Bottom line: The purchase of Micron by Tsinghua Unigroup offers a good chance for Sino-US confidence building if Washington signals it will fairly consider such a deal and Unigroup demonstrates its actions are commercially driven.
Micron sale offers chance to boost Sino-US trust
A potential mega-deal that would see China’s Tsinghua Unigroup buy leading US memory chip maker Micron Technology (Nasdaq: MU) could become a major trust-building exercise between China and Washington if handled properly, but could also quickly end in an angry war of words if the opposite occurs. Both sides need to take important steps to ensure fair trade in the case, which is sensitive because it involves the acquisition of a US high-tech leader by a company with close ties to China’s top science university.
For its part, Unigroup could take steps to show its independence from Tsinghua University, and more broadly to show that it is a commercially-focused business that doesn’t make decisions based on government orders or support. For its part, Washington could signal it is willing to consider a deal that appears to pose no threat to national security, even though it would see a major technology company taken over by a Chinese peer. Read Full Post…
he following press releases and media reports about Chinese companies were carried on July 28. To view a full article or story, click on the link next to the headline.
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China Minsheng Investment to Acquire Sirius Int’l Insurance for $2.2 Bln (English article)
Bottom line: Baidu could buy a small stake in Xunlei but is unlikely to acquire the company outright as part of their new alliance, while 58.com’s plan to rebuild its newly acquired job site should have good chances of success.
58.com goes to work on ChinaHR
I’ve been predicting a marriage for a while for online video orphan Xunlei (Nasdaq: XNET), even as it remains stubbornly single despite its lack of scale to survive as an independent company. First it appeared the company might get bought by smartphone sensation Xiaomi after the pair boosted their strategic tie-up in May, but then nothing more happened. Now the gossip mills are likely to start turning again, following the latest announcement of a major partnership between Xunlei and Baidu’s (Nasdaq: BIDU) iQiyi online video service.
58.com
Meantime in another Internet news bit, the top executive at leading online classified ad site 58.com(NYSE: WUBA) is saying he will need 2 years to turn around the underperforming online job site ChinaHR, which he acquired earlier this year. His assessment comes after the site laid off nearly all of its staff as part of the deal that saw 58.com buy ChinaHR from its Irish owner. Read Full Post…
Bottom line: Second-quarter smartphone data confirms recent trends that have shown a surge for Huawei and Apple, while Lenovo and Samsung struggle and Xiaomi also faces rapidly slowing growth.
Huawei consolidates spot as world’s No 3 smartphone maker
The latest smartphone sales figures are out, showing a recent surge for Huawei and strong but slowing growth for Xiaomi, as Chinese brands continued to take 3 of the top 5 global spots. Meantime, the same chart shows the lackluster Lenovo (HKEx: 992) continued to stumble as it failed to find an audience for its products, and global leader Samsung (Seoul: 005930) also continues to struggle.
The latest second-quarter figures from IDC come as another smaller data tracking firm IHS Technology released its own numbers showing Xiaomi continued to rule the China roost and even boosted its share of the market. Meantime, Samsung continued to slip in the world’s biggest smartphone market, falling a notch to barely stay in the top 5 brands. Read Full Post…
he following press releases and media reports about Chinese companies were carried on July 25-27. To view a full article or story, click on the link next to the headline.
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China Brands Take 3 of Top 5 Spots For Q2 Global Smartphone Shipments – IDC (Chinese article)
Fosun (HKEx: 565) Offers to Buy BHF Kleinwort Benson for $545.5 Mln (English article)
58.com (NYSE: WUBA) to Spend 100 Mln Yuan to Revamp ChinaHR in 2 Years (Chinese article)
Alibaba’s (NYSE: BABA) Tmall Promotes Same-Day Grocery Delivery in China (Businesswire)
Xunlei (Nasdaq: XNET) Announces Strategic Partnership With iQiyi on Project Crystal (GlobeNewswire)
Bottom line: A special meeting between 8 Chinese government agencies is a positive sign for Uber and its rivals, indicating Beijing wants to forge a unified national policy to foster the development of hired car service operators.
Beijing meeting sends positive signal for Uber
The brash Uber and its rivals are seeing some encouraging signs in China, with reports that Beijing has convened a special meeting of 8 ministries to clearly define a national policy on these up-and-coming providers of hired car services. At the same time, Uber has broadened its stable of China partners by forming an alliance with homegrown smartphone sensation Xiaomi to promote their products and services in Southeast Asia. Lastly, Uber is also in a slightly troubling headline that spotlights some of risks it will face, as media in southern Guangdong province report that one of the company’s drivers may have been murdered by a customer. Read Full Post…
Bottom line: Internet-based financial services should continue to boom over the next few years, while a rapid decline in microblogging could start to ease now that Weibo has consolidated its position as market leader.
Weibo consolidates microblogging market
China’s Internet data tracker has just released a slew of figures for the first half of the year, painting a rosy picture for companies like Alibaba (NYSE: BABA) and others that are moving aggressively into online financial services. At the other end of the spectrum, microblogging continued its rapid decline, as marginal players retreated and industry leader Weibo (Nasdaq: WB) consolidated its position.
On a broader level, I was surprised to see the growth rate in overall Internet users slow sharply in the first half of this year, even as the number of people accessing the web over their mobile phones continued to post strong growth. I also took the time to tally up the subscriber totals for China’s big 3 telcos in the first half of the year, which shows that the dominant China Mobile (HKEx: 941; NYSE: CHL) gained share on its 2 smaller rivals as it aggressively promoted its year-old 4G service. Read Full Post…
Bottom line: WeChat’s recent blockage of Uber reflects challenges the US company will face from rival car service operators and their backers in China, providing yet another obstacle as it tries to build up its local business.
Uber locked out of WeChat
A colorful war of words has broken out in China over the last week between high-flying car services provider Uber and the popular instant messaging service WeChat, providing not only some good entertainment but also valuable lessons for foreign companies doing business on the Chinese Internet. In this instance, WeChat has been blocking keyword searches on Uber, meaning users of the popular mobile messaging service can no longer access Uber’s public account or any articles with the Uber name. WeChat has given its own explanation for the blockage, blaming it on technical issues. Of course it’s probably no coincidence that WeChat’s parent Tencent (HKEx: 700) is also a major backer of rival domestic car services provider Didi Kuaidi. Read Full Post…
The following press releases and media reports about Chinese companies were carried on July 24. To view a full article or story, click on the link next to the headline.
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Walmart (NYSE: WMT) Takes Full Ownership of Yihaodian Business in China (Businesswire)
China’s H1 2015 Mobile Internet User Base Hits 594 Mln (English article)
Tsinghua Holdings Chief Says Still in Micron (Nasdaq: MU) Talks, Hopeful on Deal (English article)
China Postal Savings Bank Seeks Strategic Investors in Run-Up to IPO (Chinese article)
Uber Partners With Xiaomi for Smartphone Sales in Singapore (English article)
Bottom line: China Mobile’s latest salary reduction plan underscores that it and its 2 peers are just big state-run companies that act on orders from Beijing, with little to differentiate them from one another.
China Mobile slashes salaries
I’ve become increasingly disenchanted with China’s big 3 state-run telcos, partly because they lack any kind of originality or inspiration. About the only thing they know how to do is heed the call of Beijing, or sometimes protest orders they don’t like. Another thing they’re good at is launching promotions to try to steal business from each other in their highly protected market. But no one will ever accuse any of the trio or originality or innovation.
With that introduction, I’ll be quite direct and say that the latest news that leading telco China Mobile (HKEx: 941; NYSE: CHL) plans to slash salaries company-wide is just the same old behavior in response to a central government directive. That kind of directive comes regularly from Beijing, which recently has grown frustrated at China Mobile and its 2 peers, China Telecom (HKEx: 728; NYSE: CHA) and China Unicom (HKEx: 762; NYSE: CHU), for failing to innovate despite their control of the world’s largest telecoms market. Read Full Post…
Bottom line: Mecox Lane’s privatization plan should succeed, but the company is likely to continue its decline even if it re-lists in China under its current lackluster management.
Mecox Lane gets buyout offer
The current privatization wave is giving me a chance to revisit some companies that I haven’t written about in quite a while such as former e-commerce superstar Mecox Lane (Nasdaq: MCOX), which has just become the latest name to receive a buyout offer. In a slightly surprising twist, Mecox Lane’s shares tanked after it made the announcement, losing more than 8 percent to close around 20 percent below the buyout offer price.
Mecox’s announcement is one of the smallest so far in terms of deal value, since the company only has a market value of about $40 million. That’s even less than the $63 million education specialist New Oriental (NYSE: EDU) will need to pay an unusual special dividend announced just a day earlier, in a move I interpreted as a signal that the company had no plans to join the exodus of Chinese companies from New York. (previous post) Read Full Post…
