头。Groupon最近刚刚在中国等国家推出自己的亚洲网站。我主要的担心是，这个1岁大的孩子恐怕还没做好管理这麽多现金的准备，执行公司出色发展规划的难度有点大。但有精明的西方投资者帮忙，我觉得他们成功的机会也不小。

一句话：拉手如果好好利用他中国基楚与国外投资者的经验，可以当亚太地区的大手，

Related postings 有关文章:

◙ Lashou: A New Race to Market for Homegrown China Groupon

◙ Groupon in China: Real Deal or Same Old Story?

◙ China Groupon Charging for IPO Gate

Mobile security software maker Netqin appears to have scaled back its New York IPO, no doubt due to a steady stream of negative publicity as it prepares to list. Chinese media are reporting the company is now aiming to raise around $75 million, a 25 percent reduction from its previous plans, giving it a relatively modest market cap of $475 million. (Chinese article) As many of you may recall, this is the company that I previously wrote about after it suffered recent setbacks on a number of fronts, including being shut out by China’s three major telcos and an investigative report by state-run TV giant CCTV alleging it grossly overstated 2008 revenue in its IPO prospectus. It seems investors are finally taking note, after they largely ignored similar controversy around Qihoo (NYSE: QIHU) another Web security company that investors embraced in its New York debut last month. After more than doubling in its debut, however, Qihoo shares have fallen 30 percent from their high though they still trade well above their IPO price.

Bottom line: Netqin is destined for a low-key IPO, as investors avoid the stock due to a string of negative publicity in China.

在近来一系列负面报 道的打击下，手机安全软件公司网秦被迫降低了计划在美国IPO的融资规模。中国媒体报导说，网秦将融资目标降为7,500万美元，较此前低四分之一。依此计算，网秦的总市值在4.75亿美元左右。 此前，投资者对於计划在美上市的中国网络/科技公司的负面新闻似乎充耳不闻：奇虎<QIHU.N>尽管官司缠身，在纽约上市仍旧备受追捧，股价迅速翻番。但近期奇虎股价从高点下跌了30%，显示投资者正在回归理智。

一句话：四面楚歌的网秦被迫计划低调IPO。

Related postings 有关文章:

◙ Netqin IPO Tangled in Top Line Tussle CCTV再度揭露网秦

◙ Gmail, Netqin Spar with Chinese Censors Gmail,网秦

◙ Qihoo: A Strange Tiger, Indeed 奇虎：真的是头怪虎！

The rumor mills have been buzzing about a deal that would see social networking juggernaut Facebook finally gain access to China through a tie-up with a local partner. But the bigger question is: will Facebook be able to succeed in China at this late stage, considering the stiff competition and other obstacles it will face. My answer is a definitive “no”. First a recap of the reports, which all say that Facebook has held talks on a tie-up to enter China, where its global site is officially blocked. One Chinese report goes further, saying Facebook has signed a definitive agreement with local Internet search leader Baidu (Nasdaq: BIDU) as the partner. (English report; Chinese report) With so much buzz, my guess is that something is really happening, though it’s unclear exactly what. What is clear to me is that Facebook’s chances of success in China are very small. The market is already crowded with a number of very successful players, including two Kaixins and Renren among others. Furthermore, history has shown that foreign Web firms have a bad record when working with Chinese partners, and usually do much better just buying a stake in a local company and letting that company run the show.

Bottom line: Facebook is destined to fail in China, even if it can finally enter the country via a tie-up with a local partner.

近来关於Facebook通过与本地公司合作曲线进入中国市场的传言不断。但真正的问题是：即使Facebook真有此计划，在重重竞争和监管障碍之下，它能否成功进入中国市场？我的回答是：绝对没有可能。此前的报导说，在中国大陆被封的Facebook正在与中国公司商讨合作计划，甚至有报导说 Facebook已经与百度<BIDU.O>签署了协议。如此众说纷纭，我估计的确是有所动作，但究竟是什麽性质还不明朗。能确定的就是，Facebook成功进入中国市场的可能微乎其微。在社交网站领域，中国市场已经有了若干非常成功的本土企业，包括开心网，人人等。另外，此前国外网站与中国本土网站合作的案例，往往结局不佳，倒不如直接入股本土公司，让其自行运营。

一句话：即使Facebook能曲线进入中国市场，也必然面临失败结局。

Related postings 有关文章:

◙ Snaptu: Facebook’s China Back Door? Facebook在中国走“後门”？

◙ Linked In Braces for Lock Out, But Does It Really Matter?

◙ Ren Ren chases me-too IPO

A bit of musical chairs at China’s oil majors has been making headlines lately, followed mostly by predictions that nothing will come of the changes. The moves I’m talking about will see the former chairman of CNOOC (HKEx: 883; NYSE: CEO) become chairman of rival Sinopec (HKEx: 386; NYSE: SNP), while a top exec at China National Petroleum Corp, parent of PetroChina (HKEx: 857; NYSE: PTR; Shanghai: 601857), will fill the top job at CNOOC. (English article) While this does look like a bureaucratic reshuffling among state-run giants, I would take a slightly different view. The reason is this: China’s telecoms industry saw a similar shuffle in 2004, that also seemed largely political at first. But since then, industry leader China Mobile (HKEx: 941; NYSE: CHL) has gone on to further consolidate its industry leading position, taking its share from 2/3 of the market at the time to 3/4 now. Unicom (NYSE: CHU; HKEx: 762) went on to lose much of its edge and innovation as the industry’s No. 2 player, while China Telecom (NYSE: CHT; HKEx: 728) went on to become downright boring under an uninspired new chief. If history repeats itself, the latest oil reshuffle could bode well for Sinopec, as its new boss was known for his entrepreneurial and innovative leadership at CNOOC.

Bottom line: China’s oil industry reshuffle should bode well for Sinopec over the next 3-5 years, transforming it into a more nimble, innovative company.

近来中国三大石油巨头如同“抢椅子”游戏一般互换高管，不少分析人士对此不以为然，认为没有任何实际效果。表面看起来，这的确与其他中国国有企业的例行高管轮换没什麽区别。但我的观点略有不同，原因在於：2004年，中国电信业采取了类似的高管大换班。自那以来，行业老大中国移动<0941.HK><CHL.N>进一步巩固了自己的领导地位，市场份额由当年的三分之二扩张至如今的四分之三；联通<0762.HK><CHU.N>保住了行业第二的地位，但锐气和创新力所剩无几；中国电信<0728.HK><CHT.N>更变得死气沉沉。如果这段历史在石油业重演，那就意味着中石化<0386.HK><SNP.N>将受益，因为中海油集团<0883.HK><CEO.N>总经理傅成玉调任中石化集团担任董事长，而傅成玉的领导和创新能力在业内有口皆碑。

一句话：中国石油巨头高层轮换有利於中石化在未来3-5年内的发展，在傅成玉的领导下，中石化将变得更加灵活、富于创新。

Related postings 有关文章:

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

◙ Oops: Beijing thows oil majors a meager bone

By Sheena Lee

Taiwan’s HTC (Taipei: 2498) has passed both Nokia (Helsinki: NOK1V) and BlackBerry maker Research In Motion (Toronto: RIM) in terms of market cap, shocking many of us including Wall Street Journal tech guru John Paczkowski who called it “dumbfounding.” (article) As a Taipei journalist who covered HTC from 2006-9, I still remember the first time I visited their slightly run-down headquarters outside [HTC: Taiwan’s new global giant] Taipei. At that time they told me that although unknown to many, they were already the world’s top smartphone maker, and showed me models they made for T-Mobile, Verizon and Orange. Six months later, they started their own brand to improve margins. Many were skeptical due to the recent failure in the cell phone space at that time by another former Taiwan high-flyer, BenQ. Obviously the skeptics were wrong. I am still amazed at HTC’s rapid rise, and spot their ads and phones everywhere in New York where I now live. With the huge growth potential for Google’s (Nasdaq: GOOG) Andriod operating system, which HTC uses, the company seems to have an extremely attractive long-term story. The short-term could be choppier due to supply disruptions and higher memory chip prices caused by the earthquake in Japan. With a 15X PE ratio, versus 12.5X for Nokia, and 8.6X for RIM, the stock may also be slightly pricey.

Bottom line: HTC looks well positioned for the long-term, though could see some choppiness over the shorter horizon.

Editors note: This marks the launch of our first guest posting, which will become a regular feature at YCBB. If you have an idea for a post, please contact us at newsdoug@youngchinabizblog.com.

So, what new can I say about Disney’s (NYSE: DIS) official ground-breaking for its Shanghai theme park, a development that caps years of hype about the potential of the China market for the world’s best known theme park operator? The official groundbreaking for the park in Shanghai included some of the first formal financials we’ve seen, including a $3.7 billion price tag for the first phase and Disney’s 43 percent stake in the project. Local construction companies will surely benefit in the park’s construction, but one more overlooked group that’s likely to get a boost are the city’s hotels, especially budget operators that will cater to the droves of out-of-town Chinese who want to see Mickey but don’t want to spend $200 a night for a room at the Inter-Continental or Westin. So who am I talking about? In this case, it would be the usual suspects with strong property portfolios in Shanghai, including Home Inns (Nasdaq: HMIN), Jinjiang Hotels (Shanghai: 600754), China Lodging Group (Nasdaq: HTHT), operator of the Hanting chain, and Motel 168.

Bottom line: Shanghai-focused budget hotel chains will see business boom after Disney opens its new theme park in the city.

Related postings 有关文章:

◙ Shanghai Support to Provide Welcome Tonic for Disney

◙ 7 Days vs Home Inns: A Tale of Two Hotel Chains?

There’s more news out on the latest stumbles by former Chinese superstars Huawei and ZTE (HKEx: 763; Shenzhen 000063) as they try to break into tough Western markets. First Huawei. After being selected as a finalist to supply 4G equipment for US Cellular, the sixth largest US wireless carrier (English article), Chinese media are reporting that a group of US congressmen have petitioned Barack Obama asking him to take Huawei out of the running. (Chinese article) This is exactly the kind of interference that has killed previous deals, including Sprint’s (NYSE: S) rejection of ZTE for a similar deal in February. (previous post) Obama needs to take a stand and tell these Republicans to go away, though he may be reluctant with presidential elections coming next year. As to ZTE, the company has put out a statement saying a new lawsuit by Ericsson (Stockholm: ERICb) won’t affect it much as the suit was filed in the UK and it doesn’t do very much business there. (press release). The problem is, Western countries usually honor each other’s intellectual property judgments, meaning a ruling against ZTE in the UK will probably be observed by other Western governments and thus many buyers in those markets will be reluctant to do business with ZTE until this case is settled.

Bottom line: Huawei and ZTE may eventually overcome the recent flurry of resistance to them in the West, but they may need help from the Chinese government to do so.

中国电信设备巨头华为和中兴<0763.HK><000063.SZ>近来真是挫折不断。先说华为。此前它被美国第六大无线运营商 US Cellular选为提供4G设备的最终候选供应商之一，但近期中国媒体报导，一批美国议员向奥巴马上书，要求取消华为的候选资格。这与中国电信企业此前在美国遭遇的歧视性干预如出一辙–Sprint电信公司今年二月就回绝了中兴的投标。奥巴马应该做出表态，让那些共和党议员一边呆着去。但是，着眼明年大选的奥巴马恐怕不愿因此得罪共和党议员。中兴针对爱立信提起的知识产权诉讼发表声明说，这起在英国提起的诉讼对其影响不大，因为中兴在英国业务不多。但问题是，西方国家通常会尊重其他国家做出的知识产权方面的判决，这就意味着如果中兴在英国败诉，其他西方市场会遵循判决结果，令中兴举步维艰。

一句话：华为和中兴有可能熬过近期在西方市场遇到的挫折，但他们需要中国政府的帮助才行。

Related postings 有关文章:

◙ Huawei: Strength in Separation? 华为：大胆

◙ Huawei quits 3Leaf buy, but stay tuned for more

◙ ZTE US, India Moves Smell of Desperation 中兴通讯急了

In an interesting development for China’s solar industry, US manufacturing heavyweight 3M (NYSE: MMM) is jumping into the crowded market with plans to build a major solar products plant in Anhui province. (press release) While it does look like this venture is designed to supply rather than compete with major solar cell makers like Suntech (NYSE: STP), Trina Solar (NYSE: TSL) and JA Solar (Nasdaq: JASO), most of the majors do have investments of one kind or another in solar materials. It’s also interesting to note the expansion of such a major global player in this market, joining a handful of other multinationals like Fluor (NYSE: FLR). In fact, I wouldn’t be surprised to see this new plant use some of 3M’s wide resources to provide serious competition with existing players, all clamoring for a piece of the pie as China ramps up its spending on solar energy.

Bottom line: 3M’s new solar investment in China underscores the growing importance of the China market to development of the global sector.

美国制造业大佬3M要进入本已拥挤不堪的中国太阳能市场，计划在安徽省建立一个大规模太阳能产品生产厂。乍看来，这家工厂似乎是要为尚德<STP.N>、天合<TSL.N>、晶澳<JASO.O>等中国主要的太阳能电池生 产商提供原料、而不是与它们竞争，但这些中国大企业其实也都乐涉足太阳能原材料投资。所以，如果3M将利用自己的广阔资源来与中国太阳能企业展开激烈竞 争，也丝毫不足为奇。

一句话：3M投资中国太阳能产业显示了中国市场对於全球太阳能产业的重要性。

Related postings 有关文章:

◙ Japan Nuclear Woes Brighten Outlook for Solar Firms 日本核危机提振太阳能公司前景

◙ Suntech Shines With Solar Services 尚德：进军太阳能服务业

◙ Oil Could Heat Up Solar Firms, Spark Consolidation

China Mobile’s (HKEx: 941; NYSE: CHL) new wi-fi initiative shows it is finally admitting it needs a good high-speed wireless Internet alternate to its problematic 3G network. According to Chinese media, the company is trumpeting a new initiative that will see it boost its fledgling wi-fi network to 1 million hot spots in the next three years. (Chinese report) While I like that China Mobile is finally admitting it needs a better product to be competitive in high-speed wireless Internet, this latest initiative looks like a good way to spend lots of money with very little hope for serious rewards. I’ve seen too many large-scale wi-fi initiatives with similar goals that have simply failed to find an audience. The problem is, people either want their mobile Internet in individual shops, like a Starbucks or fast food restaurant, or they want a network they can access anywhere. No one seems interested in an in-between product, which is what China Mobile wants to create.

Bottom line: China Mobile’s new wi-fi expansion is good in concept, but will end up a dud just like its 3G network.

中国移动董事长王建宙表示计划三年内在全国增建WiFi热点至100万个，实际上是承认了自己的3G网络存在不足，因而需要用大规模高速WiFi网络来加以弥补。尽管我赞赏中国移动勇于承认不足，但这个”百万WiFi热点”计划却将事倍功半。我见过太多类似的大规模WiFi网络计划，最终都因无人问津而惨遭失败。问 题在於，人们要麽需要在固定公共场所接入无线互联网，比如星巴克咖啡馆，要麽需要在行动中随时随地接入无线网；而对介於两者之间的产品则兴趣寥。而中国移 动计划之中的恰恰似乎是这麽个产品。

一句话：中移动的”百万WiFi热点”计划看似不错的概念，但在实践中将成为与它的3G网络一样的败笔。

Related postings 有关文章:

◙ China Mobile Pushes Ahead With 4G Trial, Challenges Regulator 中国移动急於进军4G

◙ 2011: Year of the Unicom 2011：联通的好运年

◙ 4G Trial Expansion Looms, But Real Networks Still Years Off

Leading web portal Sina (Nasdaq: SINA) has just announced a number of new moves for its highly popular Weibo microblogging service, often called China’s version of Twitter, that hint at a spin-off in the near future. None of the moves, including the roll-out of a Weibo-specific domain and a new Weibo logo, are very big news individually. (Chinese article) But what they collectively seem to say is that Sina wants to wean this very popular baby away from its parent and let it stand on its own two feet. I’m guessing that as part of the broader plan, Weibo executives will feel some pressure to better manage their own bottom line and find more ways to make money off this service that has a huge following in China, where Twitter is officially unavailable due to censorship. If all goes according to plan, I’d say to look for a Weibo spin off and IPO in the next two years.

Bottom line: Sina is getting serious about spinning off its Weibo business, paving the way for big profits and an IPO in the next two years.

中国第一大门户网站新浪<SINA.O>在微博方面的一系列新举动–启用独立的微博域名Weibo.com和新的微博logo–似乎表明它有意将微博业务独立出来。我猜，现在新浪微博的管理层将在探索更多盈利模式、增加盈利方面面临更大的压力。如果一切进展顺利，新浪微博在未来两年之内可能剥离上市。

一句话：新浪有意剥离微博业务，并可能在未来两年内IPO。

Related postings 有关文章:

◙ Sina Searches for Roots in Google Break 新浪与古歌断交，搜索自己的根

◙ Weibo: Sina Looking at Big Bucks in Micro Packages

◙ Sina Puts Cash Pile to Work in Mecox