Bottom line: HNA’s potential bid for 2 South American airlines looks opportunistic and could succeed due to its likely willingness to overpay, while Jin Jiang’s latest attempt to boost its stake in Accor could presage a takeover bid this year or next.
HNA eyes South American airlines
Two major tourism deals are in the headlines as the new week begins, reflecting Chinese companies’ desire to capitalize on the growing number of local tourists traveling abroad. Leading the news is word that Hainan Airlines (Shanghai: 600221) parent HNA Group is in talks to purchase South American carrier Avianca, just a week after the company made another major investment in Australian carrier Virgin Australia (Sydney: VBA). (previous post) The other headline has hotel company Jin Jiang (HKEx: 2006; Shanghai: 600754) trying to slowly take control of French giant Accor (Paris: AC), with word it wants to further boost a stake that it started buying early this year. Read Full Post…
Bottom line: European alarmism could soon start to grow over a sudden Chinese buying spree of local soccer clubs, including the latest purchase of Inter Milan by Suning and a looming purchase of AC Milan by a Chinese buyer.
Suning bounces into Milan
The new week is kicking off with a couple of China soccer deals in Europe, led by the purchase of a majority of Italy’s Inter Milan by consumer giant Suning (Shenzhen: 002024), and buzz that another deal is near that would see crosstown rival AC Milan sold to a Chinese buyer. This kind of news is becoming quite common these days, following other recent deals that have seen Chinese companies buy or purchase stakes in soccer clubs and other sporting assets in Spain, Britain, Switzerland and even New York. All of which raises the question of if and when Europeans might start to feel uneasy about this sudden buying binge of so many assets from their favorite past-time. Read Full Post…
Bottom line: HNA’s Virgin Australia investment reflects its aspirations to build a global travel empire, while ICBC’s new European infrastructure fund reflects its attempts to be commercial while also supporting central government initiatives.
HNA invests in Virgin Australia
A couple of headlines are spotlighting the different approaches of 2 of China’s leading global investors, led by a big new investment in airline Virgin Australia (Sydney: VBA) by HNA Group. On the other side of the globe, ICBC (HKEx: 1398; Shanghai: 601398) is establishing a major new European infrastructure fund, in what looks like a far more politically-motivated move by China’s leading lender. Both investments reflect China’s growing role on the global investing stage, though each represents the rapidly diverging priorities between the state-run and private sectors. Read Full Post…
Bottom line: Wanda’s intellectual property clash with Disney is a minor glitch in its big theme park aspirations, but highlights the many difficulties the multibillion-dollar initiative will face.
Wanda, Disney tussle over IP infringement
After days of trash-talking global theme park giant Disney (NYSE: DIS), Chinese entertainment aspirant Wanda is suddenly on the defensive after a Disney character was spotted greeting visitors in its newly launched Wanda City mega-entertainment complex in the interior city of Nanchang. The bigger context to this story is that Wanda desperately wants to attract attention to its new plans to build more than a dozen theme parks, many costing more than $1 billion, in its bid to become China’s own homegrown Disney. But Wanda has discovered that publicizing its plans isn’t quite as easy as it thought, even as media feast on the grand opening in 2 weeks of China’s first Disneyland resort in Shanghai. Read Full Post…
Bottom line: Dalian Wanda’s de-listing plan from Hong Kong is likely to succeed, while eLong could re-list in China and become the travel services provider for WeChat following its New York privatization.
Dalian Wanda joins homeward migration
A trio of new headlines are part of the recent homeward migration of offshore-listed Chinese companies, led by a highly anticipated $4.4 billion offer to privatize property giant Dalian Wanda (HKEx: 3699). Also making news is faded online travel agent eLong (Nasdaq: LONG), whose shareholders have just approved a privatization that will soon end its 12-year-old listing in New York. Finally there’s film production house Yongle Film and Television, which would have been a strong New York IPO candidate in a earlier era but is now in the process of making a backdoor listing in Shenzhen. Read Full Post…
Bottom line: BOC Aviation’s stock will debut with a 5-10 percent gain when trading starts on Wednesday, while Lufax’s delay of its IPO plan looks prudent until China’s P2P lending sector settles down.
BOC Aviation set for strong debut
After running into some early minor turbulence, Asia’s second biggest IPO of the year is set to take off later this week in Hong Kong when aircraft leasing company BOC Aviation begins trading in what should be a relatively buoyant debut. But the ride to market is looking a bit rockier for Lufax, with reports that what could become the first IPO for a P2P lender is being delayed until next year. Lufax had earlier signaled it planned to make its listing this year, most likely in Hong Kong or Shanghai. But its plan is being delayed as Beijing moves to clean up the nation’s unruly P2P lending market. Read Full Post…
Bottom line: Wanda’s recent theme park building spree looks aimed at challenging Disney, but many of its new resorts are likely to fail due to lack of experience and poor choice of locations.
Wanda breaks ground on new Guilin park
Watch out, Disney (NYSE: DIS). Chinese real estate giant Wanda Group has recently embarked on a global theme park building binge that would put Disney to shame, and certainly outpaces the US entertainment giant in terms of investment dollars. This month alone Wanda is getting set to open a multibillion-dollar park in the interior Chinese city of Jiangxi, and it has also just announced the ground-breaking for another mega-park in the scenic southern tourist city of Guilin. Then there’s its plans for a $3.3 billion park near Paris announced in February, which would be its first major overseas resort. Read Full Post…
Bottom line: Beijing regulators should take a more hands-off approach to outbound M&A by major institutional buyers like Anbang, and let them take more direct responsibility for their investment decisions.
Anbang targeting InnVest?
A new showdown could be brewing between Beijing and China’s newly minted field of outbound investors, as reports emerged last week that insurer Anbang was planning a major new Canadian acquisition less than 2 months after China’s insurance regulator reportedly vetoed a previous similar plan. The latest deal would see Anbang buy InnVest Real Estate Investment Trust (Toronto: INN-UN), one of Canada’s largest hotel owners, following its failed bid in March to buy US hotel giant Starwood (NYSE: HOT), operator of the Westin and Sheraton brands. Read Full Post…
Bottom line: Huge publicity around the new Shanghai Disneyland ensures it will rapidly become a major new profit center after it opens in June, but will also expose Disney to a wide range of mini scandals like one involving its high food prices.
Thousands flock to Shanghai Disney before opening
The hype is rapidly building as Disney (NYSE: DIS) gets set to launch its first theme park in more than a decade, attracting droves of visitors and also the first of what are likely to be many mini-scandals involving the $5.5 billion Shanghai resort. Leading the headlines is word that nearly 1 million people have already flocked to the areas outside the official park just to catch a glimpse of China’s first Disneyland from the outside.
The park has also been admitting smaller numbers of guests on a trial basis to sample the rides and other attractions in the run-up to the official June 16 opening. Some of those got indigestion from the high prices for food at restaurants in the park, leading to a mini-firestorm of criticism that Disney has quickly tried to control. Read Full Post…
Bottom line: A strong field of cornerstone investors indicates BOC Aviation’s IPO could post moderate gains in its trading debut, while Didi’s IPO plan shows that New York remains an attractive option for Chinese firms that are leaders in their sectors.
Fosun, Boeing buy into BOC Aviation
A couple of major IPOs are in the headlines today, led by some encouraging signs for an upcoming listing from BOC Aviation, the aircraft leasing arm of Bank of China (HKEx: 3988; Shanghai: 601398) that’s in the process of making a $1.1 billion offering in Hong Kong. Meantime, we’re getting some of the first concrete signals of the IPO plans for Didi Chuxing, the homegrown Chinese equivalent of Uber, which is reportedly eyeing a US listing in 2018.
Let’s jump right in with BOC Aviation, which looks like an attractive IPO to me since it should benefit from China’s booming demand for air travel. Yet despite that potential, the offer has stumbled somewhat since Bank of China first announced its plans to make a separate listing for the unit back in March. BOC Aviation was initially hoping to raise up to $1.5 billion, but pared the amount back to the current $1.1 billion after meeting with lukewarm demand due to recent market volatility. Read Full Post…
Bottom line: BOC Aviation and 51Talk are likely to post moderate performances in their upcoming IPOs in Hong Kong and New York, as investors welcome their growth stories but also show concerns about China’s broader slowing economy.
BOC Aviation IPO gets lukewarm reception
Privatizations and de-listings have been making headlines among overseas listed Chinese firms these days, but a couple of upcoming new IPOs shows that New York and Hong Kong remain attractive options for at least some companies. In the bigger of the 2 plans in the headlines today, Bank of China’s (HKEx: 3988; Shanghai: 601398) BOC Aviation unit has filed updated plans for its IPO first announced in March, which includes a final pricing. The other deal has English language instruction specialist 51Talk filing to make a New York IPO to raise up to $100 million.
This latest pair of deals in some ways reflect the constant state of uncertainty in China’s own stock markets, which is where many of these Chinese companies would prefer to list due to higher valuations. IPOs in China are always tough because of a huge waiting line that means new applicants can wait 2 or 3 years or even more. The problem is worsened by political conservatism that often sees the regulator slow or freeze all new offerings when markets become volatile like they are now. Read Full Post…
