Bottom line: CICC’s IPO later this year will attract lukewarm investor interest due to its fading prospects, forcing it to scale back its plan to raise up to $1 billion.
CICC to get lukewarm reception in HK
A new story on homegrown investment bank CICC is casting a spotlight on the kind of interesting but also somewhat uninspiring Chinese companies that are likely to make offshore IPOs this year, after last year’s bumper crop of offerings that included a far more exciting field of candidates. Yesterday I wrote about Legend Holdings, parent of PC giant Lenovo (HKEx: 992), which wants to raise $2-$3 billion through a listing in Hong Kong. Like Legend, China International Capital Corp (CICC) is a company that’s unlikely to excite investors but could still draw a some interest as a decidedly second-tier player. Read Full Post…
Bottom line: Yum’s new upscale Italian restaurant looks like a smart concept for the China market, but a broader campaign to move its Chinese KFC stores upmarket looks like too little too late.
A year after announcing plans for a major overhaul of its aging Chinese KFC stores, Yum Brands (NYSE: YUM) is adding another prong to its China reboot with the launch of an upscale Italian eatery as it tries to to regain relevance in its most profitable market. Yum’s newest China restaurant brand, Atto Primo, is situated in the heart of the Shanghai Bund, home to some of the city’s oldest and most famous buildings and most expensive restaurants. Yum is calling the restaurant a “lab” for now, but I suspect it could quickly expand the concept with new outlets if it proves popular. Read Full Post…
The following press releases and media reports about Chinese companies were carried on April 17. To view a full article or story, click on the link next to the headline.
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SunPower (NYSE: SPWR), Apple (Nasdaq: AAPL) To Build Solar Projects In China (English article)
P2P Lending Site Lufax Completes $485 Mln Fund Raising Round (Chinese article)
China’s Former IPO King CICC Looks for A Fresh Start (English article)
Baidu (Nasdaq: BIDU) Unveils Self-developed DuWear Smartwatch OS (English article)
Bottom line: Legend Group’s IPO should get a solid reception, and Alibaba’s separately listed drug and film units should also perform well over the next few years as the Hong Kong stock exchange gains popularity for China tech firms.
Legend makes first public filing for HK IPO
A pair of stories today are casting a spotlight on Hong Kong and its future potential as a hotbed for Chinese tech listings. One of those involves e-commerce leader Alibaba (NYSE: BABA), which wanted to make its record-breaking IPO in Hong Kong last year but ultimately chose New York due to ownership issues. The second involves Legend Holdings, parent of PC giant Lenovo (HKEx: 992), and one of China’s oldest and most respected private tech companies.
The first news bit has Alibaba injecting the pharmacy business from its popular Tmall online shopping mall into its Hong Kong-listed Alibaba Health (HKEx: 241) unit. The second has Legend Holdings making its first public filing for a long-planned listing in Hong Kong that should happen later this year, including some of the first official financials we’ve seen for the IPO. Read Full Post…
Bottom line: China’s Ninebot most likely purchased Segway for less than $100 million to get its technology, and could make a New York IPO by 2017 that will value the firm at $2-$5 billion.
Ninebot buys Segway
If you can’t beat ’em, then buy ’em. That seems to be the philosophy at a Chinese firm called Ninebot, which has just announced it has purchased US rival Segway, maker of a trendy type of 2 wheel, stand up vehicle used to travel short distances. The pair of companies previously had a stormy relationship, as Segway had accused Ninebot of intellectual property theft. So this new purchase should formally end the copycat allegations. Read Full Post…
Bottom line: More Chinese online video companies could soon follow LeTV onto the global stage as their home market soars, providing competition in smaller markets to locally entrenched players like Hong Kong’s PCCW and TVB.
LeTV marches into HK
China is generally considered a technology follower rather than a leader, but new data are showing an exciting trend that could see it finally emerge as a global innovator in Internet-connected video services. The factors behind this movement are uniquely Chinese, and stem from a huge pent-up demand in China for quality video services. Such services are finally starting to come from a growing range of private companies led by names like LeTV (Shenzhen: 300104), Xiaomi and Youku Tudou (Nasdaq: YOKU), which are far more innovative and nimble than the stodgy state-run firms that dominate the traditional broadcasting sector.
Those newer companies are showing early signs of trying to go global, using Hong Kong and other Southeast Asian markets as their stepping stones onto the world stage. Such markets are relatively small and rely heavily on western content, making them particularly fertile ground for some of these Chinese firms that can create and distribute content more suitable for Asian audiences. Read Full Post…
The following press releases and media reports about Chinese companies were carried on April 16. To view a full article or story, click on the link next to the headline.
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Legend Group Files For Hong Kong IPO, 2014 Profit Reaches 4.1 Bln Yuan (Chinese article)
Alibaba Injects $2.5 Bln Online Pharmacy Business Into Alibaba Health (HKEx: 241) (English article)
Bottom line: LeTV’s smartphone gamble, based on relatively cheap phones tied to its video services, could succeed despite tough competition if its newly launched models get positive reviews.
LeTV launches smartphones
Online video sensation LeTV (Shenzhen: 300104) is all over the tech headlines this morning, with the formal launch of the first 3 models for its previously announced foray into smartphones. The company is taking a page from its successful business model with smart TVs, once again selling what it’s billing as a relatively high-end product for low prices in a bid to attract customers to its core paid video services.
LeTV’s biggest problem will be finding an audience for these models, as it’s quite late to the smartphone game. That fact is being underscored by new industry data that shows China’s cellphone market contracted 5 percent in March, amid growing signs of saturation due to stiff competition. Read Full Post…
Bottom line: A merger between 58.com and Ganji looks like a smart pairing that would create a clear leader in online classified ads with a market value worth up to $8 billion.
58.com eyes Ganji
China’s Internet world has been buzzing these last 2 days on a steady stream of reports involving a possible merger between leading online classified advertising site 58.com (NYSE: WUBA) and Ganji, one of its biggest rivals. The reports have been somewhat conflicting, some saying a deal is imminent and others saying talks have stalled, but it’s clear that something is happening behind the scenes. The deal certainly looks quite exciting if it’s happening, as it would create a clear market leader anchored in the well-run 58.com, which is often called the Craigslist of China.
This kind of merger often fails to happen in China for reasons of pride, as many of these company founders are fiercely independent entrepreneurs who would rather see their empires slowly crumble than sell to someone else. But more recently we’ve seen some of these entrepreneurs become more realistic and realize they can’t survive as independent companies, and I suspect that’s what’s happening in this case. Read Full Post…
The following press releases and media reports about Chinese companies were carried on April 15. To view a full article or story, click on the link next to the headline.
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Ganji, 58.com (NYSE: WUBA) To Merge – Report (Chinese article)
Bottom line: Shares of Tencent and Alibaba are overvalued and will stagnate or fall for the rest of the year, while a group trying to buy out Sungy Mobile may have to raise its offer but should succeed in privatizing the company.
Froth builds on Tencent stock
It seems I was partly wrong when I previously said that e-commerce giant Alibaba (NYSE: BABA) was quite expensive following its record-breaking IPO last year, and that its value would gradually sink to a level comparable with rival Tencent (HKEx: 700). In this case I wasn’t wrong in thinking the 2 companies should be comparably valued. Instead, I should have focused on the potential for a rally in Tencent shares, which have risen sharply to approach Alibaba’s level since the start of the year.
While those 2 companies look comfortably situated in the stratosphere of Internet valuations, the same can’t be said for mobile game operator Sungy Mobile (Nasdaq: GOMO), which has just announced its receipt of a management-led buyout offer. If the attempt succeeds, it would mean Sungy’s life as a publicly traded company could end after less than 2 years, the briefest for a listed Chinese company that I’ve ever seen. Read Full Post…
