As a high-tech writer, I’ve been chronicling the story of Internet-based car services like Uber and Didi Kuaidi in China for the last 2 years and how they’re shaking up a market that was dominated for decades by stodgy taxi companies. But an experience this past week here in Shanghai made me realize just how revolutionary these services have become, and more broadly how the Internet is shaking up and democratizing many traditional industries.
My moment of insight came during a field trip with some students to the Lujiazui financial district, which has become a standard part of the financial journalism course I teach at a local university. I made the trip as usual trip by subway, and met my students at one of the many high-rise office towers for our tour of a local news agency. Read Full Post…
The following press releases and media reports about Chinese companies were carried on June 30. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════
Wanda Cinema (Shenzhen: 002739) to Raise 2.2 Bln Yuan for 16 Purchases (Chinese article)
Legend Holdings (HKEx: 3396) Edges up in HK Debut After $1.96 Bln IPO (English article)
Didi Kuaidi Operator to Invest in Southeast Asian Taxi App ‘GrabTaxi’ – Source (English article)
KongZhong (Nasdaq: KZ) Receives Proposal to Acquire the Company (PRNewswire)
Putian Hospital Association Restarts Ad Buying on Baidu (Nasdaq: BIDU)
Bottom line: LeTV’s purchase of a major stake in Coolpad is likely to upset Coolpad’s existing alliance with Qihoo, and could lead to a turbulent period that could ultimately see one of the alliances terminated.
LeTV buys into Coolpad
The battle for supremacy in China’s crowded smartphone space has just taken a strange twist, with word that online video superstar LeTV (Shenzhen: 300104) has purchased a major stake in domestic manufacturer Coolpad (HKEx: 2369). This particular move was quite unexpected, as I had written just last week that software security specialist Qihoo 360 (NYSE: QIHU) was the most likely candidate to purchase a stake in Coolpad being sold by the company’s largest shareholder, Data Dreamland.
Coolpad was once one of China’s hottest homegrown smartphone makers, but intense competition drove it to form a joint venture late last year with Qihoo, which contributed $420 million in much-needed cash for its stake in the venture. That led me to believe that Qihoo could make a bid to invest directly in Coolpad and perhaps eventually buy the company outright after Data Dreamland last week announced its intent to sell some or all of its 38.3 percent stake in Coolpad. (previous post) Read Full Post…
Bottom line: A probable correction in China’s stock markets could cause Tongcheng to abandon its decision to list at home, and lead to a weak debut for Legend Holdings’ Hong Kong IPO.
Toncheng eyes China IPO
When the history books are written, the latest batch of IPO news could well mark the end of a brief but unusually buoyant period that has seen many Chinese companies eschew overseas stock markets for listings at home. Leading off the news was a sizzling performance by securities brokerage Guotai Junan (Shanghai: 601211) on its trading debut in Shanghai, as it become China’s biggest domestic IPO since 2010.
Another piece of IPO news also cast a spotlight on the hot Chinese stock markets, as online travel site Tongcheng said it was eying a listing at home in the next year, in a snub to New York where most of its peers are traded. Last but not least, the lukewarm reception for Chinese listings abroad was reinforced by Legend Holdings, parent of PC giant Lenovo (HKEx: 992), which failed to attract any major international investors as it priced its Hong Kong IPO. Read Full Post…
Bottom line: Alibaba will mount an intense campaign in Washington over the next 6 months in a bid to avoid major embarrassment if its name appears on a widely watched list of global Internet companies that don’t do enough to fight piracy.
Volume grows in Alibaba anti-piracy drive
Just weeks after hiring a major lobbyist to convince Washington it’s serious about fighting piracy, e-commerce leader Alibaba (NYSE: BABA) is turning up the volume in its campaign with a couple of new announcements about its commitment to combating the problem. The latest of those has seen Alibaba jointly issue an announcement with the Washington-based International AntiCounterfeiting Coalition, reaffirming an earlier tie-up aimed at stamping out the selling of fake products in Alibaba’s popular e-commerce marketplaces.
The other announcement came earlier in the week, and saw Alibaba announce it was strengthening its cooperation with a Chinese organization that fights online copyright infringement. Unfortunately for Alibaba, no one paid too much attention to these 2 announcements, with the result that its renewed anti-piracy blitz wasn’t publicized too much in mainstream media. Read Full Post…
The following press releases and media reports about Chinese companies were carried on June 27-29. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════
Guotai Junan (Shanghai: 601211) Soars in Debut As China’s Biggest IPO Since 2010 (English article)
Bottom line: Qihoo is likely to soon take control of Coolpad by buying shares from its controlling stakeholder, while allegations of insider trading surrounding Qihoo’s recent buyout bid are unlikely to affect the company.
Qihoo eying Coolpad stake?
Security software specialist Qihoo 360 (NYSE: QIHU) is in a couple of noteworthy headlines as we end the week, led by an announcement that hints it could be close to buying a sizable stake in its smartphone partner Coolpad (HKEx: 2369). At the same time, Qihoo’s name has appeared in another headline that says a Guangzhou man is being accused of insider trading related to a plan announced last week to take the company private.
These 2 headlines aren’t really too related beyond the fact that they both involve Qihoo, whose aggressive business tactics and outspoken CEO have made the company a lighting rod for controversy. The Coolpad news reflects Qihoo’s recent aggressive push into smartphones, mirroring similar actions by many other Chinese Internet firms. The insider trading news is more reflective of China in general, where such dealing is rampant and largely tolerated by a securities regulator that has other larger issues on its agenda. Read Full Post…
Bottom line: Chinese Internet blue chips like Baidu and Ctrip should continue to flourish on Wall Street due to their leading status, while shares of smaller names will sputter and even plunge if a recent wave of buyout offers starts to collapse.
Baidu in $1.25 bln bond offer
The last 2 days have been most notable for what hasn’t happened over that time, namely the announcement of any new buyout offers for US-listed Chinese companies. Barring any new announcements on this final day of the trading week, the second quarter of 2015 is likely to end with a record 20 such privatization bids for Chinese firms looking to de-list from New York in search of better valuations back in China.
At the same time, 2 of China’s premier US-listed Internet companies are on the cusp of issuing a combined total of nearly $2.5 billion in new bonds, reflecting a new reality for Chinese companies on Wall Street. That reality is allowing China’s leading Internet names like search giant Baidu (Nasdaq: BIDU) and top online travel agent Ctrip (Nasdaq: CTRP) to still do quite well in New York, even as the far bigger number of lesser-known companies see their shares sputter. Read Full Post…
Bottom line: LeTV’s shares are probably overvalued despite a recent sell-off, but the company still looks like a good long-term bet despite allegations that it may overstate some of its sales and financial data.
LeTV shares hit turbulence
Online video superstar LeTV (Shenzhen: 300104) is quickly learning the lessons of gravity, as its formerly surging shares have suddenly shifted into reverse amid claims of unusual accounting and a big share sale by its CEO. Anyone who has owned the stock over the last 52 weeks is still doing quite nicely, with the shares more than double from a year ago at their current price level.
But anyone who bought LeTV shares amid a wave of euphoria that began in April might be doing less well. That wave saw the shares more than double in just a month’s time, making the company the undisputed leader in China’s online video space, well ahead of former leader Youku Tudou (NYSE: YOKU). But since reaching a peak in May the shares have lost about a third of their value, and it’s quite possible we could see quite a bit of downside ahead for this overinflated stock. Read Full Post…
The following press releases and media reports about Chinese companies were carried on June 26. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════
China Reinsurance Group Said to Pick Sponsors for $2 Bln HK IPO (English article)
Wanda Plans to Invest in Travel Site Tongcheng (Chinese article)
Bottom line: Suning’s Japanese expansion and receipt of a new license to build and operate a private broadband network are both positive developments, but also reflect a lack of quick progress in transforming its core China-based retail business.
Suning in Japanese expansion
A couple of new reports involving Suning (Shenzhen: 002024) made me realize it’s been quite a while since I’ve written about this company that is trying to transform from a traditional retailer to a major e-commerce player. Both reports are interesting and noteworthy, though neither is related to its e-commerce drive, which doesn’t appear to be going anywhere quickly.
One of the deals involves Suning’s purchase of a money-losing Japanese electronics seller 5 years ago, and will see it now plow several billion yuan into a major expansion of the Laox chain of home appliance stores. The second deal has Suning named as one of 4 companies to receive licenses to build broadband networks to offer services under a newly announced pilot program to open the sector to private money. Read Full Post…
