Bottom line: Ant Financial’s bid for a stake in Indian smartphone maker Micromax reflects Alibaba’s recent focus on India, as it seeks to expand to markets where it can quickly grow and justify its high valuation.
Alibaba unit eyes Micromax investment
E-commerce giant Alibaba (NYSE: BABA) appears to have its sights set on India, with word that the company’s financial arm is leading a group that could invest $1 billion or more for a stake in local smartphone giant Micromax. The reported bid is being led by Ant Financial, which is separately run from Alibaba and has no equity relationship with the US-listed e-commerce giant. But such a bid would clearly be part of Alibaba’s broader global expansion, as it tries to justify its lofty valuation following a record IPO last September. Read Full Post…
Bottom line: Sina stands a 50-50 chance of getting a takeover bid within the next year, as suitors eye it for its low valuation, well-respected name and controlling stake of Weibo.
Sina anticipating suitor?
Leading web portal Sina (Nasdaq: SINA) has become one of China’s perennial Internet underperformers, leading to occasional talk that it might become a takeover target for a larger, better-run peer. Now Sina has just announced its renewal of a “poison pill” plan designed to prevent such a hostile takeover. This particular move looks like a formality rather than indicator of a looming takeover bid, since Sina launched the original plan 10 years ago and perhaps it is now is now set to expire. But the fact that Sina is not only renewing the plan, but doing so in a very public way, indicates it may feel it could become a takeover target in the current hot climate for Chinese Internet M&A. Read Full Post…
Bottom line: A negative tale from Chongqing spotlights the challenges Tesla faces in China due to lack of infrastructure, while a big taxi fleet order in Wuhan offers a possible new route for the company to jump-start its Chinese sales.
Tesla taxis hit road in Wuhan
Sputtering new energy car maker Tesla (Nasdaq: TSLA) is in a couple of new China headlines, scoring a big order in the central city of Wuhan and an embarrassing bit of negative publicity in the southwest city of Chongqing. Watchers of the company and its difficult road into China might recall it was exactly a year ago that Tesla’s charismatic founder Elon Musk made a high profile visit to the country to hand over the keys for its first official sale to a local customer.
That event happened on the sidelines of China’s largest annual auto show, which rotates between Beijing and Shanghai and has become a major global event due to the country’s status as the world’s largest auto market. But in a testimony to the challenges Tesla has faced since that hype-filled day, Musk failed to appear at any public events during this year’s show that has been happening all week in Shanghai. Read Full Post…
The following press releases and media reports about Chinese companies were carried on April 29. To view a full article or story, click on the link next to the headline.
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At $5 Bln Valuation, Alipay To Buy 25 Pct Stake In Micromax (English article)
China’s BYD (HKEx: 1211) Wins Its Biggest Electric-Bus Order In US (English article)
Sina (Nasdaq: SINA) Adopts Continuation Of Previous Shareholder Rights Plan (PRNewswire)
Huawei Targets $5 Bln In Sales This Year For Honor Smartphone Brand (Chinese article)
Bottom line: The new Nokia-Alcatel merger, combined with a continued low-key lobbying campaign by Huawei could ultimately convince Washington to ease its ban on Chinese telecoms equipment within the next year.
US to rethink Huawei ban?
A couple of new reports are casting a spotlight on the troubled relationship between Washington and leading Chinese telecoms equipment maker Huawei, and raising the intriguing potential for a much-needed compromise that might end the impasse between the pair. The impasse is really quite one-sided, with Washington banning the sale of all Chinese telecoms equipment in the US due to concerns about the potential for spying. But this kind of policy seems a bit broad, especially amid an accelerating sector consolidation that is leaving wireless carriers with fewer and fewer networking equipment suppliers to choose from. Read Full Post…
Bottom line: Tencent, Baidu and other Chinese Internet giants should rein in their appetite for new debt in anticipation of an economic slowdown that could sharply dampen their growth.
Tencent doubles bond program to $10 bln
Social networking (SNS) giant Tencent (HKEx: 700) shattered Chinese Internet records late last week when it said it would double the size of its already-large bond program to a massive $10 billion, becoming one of the biggest such programs ever for a private Chinese company. The move is part of a broader trend that has seen Chinese Internet firms raise billions of dollars over the last 2 years through a combination of bond offerings and IPOs, tapping strong investor appetite for their high-growth story.
Such sums would have been unthinkable just 2 or 3 years ago, even though China’s economy was growing much faster then and so were the profits and revenues at companies like Tencent. Floating so much debt is normally not a problem in such boom times, and is often used by strong companies like Tencent to fund their growth. Read Full Post…
The following press releases and media reports about Chinese companies were carried on April 28. To view a full article or story, click on the link next to the headline.
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iPhone Sales, China Boosts Apple (Nasdaq: AAPL); Shares Up Modestly (English article)
Lenovo (HKEx: 992) Eyes 100 Mln Cellphone Sales In New Fiscal Year – CEO (Chinese article)
Huawei CEO Says Chinese Cybersecurity Rules Could Backfire (English article)
Trina (NYSE: TSL) Signs Agreement In Hefei Zone for 300 MW DG Solar Power Plant (PRNewswire)
Bottom line: Apple’s new court victory in a China patent dispute shows its relations with Beijing are improving, positioning it well for growth in a country that is likely to pass the US as its largest global market in the next 1-2 years.
Apple wins China victory in patent dispute
A couple of new reports are showing that global gadget giant Apple (Nasdaq: AAPL) may have finally reversed its slumping fortunes in China, led by word that China probably overtook the US to become the world’s largest market for its iPhones in the first quarter of this year. The other report has Apple winning an important court victory against a Chinese company that accused it of illegally using its voice recognition technology.
This pair of upbeat stories come just a week after Apple scored another positive round of publicity in China, announcing it would make a relatively modest investment in 2 solar farms in southwest Sichuan province. (previous post) This sudden flurry of positive stories, and the fact that they’re being widely covered by China’s state-controlled media, shows Apple could finally be turning a corner in the country after a stormy relationship with Beijing over the last 2 years. Read Full Post…
Bottom line: China is likely to become Apple’s largest smartphone market by next year, while Huawei’s smartphones could make significant gains in the next 2 years en route to becoming one of the world’s top 2 brands.
iPhone posts China milestone
Three of the world’s top cellphone makers are in China-related headlines today, led by word that Chinese iPhone sales officially passed the US for the first time in Apple’s (Nasdaq: AAPL) latest reporting quarter. At the same time, 2 of China’s own homegrown cellphone makers with big aspirations are also in the headlines, with both Huawei and Lenovo (HKEx: 992) discussing their goals for the next few years.
One of those has Huawei’s smartphone chief saying he’s aiming to become the world’s largest brand within the next 3-5 years. The other has Lenovo’s chief executive saying he’s aiming to sell 100 million cellphones in the company’s latest fiscal year, as it consolidates its position after a period of rapid expansion. Read Full Post…
Bottom line: Coke’s proposed $400 million purchase of a Chinese protein drinks maker is likely to get quick regulatory approval, and could make significant contributions to its China operations within the next 2 years.
Coke makes new China M&A bid
Six years after a high-profile failure for a major China acquisition, global beverage giant Coca Cola (NYSE: KO) is trying once again with a smaller plan to buy a Chinese maker of protein drinks. This latest play for the maker of China Green-brand drinks looks like a smarter move by Coke, since the deal is valued at a relatively modest $400 million. By comparison, Coke’s failed attempt to buy leading Chinese juice maker Huiyuan (HKEx: 1886) was valued at $2.3 billion, which drew strong scrutiny from China’s anti-monopoly regulator that ultimately vetoed the deal in 2009. Read Full Post…
Bottom line: Xiaomi’s release of a new model and addition of a high-profile investor in India reflect the market’s key role in its global expansion this year, with a likely target of 4 million or more unit sales.
Xiaomi in new India launch
Smartphone sensation Xiaomi is working hard to repair its position in India, following a setback late last year that saw some of its higher end products locked out of the market over a patent dispute. Now the company is making a big new push at the lower end of the market, choosing India for its first product launch outside of China. At the same time, the company announced it has sold a stake in itself to one of India’s best known tech tycoons, a patriarch at the renowned Tata Group conglomerate.
Both of these news bits come from an event late last week in India, and underscore the growing importance that Xiaomi is placing on the market this year to keep its meteoric growth alive. Xiaomi is banking heavily on global markets to fuel its growth story, now that it is already king of the smartphone hill in its home China market. Read Full Post…
