Bottom line: Alibaba’s new hiring of a Washington insider to head its international government affairs reflects its attempts to look more global, and also an intense lobbying campaign to ensure its name stays off an annual US piracy list.
Alibaba bulks up in Washington
E-commerce giant Alibaba (NYSE: BABA) has just made a major new addition to its Washington lobbying team, as it gears up for what’s likely to become one of its biggest battles yet on Capitol Hill. That battle will see the company try to convince the Obama administration that it’s a strong partner in the battle against piracy, as it tries to stay off an annual list published by Washington that singles out major internet sites that don’t do enough to stamp out counterfeiting.
Alibaba’s new hire of former GE Capital executive Eric Pelletier to head its international government affairs is also part of its attempts to look more global by adding big-powered non-Chinese to its top management ranks. The move parallels similar hires by equally globally-minded companies including networking equipment giant Huawei and leading PC maker Lenovo (HKEx: 992), which are also trying to convince the world that they’re truly global players and not just Chinese companies. Read Full Post…
Bottom line: Google could open a Chinese version of its app store by the end of this year and spend aggressively to quickly gain market share, but would face negative backlash from western critics for its U-turn back into the sensitive market.
Google lobbies China smartphone makers to include Play Store
Global Internet giant Google (Nasdaq: GOOG) is reportedly eying a return to China, with plans to launch a Chinese version of its flagship Google Play app store. The move, if true, would mark a major flip-flop for Google, which withdrew its core search engine from China in 2010 after a high-profile spat over Beijing’s strict censorship policies. But as many similarly principled companies quickly discover, China is a market that is simply too big to ignore.
That quandary led top business networking site LinkedIn (NYSE: LNKD) to enter China last year, despite expressing its own reservations about censorship, and top social networking (SNS) site Facebook (Nasdaq: FB) is also lobbying strongly for such a move. Google’s latest campaign comes in a the slightly less sensitive area of app store operation, though even that business would involve some self-censorship to eliminate apps that Beijing might consider sensitive for political or other reasons. Read Full Post…
The following press releases and media reports about Chinese companies were carried on June 9. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════
Bottom line: The EU will impose anti-dumping tariffs on all Chinese solar panel makers by year end, and will refuse to negotiate any new agreements to mediate the issue unless Beijing becomes directly involved.
New EU tariffs on 3 Chinese panel makers
A crackdown has officially begun on Chinese solar panel makers who skirted a deal to avoid anti-dumping tariffs in Europe, with word that the EU has taken formal action to punish 3 violators. The action will see anti-dumping tariffs imposed on Canadian Solar (Nasdaq: CSIQ), ReneSola (NYSE: SOL) and ET Solar, reviving a threat they previously avoided by agreeing to voluntarily raise their prices as part of a breakthrough deal in late 2013.
Western solar panel makers in the US and Europe had long complained that they were at an unfair disadvantage to their Chinese peers, which received a wide array of state subsidies through policies like cheap government loans and tax rebates for their exports. Washington responded by levying anti-dumping tariffs on the Chinese companies, while the EU took a more conciliatory approach by signing a deal that saw the Chinese agree to voluntarily raise their prices to levels comparable with their western rivals. Read Full Post…
Bottom line: Wowo’s merger with a major food service B2B platform looks broadly positive, giving it a new business with better growth potential than its core group buying service.
Wowo in food transformation
Just 2 months after its delayed and underwhelming New York IPO, group buying site Wowo (Nasdaq: WOWO) is undergoing a radical transformation by merging with a B2B site used by the food service industry. Wowo, which until recently was known as 55Tuan, is billing this particular merger as a purchase of Join Me Group, or JMU, in a deal that it says will create China’s largest food service Internet company. But the reality is that Wowo appears to be the one getting swallowed up by the larger JMU in this deal, which would end its very brief life as China’s first publicly listed group buying site.
Investors who bought into Wowo’s April IPO thinking they were getting a group buying site similar to US leader Groupon (Nasdaq: GRPN) weren’t impressed by this sudden transformation, bidding Wowo shares down by 8.3 percent and another 4.5 percent in regular and after hours trade after the deal was announced. Still, it’s noteworthy that after the sell-off the shares were still at $10.50, or just a tad above their IPO price of $10. Before rumors of this deal first appeared, the shares had been trading well below the IPO price. Read Full Post…
As someone who has followed financial markets for years, I can say with authority that a daily stock market move of more than 1.5 percent is quite rare and most often happens when there’s big news. The last time we saw frequent movements bigger than that was during the global financial crisis of 2008, when it became almost surreal how often global stock markets would occasionally rise but more often fall by 3 percent or more.
Fast forward to present day China, where the big swings have returned and changes of 3 percent or more have become quite common in our daily stock market reports. One restaurant owner in Pudong thought he was pretty smart he created a promotion tied to stock market moves, offering different discounts depending on the size of the market’s rise or fall that day. Read Full Post…
The following press releases and media reports about Chinese companies were carried on June 6-8. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════
Three China Solar-Panel Groups Lose EU-Tariff Exemptions (English article)
China Resources Expands Vanguard Convenience Stores, Targets 6,300 by 2020 (Chinese article)
JA Solar (Nasdaq: JASO) Receives Going Private Proposal at $9.69 Per ADS (GlobeNewswire)
Lenovo (HKEx: 992) Parent Legend Gets HK Approval for up to $2 Bln IPO: Sources (English article)
WoWo (Nasdaq: WOWO), JMU to Merge, Creating Top Online Foodservice Firm (PRNewswire)
Bottom line: WH Group’s decision to sell its stake in Spain’s Campofrio just a year after the purchase reflects its need for cash to pay down a big debt load, and also overly optimistic expectations at the time of the acquisition.
WH Group sells Campofrio stake
Just a year after making its second major global acquisition, Chinese meat processing giant WH Group (HKEx: 288) is having second thoughts about Spain’s Campofrio and is selling its stake in the company. WH Group gave a brief statement on the move, which appears to show it needed the cash and that Campofio was dragging on its financial performance. If that’s the case, this unusually quick flip-flop reflects one of the biggest risks that Chinese companies will face as they shop in an unfamiliar global marketplace that is quite different from their own home market. Read Full Post…
Bottom line: The sale of new shares at a discount by Alibaba Pictures and Kingsoft reflects growing competition for funds in Hong Kong, while Mindray is likely to seek a China re-listing following its privatization from New York.
Kingsoft in fund-raising plan
A flurry of fund-raising activity on China’s periphery is in the headlines as we end the week, led by 2 separate plans by Alibaba’s (NYSE: BABA) film unit and software maker Kingsoft (HKEx: 3888) to raise a combined $2 billion. At the same time, medical device maker Mindray (NYSE: MR) has become the latest in a recent string of companies to receive buy-out offers, following years of lackluster performance for its New York-listed shares.
The underlying theme to these 3 stories is a huge stock market rally in China itself, which has seen the benchmark Shanghai index more than double over the last year. That rally is making companies like Mindray envious, prompting many to de-list from New York and target re-listings at home. At the same time, the China effect is also spilling over into adjacent Hong Kong, making it much easier for Chinese companies listed there to also raise new cash. Read Full Post…
Bottom line: Alibaba’s potential new venture to bring Japanese imports to China looks like a smart move that plays to Beijing’s desire to boost consumer spending, and could serve as a template for similar import-related tie-ups.
Alibaba talks tie-up with Yahoo Japan
A potential major new tie-up between Alibaba (NYSE: BABA) and Yahoo Japan (Tokyo: 4689) aimed at bringing more Japanese imports to China looks full of promise, providing a possible major new growth source for the Chinese e-commerce giant. Such a tie-up would be especially exciting because it would bring together 2 of the largest e-commerce companies from the world’s second and third largest economies. It would also receive strong support from Beijing, which is rapidly dismantling many import barriers as it tries to boost consumer spending to prop up a slowing Chinese economy. Read Full Post…
The following press releases and media reports about Chinese companies were carried on June 5. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════
Alibaba Pictures (HKEx: 1060) To Raise $1.6 Bln in Share Sale For Media Acquisitions (English article)
Mindray (NYSE: MR) Receives “Going Private” Proposal at $30.00 Per ADS (PRNewswire)
WH Group (HKEx: 288) Announces Sale of Campofrio Stake For $354 Mln (GlobeNewswire)
Supermarket and Consumer Electronics Chain Bubugao to Raise 3.4 Bln Yuan (English article)
WandaGroup E-Commerce CEO Resigns, Cites Personal Reasons (Chinese article)
