Bottom line: A new anti-bribery probe against the medical device divisions at Siemens, GE and Philips will end with a quiet settlement, as China scales back a wave of probes that have raised complaints about discrimination against multinationals.
Foreign medical device makers fall under China microscope
Summer time is fast approaching, which means it’s time for China’s latest crackdown on foreign firms to start heating up. Such crackdowns are becoming an annual tradition, and have even developed a certain cyclicity that sees them begin in late spring, then reach a fever pitch in summer before fading in the fall. This year could continue that pattern, following reports that the medical device units of global conglomerates Siemens (Frankfurt: SEIGn), General Electric (NYSE: GE) and Philips (Amsterdam: PHG) are all being probed over whether they bribed hospitals and other medical professionals to achieve their current market dominance. Read Full Post…
The following press releases and media reports about Chinese companies were carried on May 8. To view a full article or story, click on the link next to the headline.
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Alibaba (NYSE: BABA) Names New CEO As Revenue Tops Views (English article)
58.com (NYSE: WUBA) To Acquire Online Recruitment Site ChinaHR – Report (English article)
Canadian Solar (Nasdaq: CSIQ) Signs $250 Mln Loan With Minsheng Bank (PRNewswire)
Chinese Authorities Visit Uber’s Chengdu Office (English article)
Chinese Real Estate Site Aiwujiwu Closes $120 Mln Series D Funding (English article)
Bottom line: A potential future spin-off of Yum’s China operations looks like a good move that would give the new company more focus, while McDonald’s China franchising drive also looks good if it can find the right partners.
Investors eye spin-off for Yum’s China unit
China was once the hot story for fast food companies like KFC and McDonald’s (NYSE: MCD), as Chinese consumers flocked to the concept of reasonably priced food that was served quickly in attractive restaurants with friendly workers. But that story has become quite stale in recent years, leading this pair of global heavyweights to look for new China stories to pump up their local business and excite investors.
KFC has been trying to achieve that goal through a major overhaul of its China restaurants over the past year, and now is back in the headlines as some investors call for its parent, Yum Brands (NYSE: YUM), to split off its China operations into a separate company. Meantime, McDonald’s is trying to bring some excitement back to its China story by rapidly accelerating the expansion of its traditional franchised store model in the market. Read Full Post…
Bottom line: 3 new $100 million fundings reflect the recent popularity for Chinese tech and media start-ups among investors, pushing valuations up to unrealistic levels for these young companies that operate in mostly niche areas.
E Daijia wins big new funding
I can remember a time not long ago when $100 million seemed like a huge figure for start-ups raising new funds, and such amounts were quite infrequent. But in today’s overheated Chinese tech world, that figure is in 3 separate headlines this week, including 2 involving the hot area of location-based services (LBS). That pair of items has ride-sharing app Dida Pinche and mobile chauffeur app E Daijia each reaching the coveted $100 million mark in their third and fourth funding rounds, respectively. Meantime, the new sports unit of fast-rising video superstar LeTV (Shenzhen: 300104) has also just won its own $100 million in new funding, reportedly from one of China’s richest men. Read Full Post…
Bottom line: Lenovo has done remarkably well since defying skeptics with its landmark IBM PC buy a decade ago, and could stand a 50-50 chance of remaining relevant a decade from now in the fast-changing world of high-tech gadgets.
Lenovo celebrates a decade since landmark IBM buy
Global PC leader Lenovo (HKEx: 992) is commending itself on how far it has come since its landmark purchase of IBM’s (NYSE: IBM) PC business 10 years ago, setting it on a path that has made it the world’s top computer seller. (company announcement) I’ll admit I was a skeptic at the time of the IBM deal in 2005, and have become much more bullish on Lenovo since then. Still, the company hasn’t completely convinced me that it has the necessary skill and vision to move past its global PC crown, which is fast becoming yesterday’s news as traditional computers rapidly lose ground to newer devices like smartphones and tablets.
Before I look at the challenges that Lenovo is facing, I want to start by personally congratulating the company on its huge accomplishments over the last decade since it announced it would purchase IBM’s storied PC business for $1.25 billion. I and many others predicted at the time that Lenovo could stumble badly with the move, since it had no experience at running such a major foreign business that was clearly in decline and need of restructuring. Read Full Post…
The following press releases and media reports about Chinese companies were carried on May 7. To view a full article or story, click on the link next to the headline.
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Third Point’s Loeb Not Pushing For Yum (NYSE: YUM) To Split Off China Business (English article)
Qihoo (NYSE: QIHU), Coolpad Unveil QiKU As Brand For Smartphone JV (Chinese article)
Mobile Ridesharing App Dida Pinche Wins $100 Mln Series C Funding (English article)
Trina (NYSE: TSL) Building $160 Mln Manufacturing Facility In Thailand (English article)
Bottom line: LeTV’s new smartphones should generate major buzz when they go on sale this weekend and could easily sell 1 million units in their first 3-4 months, challenging domestic “cool” incumbent Xiaomi.
LeTV takes pre-orders for new smartphones
Smartphone sensation Xiaomi has emerged as one of China’s hottest tech names in the last few years with its cool and trendy image, focusing its sights largely on global leaders Samsung (Seoul: 005930) and especially Apple (Nasdaq: AAPL) as it looks for a place on the global stage. But this globally-minded company could soon have to watch its back as well, with the recent meteoric rise of LeTV (Shenzhen: 300104) as the newest hipster in town.
LeTV went largely unnoticed for the first part of its life, when it was mostly an Internet-based provider of video content similar to YouTube. But it has zipped into the spotlight over the last year, first as it posed a serious challenge to China’s traditional broadcasters and now as it rolls out its own new line of smartphones. Read Full Post…
Bottom line: A deal designed to avoid punitive tariffs on Chinese solar panels exported to Europe is rapidly collapsing, with new anti-dumping tariffs likely to be imposed by the end of the year.
New clouds loom in EU-China solar war
A looming clampdown on Chinese solar panels in Europe is rapidly accelerating, with word that the EU will review part of a landmark 2013 agreement that initially helped to prevent a trade war but is showing rapid signs of unraveling. The case centers on the prices of Chinese solar panels, which are typically much lower than their western counterparts due to a wide array of Beijing policies to support the sector.
The US levied punitive tariffs on Chinese panels to address the situation. The EU was set to do the same when several top politicians stepped in and pushed both sides to reach a compromise deal to avoid such action. That deal saw the Chinese manufacturers agree to raise their prices to levels comparable to products from the west. But no sooner did the deal take effect, then the Chinese companies began undermining the agreement by finding ways to secretly refund money to their European customers. Read Full Post…
Bottom line: Citic Capital and Fosun are expanding their tastes beyond the traditional Chinese preference for distressed assets, reflecting growing sophistication and diverging strategies of China’s emerging private equity buyers.
Citic Capital in group buying OmniVision
Chinese private equity is in a few major headlines this week, picking up assets in the technology, insurance and retail sectors in the US and Japan. The wide range of deals and geographies reflects the diverging strategies of some of China’s emerging private equity giants, which are rapidly developing their own individual personalities on the global stage. Citic Capital is behind 2 of the latest deals, picking up a retail asset in Japan and a US company that specializes in imaging technology. Meantime, Fosun International (HKEx: 656) has made a major new purchase in the US, offering to buy the remaining stake in an insurer that it first invested in last year. Read Full Post…
The following press releases and media reports about Chinese companies were carried on May 5. To view a full article or story, click on the link next to the headline.
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EU Solar-Panel Industry Wins Review Of China Price Pact (English article)
Hua Capital, Citic Capital To Take OmniVision (Nasdaq: OVTI) Private For $1.9 Bln (English article)
McDonald’s (NYSE: MCD) May Reach 200 Franchised Stores in China This Year (Chinese article)
Mobile Chauffeur App E Daijia Lands $100 Mln Series D Funding (English article)
Wanda Chief Wang Jianlin Invests $100 Mln In LeTV (Shenzhen: 300104) Sports (Chinese article)
Bottom line: Gree’s launch of a smartphone line is far too late and could signal the start of a major shake-out for the sector, while ZTE’s move into Japan will be tough but could reap big rewards if it can gain traction.
Gree starts shipping smartphones
You know China’s smartphone market is due for a major correction when a stodgy home appliance maker like Gree (Shenzhen: 000651), better known for its air conditioners, enters the market. But that’s exactly what’s happened, in a move that has the word “dud” written all over it. Meantime, the more established smartphone maker ZTE (HKEx: 763; Shenzhen: 000063) is making a risky but wiser move by targeting the lucrative but often ignored Japanese market, as it looks for growth alternatives outside a Chinese market that is the world’s largest for smartphones but also incredibly competitive. Read Full Post…
