The following press releases and media reports about Chinese companies were carried on July 3. To view a full article or story, click on the link next to the headline.
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iQiyi, Ant Financial Picked to Make First IPOs on New Strategic Industries Board (Chinese article)
Alibaba (NYSE: BABA) Said in Talks for More Seattle-Area Office Space (English article)
Xiaomi Sold 34.7 Mln Smartphones In H1 2015, Up 33 Pct Year-On-Year (English article)
China Unicom (HKEx: 763) Makes 4G Service Available to MVNOs (Chinese article)
Qunar (Nasdaq: QUNR) Receives Final Judgment in Its Dispute With eLong (GlobeNewswire)
Bottom line: Didi Kuaidi is likely to launch service in the US next year, while Uber’s decision to spin off its China operations shows its commitment to the market, as the rivalry between the pair intensifies.
Didi Kuaidi eyes US
A major global rivalry is shaping up between US hired car services pioneer Uber and its Chinese alter ego Didi Kuaidi, which both have extremely strong backing and are attracting billions of dollars in new funding. Just days after Didi Kuaidi was reportedly on the cusp of raising up to $2 billion in new money, media are now reporting the Chinese company has quietly begun hiring in the US for a move onto Uber’s home turf.
At the same time, Uber’s aggressive CEO Travis Kalanick has been quoted saying he’s planning to spin off his China business into a separate company. That move would be unique for Uber in its global strategy so far, and is aimed at better challenging Didi Kuaidi on its home turf. Uber also hopes the plan will allow it to respond more rapidly in a market that’s both extremely lucrative but also quite unique and challenging. Read Full Post…
Bottom line: Xiaomi’s hiring of a new CFO and entry to Brazil are its latest steps in a gradual transformation to a more western-style global company, in preparation for an IPO that is at least 2 years away.
Xiaomi to launch next week in Brazil
Stumbling smartphone sensation Xiaomi is back to doing what it knows best, namely making headlines with the latest moves in its global expansion and by hiring executives from other high-profile companies. In this case the smartphone high-flyer has just announced its formal plan to enter Brazil, putting it squarely in 3 of the 5 BRICS countries after India and China. The other move looks a bit scripted, and will see a top China executive from Russian high-tech investor Digital Sky Technologies (DST) join Xiaomi as CFO.
The latter piece of news looks slightly strange because DST is one of Xiaomi’s investors, and it would be unusual to do something hostile like stealing a top executive from one of your big backers. Instead, this looks more like a planned move that is relatively common in this kind of situation, which sees big investors supply executives to the companies they back in preparation for eventual IPOs. Read Full Post…
Bottom line: Resolution of Baidu‘s dispute with a one of its top clients, combined with declining profits, reflects a new reality that is seeing its pricing power erode as it faces growing competition from both search and non-search service providers.
Exec confirms Baidu settles Putian dispute
A new report is confirming that leading search engineBaidu (Nasdaq: BIDU) has quietly settled a dispute with one of its major advertisers, which shaved nearly 15 percent off the company’s stock at the time. But the dispute is clearly have some lasting damage on Baidu’s share price, reflecting the reality that new challenges from rival search engines and also from non-search services like Tencent’s (HKEx: 700) WeChat may be undercutting Baidu’s ability to command huge premiums for its advertising services.
Baidu’s misery in China’s stock Markets
Adding to Baidu’s misery is the recent plummet in China’s stock markets, which has fueled a concurrent drop in overseas-listed Chinese tech stocks like Baidu. That sell-off saw Baidu’s shares dip more than 5 percent in the last 3 trading days of last week. That fall shaved off nearly $4 billion from its market value, as its shares reapproached levels last seen during the stand-off with the Putian Healthcare Industry Chamber of Commerce that broke out in late March. Read Full Post…
The following press releases and media reports about Chinese companies were carried on July 2. To view a full article or story, click on the link next to the headline.
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Didi Kuaidi Gets Set to Enter US, Challenge Uber – Source (Chinese article)
Former DST China Partner Shou Zi Chew Joins Xiaomi as CFO (English article)
China’s Gamers Aren’t Buying Many Consoles (English article)
TCL (Shenzhen: 000100) Prepares 795 Mln Yuan Share Buy-Back Program (Chinese article)
Bottom line: Yingli’s use of crowd-funding to finance a small project and the bargain sale price of a small polysilicon maker reflect continuing struggles at second-tier solar companies and the need for more consolidation.
Desperate Yingli tries crowd funding
Two solar energy stories are showing how overcapacity continues to haunt the sector 2 years after it began to emerge from a major downturn. The first involves a desperate-looking fund-raising plan from the struggling Yingli (NYSE: YGE), which is trying to use crowd funding to pay for a new solar plant. The other news involves another slightly bizarre investment in the space, with Internet titan Tencent (HKEx: 700) and real estate giant Evergrande (HKEx: 3333) paying a bargain price for Mascotte (HKEx: 136), a money-losing Taiwanese maker of polysilicon, the main ingredient used to make solar panels. Read Full Post…
Bottom line: Alibaba’s boosting of its stake in a leading Indian e-payments firm is part of a broader strategy that aims to replicate its China success in India through a series of acquisitions, and looks relatively well conceived.
Alibaba eyes new India investment
Just a week after abruptly pulling out of a major US investment, e-commerce giant Alibaba (NYSE: BABA) is increasingly focusing on India as the first major stop on its global expansion, with word that it’s in talks for a major new investment in a local e-payments firm. The new investment in Paytm, which would be worth about $600 million, is just the latest in a growing string of similar Indian acquisitions for Alibaba as it tries to replicate its success in China in overseas markets.
From a strategic perspective, India looks like a smart bet for Alibaba. The Indian market shares many characteristics with China, including the lack of a mature western-style retail industry from the pre-Internet era. As a result, a far bigger percentage of people in these markets are more likely to shop online. What’s more, the Indian retail market is relatively less competitive than western markets, and is experiencing rapid growth. Read Full Post…
Bottom line: China needs to let traditional banks behave more independently and encourage them to take risks, or risk seeing them overtaken by private, entrepreneurial financial companies.
Alibaba bank goes online
China’s 2 leading e-commerce companies were in the headlines last week with major new moves in the financial services sector, continuing a trend that has seen private firms pose the first serious challenge in decades to China’s banking establishment. One move saw Alibaba (NYSE: BABA) launch its online bank, MYbank, as part of a Beijing pilot program to allow private companies into the sector. The other saw JD.com (Nasdaq: JD) form a credit scoring joint venture, aiming to tap its huge volumes of transaction data to help rate the creditworthiness of individuals. Read Full Post…
The following press releases and media reports about Chinese companies were carried on July 1. To view a full article or story, click on the link next to the headline.
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Alibaba (NYSE: BABA) Eyes $600 Mln Investment in India Online Payment Firm Paytm (Chinese article)
Baidu (Nasdaq: BIDU0 to Invest 20 Bln Yuan in Nuomi.com Over Next 3 Years (English article)
KFC (NYSE: YUM) Forms Alliance With Alipay (Chinese article)
Yingli (NYSE: YGE) Seeks Public Solar Investment With Internet Financing Platform (PRNewswire)
Amazon (Nasdaq: AMZN) to Offer Loans to Sellers in China, 7 Other Countries (English article)
Bottom line: Didi Kuaidi could rise over the next 1-2 years to challenge Uber, as it embarks on a global expansion starting in Southeast Asia, fueled by billions of dollars in new investment.
Didi Kuaidi, Uber race for new funds
China’s homegrown version of global hired car services giant Uber continues to race ahead, with word that Didi Kuaidi is on the cusp of a new fund-raising that’s similar in size to the many recent amounts raised by its larger US cousin. At the same time, we’re seeing the earliest signals that Didi Kuaidi may be getting read to challenge Uber outside of China, with separate reports saying the former is in talks for a major investment in a major Southeast Asian taxi app operator.
The market for hired car service apps seems to change almost daily, with hardly a week passing without the announcement of a major new milestone or conflict between these aggressive companies and traditional taxi drivers. Uber is a good example, hitting speed bumps with government raids of 2 of its Chinese offices earlier this year, only to disclose it had no intention of leaving the market and was preparing to invest $1 billion in China this year alone. (previous post) Read Full Post…
Bottom line: The current fund-raising frenzy reflected in a recent round of buyouts for US-listed Chinese companies and large IPOs like the one for Legend Holdings is likely to quickly fizzle if China’s stock market sell-off continues.
KongZhong gets buyout offer
The China fund-raising machine has continued to rumble ahead despite the recent stock market sell-off in Shanghai, with yet another privatization offer coming for a New York-listed firm and a lethargic but respectable debut for newly listed Legend Holdings (HKEx: 3396). The former item saw shares of game operator KongZhong (Nasdaq: KZ) jump after receiving a buyout offer, even as most New York-listed Chinese shares slumped in line with the big sell-off in Shanghai. The latter item saw Legend shares finish down slightly in their Hong Kong trading debut, which doesn’t sound too exciting but was still far better than the 3.3 percent decline of the Shanghai benchmark index. Read Full Post…
