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Journalist China
Business news from China By Doug Young.
Doug Young, journalist, has lived and worked in China for 20 years, much of that as a journalist, writing about publicly listed Chinese companies.
He is based in Shanghai where, in addition to his role as editor of Young’s China Business Blog, he teaches financial journalism at Fudan University, one of China’s top journalism programs.
He contributes regularly to a wide range of publications in both China and the west, including Forbes, CNN, Seeking Alpha and Reuters, as well as Asia-based publications including the South China Morning Post, Global Times, Shanghai Daily and Shanghai Observer
I’ve often criticized PC giant Lenovo (HKEx: 992) for its overly aggressive policies towards M&A and expansion, so I’m quite happy to offer some praise for the company’s sudden ability to say “no” in 2 recent moves that looked problematic. In the last 2 weeks, the company that formerly couldn’t walk away from any expansion deal has suddenly scrapped 2 potential new initiatives, one in smartphones and the other in online gaming consoles. The former instance has seen Lenovo walk away from a plan to take over the struggling cellphone business of Japan’s NEC (Tokyo: 6701), while the latter has seen the company get rid of its game console business called Eedoo. Read Full Post…
Yet another Chinese Internet firm is reportedly eying a Hong Kong listing, with word that mid-sized online gaming firm Suzhou Snail Digital is weighing an IPO to raise up to $100 million. This latest news must be worrisome to the 2 major stock markets in New York, which traditionally were the preferred listing venue for Chinese Internet companies and other start-up tech firms. Most of China’s biggest Internet firms now trade in New York, including search giant Baidu (Nasdaq: BIDU) and online travel services leader Ctrip (Nasdaq: CTRP). But the Nasdaq and New York Stock Exchange have lost some of their appeal over the last 2 years, amid waning interesting by investors and a crackdown against Chinese firms by the US securities regulator following a series of accounting scandals. Read Full Post…
Too much money isn’t always a good thing, as it often pressures companies to put that money to work even when good investment opportunities are limited. Baidu (Nasdaq: BIDU) demonstrated that reality earlier this week with its purchase of an online app store that had little relationship with its core online search business (previous post), and now Alibaba is also showing similar tendencies with its investment in an online travel services website. In Alibaba’s case, the new investment come as the e-commerce leader posted a record second-quarter profit, and as it prepares for a blockbuster IPO that increasingly looks like it will take place in Hong Kong. Read Full Post…
The controversial deal by China’s Shuanghui to purchase leading US pork products maker Smithfield (NYSE: SFD) is taking a new twist, with word that the former may attempt a Hong Kong IPO if and when it completes the purchase. Such a share offering looks quite smart, as it would allow investors to tap China’s huge appetite for pork. It would also allow them to buy into a major company whose size and foreign connections could reassure skeptical Chinese consumers jaded by a never-ending series of food scandals. But all that said, I have serious doubts about whether the deal will close due to building resistance in the US. Read Full Post…
More good news is coming from the battered solar panel sector, with mid-sized player ReneSola (NYSE: SOL) sharply boosting its revenue and margin forecasts for the current quarter in the latest sign of a sector rebound. ReneSola isn’t forecasting a return to profitability just yet, but the latest signs do seem to indicate the sector’s strongest players could return to the black by the end of this year if current trends continue. Some could also interpret this upbeat news as reflecting growing confidence that the EU and China could soon reach an important compromise that would prevent the former from imposing anti-dumping tariffs on Chinese solar panels. Read Full Post…
Everyone is talking about the latest blockbuster acquisition by online search leader Baidu (Nasdaq: BIDU), so I thought I’d get in my own quick thoughts on its purchase of one of China’s leading wireless apps suppliers. In some ways, Baidu’s purchase of 91Wireless for up to $1.9 billion looks like a smart move that will help it diversify beyond its core search business. But in others, the move seems to reflect an M&A strategy lacking focus, since the app business doesn’t really complement any of Baidu’s other core product areas. Read Full Post…
Two months after reports first emerged that web portal Sohu (Nasdaq: SOHU) was looking to sell its Sogou search engine, it appears a sale may finally be imminent to security software maker Qihoo 360 (NYSE: QIHU). If indeed the latest reports are true, the big winner from such a sale would be Qihoo, which would combine its own so.com search service with Sogou to create a major new player with a quarter of China’s search market. China tech watchers like myself will also be happy to see this story finally disappear from the headlines, following a non-stop string of mixed signals since early May from Sohu’s fickle and frustrated founder and Chairman Charles Zhang. Read Full Post…
I don’t usually consider myself paranoid, but the rapid acceleration in Beijing-led probes against foreign firms seems to be hinting at a wave of growing anti-foreign sentiment that could bode poorly for multinationals in China in the months ahead. That’s my assessment following news of the latest probe against European drug giant GlaxoSmithKline (London: GSK) for allegedly giving out bribes. Such periodic waves of backlash against foreign firms used to be common in China, and usually followed periods of openness and rapid expansion. In this case, I suspect this latest crackdown could also be designed to divert attention from China’s sudden economic slowdown, which has left many average Chinese suddenly feeling uneasy about the future. Read Full Post…
The exodus of Chinese tech firms from New York stock exchanges continues at a steady pace, with cellphone chip maker Spreadtrum (Nasdaq: SPRD) announcing a sweetened buyout offer and online entertainment firm Shanda indefinitely delaying its IPO plans. These latest moves reflect not only the chilly US investor climate towards Chinese firms, but also the fact that many of these firms have become attractive buyout targets due to their low valuations. As a result, we could see some interesting bidding wars emerge in the weeks ahead for a few of the companies that have already received buyout offers. Read Full Post…
The headlines have been buzzing these last few days with news on Internet giant Tencent (HKEx: 700) and its WeChat mobile messaging service, which has become the company’s hottest new product but is still looking for ways to make money. The most interesting rumor, which appears to be false, had Tencent in talks to purchase a controlling stake of leading online travel agent Ctrip (Nasdaq: CTRP). Meantime, other media are reporting that WeChat’s international expansion is accelerating, and that Tencent is quietly testing out a new mobile gaming platform for the service. Read Full Post…
It happened in 2011, but the sudden collapse of financial services firm Longtop Financial more than 2 years ago is still in the news as the US securities regulator tries to determine what caused the crisis that sparked a prolonged winter for US-listed Chinese stocks. While Longtop itself became the first victim of that crisis long ago, the next big victim could soon be the company’s auditor, the China affiliate of global accounting giant Deloitte Touche Tohmatsu. A final showdown on that front could be coming soon, following word that the US Securities and Exchange Commission (SEC) has finally gained access to auditing records that are most likely related to the Longtop case. Read Full Post…
