My relationship with medical care in Shanghai has undergone a major transformation since I first arrived in the city to live more than 4 years ago. What began as feelings of fear at the mere thought of a doctor visit, mostly due to the crowds and long waits, has evolved into a much more sanguine relationship where I no longer dread such trips.
The turning point for me is quite clear, and came about 2 years ago when I discovered the mini-hospital at the university where I teach, which would probably be called a large clinic in the United States. Such clinics are quite common in the US, usually staffed with anywhere from a single physician to small groups of doctors, and are at the center of new Shanghai initiative to make getting medical care easier and more affordable for everyone in the city. Read Full Post…
The following press releases and media reports about Chinese companies were carried on July 15. To view a full article or story, click on the link next to the headline.
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Yum’s (NYSE: YUM) Sales Miss Projections After Slump Persists in China (English article)
Bottom line: Tsinghua Unigroup’s bid for Micron could move it towards a goal of becoming China’s first world-class IT products and services provider, though it could face potential rival bids and objections from Washington.
Unigroup makes bid for Micron
After puttering around with a few high-profile deals in $1 billion neighborhood, Tsinghua Unigroup has suddenly turned up the volume in its drive to assemble a Chinese IT giant with a massive $23 billion bid for US memory giant Micron (Nasdaq: MU). I’ll be the first to admit I didn’t see this particular deal coming, and I have some doubts about whether it will actually close due to its large size and also potential political sensitivities.
But Unigroup, which has already formed telecoms technology deals with US tech giants Intel (Nasdaq: INTC) and Hewlett-Packard (NYSE: HPQ), has certainly shown it’s serious about try to assemble a major IT products and services provider. China is currently one of the world’s top consumers of such products, which power most of the world’s electronics and internal company networks. But despite that position, the country has yet to produce a company that can compete with such global giants as Qualcomm (Nasdaq: QCOM) in the chip space, and IBM (NYSE: IBM) in IT services. Read Full Post…
Bottom line: Xiaomi’s and Wanda’s moves into financial services look logical but a bit late, and could struggle to compete with earlier initiatives from the likes of Alibaba, Tencent and Baidu.
Xiaomi joins partners in new bank plan
With just about all the major Internet players moving into financial services, it’s been somewhat surprising that smartphone sensation Xiaomi hasn’t joined the trend yet. The same can be said for Wanda Group, which is moving beyond its traditional strength in real estate with plans for a major e-commerce venture and plays in the entertainment space.
That looks set to change soon, however, with separate reports saying both Xiaomi and Wanda are planning moves into China’s financial sector that is being opened to private money after years of domination by big state-owned companies. Xiaomi’s move comes in an announcement from an obscure company called Hebang Corp (Shanghai: 603077), which says the pair are part of a group that plans to open a privately funded bank. Meantime, Wanda’s plan comes in a report citing company chief Wang Jianlin saying he is planning to make some major purchases in the financial services arena. Read Full Post…
Bottom line: Chinese companies should follow the lead of Huawei, Baidu and Tencent in fighting internal corruption, but Beijing should also play a role by ensuring such probes don’t become a weapon for companies to attack each other.
Tencent corruption probe nets former video exec
The growing clampdown on corruption at private Chinese companies was in the headlines last week, when Internet giant Tencent (HKEx: 700) disclosed that it was investigating half a dozen employees suspected of accepting bribes. But unlike other similar probes that have been growing in number over the last year, this particular one involved former Tencent employees, including one now working as a top executive for Internet rival Alibaba (NSYE: BABA).
Such corruption and other economic crimes have no place in a healthy corporate landscape, and leading Chinese high-tech names like Huawei, Baidu (Nasdaq: BIDU) and now Tencent should be commended for their efforts to stamp out the problem. But Tencent’s targeting of a high-level employee who went to work for a rival is also slightly troublesome, as it shows that companies could use such probes as a weapon to punish workers who defect to their competitors. Read Full Post…
The following press releases and media reports about Chinese companies were carried on July 14. To view a full article or story, click on the link next to the headline.
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Chip Maker Tsinghua Unigroup Makes $23 Bln Bid for Micron (NYSE: MU) (English article)
Billionaire Wang Plans for Wanda to Expand Into Finance Industry (English article)
Xiaomi, Partners Planning to Open Privately Funded Bank? (Chinese article)
Bottom line: Jin Jiang’s purchase of a large Chinese hotel operator reflects its ambitions to become a leading player in China’s slowing market, though it could be undermined by its roots as a state-run company.
Jin Jiang to take control of Plateno
We’re finally seeing some big consolidation start to happen in China’s crowded hotel industry, with reports that Shanghai-based operator Jin Jiang (HKEx: 2006; Shanghai: 600754) is near a deal to buy the parent of formerly New York-listed 7 Days. The move comes just 7 months after Jin Jiang made another major purchase in Europe, and signals the company is clearly becoming a player to watch in China’s lodging space.
China’s hotel industry is undergoing some major changes right now, as the market suffers from oversupply created during a major build-up in the first decade of the 21st century. Leading player Homeinns (Nasdaq: HMIN) is in the process of privatizing after its stock languished on Wall Street due to lackluster growth prospects. China Lodging Group (Nasdaq: HTHT), operator of the Hanting chain, also made a major move late last year when it announced a major tie-up with French hotel giant Accor (Paris: AC). (previous post) Read Full Post…
Bottom line: Baidu’s new $200 million investment in its take-out dining service is likely to be followed by a sale of the platform to its Nuomi group buying unit, as part of its effort to build up an O2O company to compete with Dianping.
Baidu pumps up take-out dining site
Online search leader Baidu (Nasdaq: BIDU) continues to play catch-up to leading group buying sites Meituan and Dianping, with word that it’s investing a fresh $200 million in its young Internet-based take-out dining service. The move comes just weeks after e-commerce leader Alibaba (NYSE: BABA) announced a similar move to boost its own take-out delivery service, and as Tencent-backed (HKEx: 700) Dianping boosts its own early lead in the space through its Ele.me take-out delivery unit.
All of these companies are scrambling to build up their online-to-offline (O2O) businesses, which bring together Internet-based platforms for services like ordering food and merchandise, with real-world retailers like restaurants and department stores. Tencent is clearly placing its O2O bets with Dianping, which began life as a restaurant ratings site but has moved into a growing number of related areas like group buying and take-out delivery. Read Full Post…
Bottom line: Alibaba-affiliated Ant Financial is experiencing breakneck growth through its roll-out of a wide array of new products and services, and could be valued at up to $150 billion by the time it makes its IPO as soon as next year.
Ant Financial in Alipay offline campaign
A new report is spotlighting the rapid rise of Ant Financial, the financial services affiliate of e-commerce giant Alibaba (NYSE: BABA) that looks set to challenge not only domestic rival UnionPay but also upcoming drives into China by global giants Visa (NYSE: V) and MasterCard (NYSE: MA). Much of Ant’s incredibly rapid rise is tied to its core Alipay asset, which began life as an electronic payments service but is rapidly moving into other areas like credit card-style offline payments and savings account services.
The latest reports also contain a new figure on Ant’s valuation following its first major capital raising. That figure of $45 billion is substantially larger than an earlier figure of $30 billion that was contained in initial reports on the funding just a week ago. (previous post) But those earlier reports also pointed out the low valuation was based on shares that were probably sold at a discount to a big domestic institutional investor, perhaps for strategic reasons, and that the real value could be as high as $50 billion. Read Full Post…
The following press releases and media reports about Chinese companies were carried on July 11. To view a full article or story, click on the link next to the headline.
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Jin Jiang (Shanghai: 600754) Prepares to Acquire Hotel Operator Plateno (Chinese article)
Great Wall Motor Seeks Up to $2.7 Billion for New-Energy Cars (English article)
Baidu (Nasdaq: BIDU) Take-Out Delivery Unit Gets $200 Mln Funding, Plans Spin-Off (Chinese article)
Partner of Alibaba (NYSE: BABA) Arm Said to Plan New Fundraising Round (English article)
Jiayuan (Nasdaq: DATE) Still Moving Ahead With Privatization – CEO Email (Chinese article)
Bottom line: The detention on suspicion of corruption of a former Tencent executive now working at Alibaba shows that Chinese Internet companies could use such internal probes to disrupt business at their rivals.
Former Tencent worker detained for corruption
Chinese tech companies are getting increasingly aggressive in their campaign to root out internal corruption, with word that Tencent (HKEx: 700) is probing current and former employees from its video unit for accepting bribes. But what’s most interesting about this latest anti-corruption drive is that one of the executives detained by police now works at the entertainment unit of Tencent rival Alibaba (NYSE: BABA). That element of the case reflects the fact that executives at China’s leading Internet companies often move between each other, in a job-hopping phenomenon that is relatively common in China.
But the move also reveals a potentially potent weapon that companies like Tencent could use in the future to try and disrupt business at their rivals. We saw a similar case just last year, when online game giant NetEase (Nasdaq: NTES) made allegations against one of its former employees who left to start social networking app Momo (Nasdaq: MOMO), causing major headaches for Momo on the eve of its New York IPO. Read Full Post…
