The following press releases and media reports about Chinese companies were carried on March 12. To view a full article or story, click on the link next to the headline.
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Alibaba (NYSE: BABA) Preparing To Invest $200 Mln In Snapchat – Source (Chinese article)
Baidu (Nasdaq: BIDU) Halts Updates, Maintenance For Mobile OS (Chinese article)
Car Inc (HKEx: 699) Announces Full-Year 2014 Results (HKEx announcement)
Online Listings Site Ganji Launches IPO Process – CEO (Chinese article)
Chinese Shoe Factory Workers Strike Over Benefits (English article)
Bottom line: The EU is likely to resolve its latest dispute with Chinese solar firms over implementation of a year-old pricing agreement, but the clash will undermine trust and hints at future conflict over the issue.
Canadian Solar denies violating EU agreement
After several months of relative quiet, Chinese solar panel makers are back in the headlines this week with another looming trade dispute in Europe. This particular story, and much of the industry’s woes over the last 2 years, stems from broader western allegations of unfair government support for Chinese panel makers. In this case China and the EU signed a deal a year ago to resolve their dispute, but now the EU is accusing several Chinese firms of violating the deal.
The EU had previously threatened to levy punitive tariffs on Chinese panel makers, saying they received unfair support through policies like cheap loans from state-run banks and low-cost land from local governments. Washington made similar claims and ultimately did impose punitive tariffs, but the EU took a more conciliatory approach and reached a settlement after the intervention of several top government leaders. Read Full Post…
Bottom line: A record false advertising fine against P&G and Beijing’s selection of Alibaba to host its procurement platform reflect the current government bias against foreign firms, which is likely to remain strong for the next 1-2 years.
Crest gets record fine for false advertising claims
Today I’m grouping 2 headlines together that look quite different on the surface but seem to underscore a growing bias in China against foreign companies, despite Beijing’s insistence on no such prejudice. One headline has global consumer products giant Procter & Gamble (NYSE: PG) receiving what looks like a large and somewhat arbitrary fine for false advertising. The other has media reporting that Beijing has moved its online government procurement platform onto servers operated by AliCloud, the cloud computing division of e-commerce giant Alibaba (NYSE: BABA). Read Full Post…
Bottom line: Apple Watch should debut strongly in China thanks to extensive partnerships with top Chinese retailers and app makers, giving the product instant relevance in the local market.
Apple Watch coming to China
Global gadget leader Apple (Nasdaq: AAPL) has been in the local tech headlines nonstop these last few days, wowing Chinese fans with a customized version of its new Apple Watch that will debut in China next month as part of its global launch. Pundits are mixed on how the watch will fare in China, but I expect it should do quite well thanks to inclusion of China’s hottest apps together with the company’s own strong reputation for well-designed, cutting-edge products.
In a separate but probably related Apple headline, media are also reporting a new smart air conditioner that the company has developed with local appliance leader Haier (HKEx: 1169) will also debut in April. Apple first announced this alliance last June as part of a broader smart device alliance under the name of HomeKit, and I suspect the Apple Watch will be usable with these new air conditioners. Read Full Post…
The following press releases and media reports about Chinese companies were carried on March 11. To view a full article or story, click on the link next to the headline.
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EU Accuses 3 Chinese Firms Of Non-Compliance With Solar Panel Agreement (Chinese article)
P&G (NYSE: PG) Fined 6 Mln Yuan Over Crest’s Teeth-Whitening Ads (English article)
Sina (Nasdaq: SINA) Reports Q4 2014 Financial Results (PRNewswire)
Haier Says First HomeKit Air Con With Apple (Nasdaq: AAPL) To Debut In April (Chinese article)
Apple (Nasdaq: AAPL) Watch Not Yet Setting Chinese Pulses Racing (English article)
Bottom line: New smaller acquisitions by 58.com and Tuniu look like smart, focused moves to complement their existing business, and should quickly help to improve their top and bottom lines.
Tuniu buys Taiwan-focused travel agents
A couple of smaller acquisitions are in the headlines today, with word that online travel agent Tuniu (Nasdaq: TOUR) and Internet classified ad site 58.com (NYSE: WUBA) have both made strategic purchases that look like thoughtful, well-targeted moves. In this case Tuniu has announced it will buy 2 travel agencies that will boost its exposure to the Taiwan travel market, while 58.com is buying a site that specializes in home interior decoration products.
Both deals were relatively small, worth less than $40 million, which is generally the kind of purchase I like to see as it indicates a more focused approach to M&A. That contrasts sharply with the much bigger recent purchases by China’s largest Internet companies, most notably by Alibaba (NYSE: BABA) and Baidu (Nasdaq: BIDU). Read Full Post…
Bottom line: China’s Internet companies are expecting a slowdown this year as the nation’s economy slows, but their shares could see some upside if the declines are less severe than many are forecasting.
Qihoo, Phoenix, LITB see slowing growth
It’s not often that we see any major macroeconomic trends when a diverse group of Internet companies all report results on the same day, since individual company and sector factors often have a big influence. But we’re seeing just such a trend emerge in the new results from the high-tech trio of software security specialist Qihoo 360 (NYSE: QIHU), e-commerce firm LightInTheBox (NYSE: LITB) and online media firm Phoenix New Media (NYSE: FENG), which all are forecasting a sharp slowdown in the first quarter of this year. Read Full Post…
Bottom line: China should work with its major trading partners to send unified signals on issues like piracy to create a transparent business climate and avoid confusion.
US, China send crossed signals on piracy
In an unusual reversal of roles, Washington officials who regularly criticize China for piracy found themselves defending Alibaba (NYSE: BABA) on the issue last week, just a month after a Beijing regulator blasted the e-commerce leader for allowing rampant fake goods trade on its popular Taobao site. The conflicting messages are at least partly political, since a similar US condemnation would have contradicted Washington’s praise of Alibaba’s piracy-fighting efforts over the last 2 years. Read Full Post…
The following press releases and media reports about Chinese companies were carried on March 10. To view a full article or story, click on the link next to the headline.
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GSK (London: GSK) Cuts China Staff, Ends Cash Awards For Sales Model (Chinese article)
LightInTheBox (NYSE: LITB) Reports Q4 And Full Year 2014 Financial Results (PRNewswire)
Tuniu (Nasdaq: TOUR) Announces The Acquisitions Of Two Travel Agencies (Globe Newswire)
Qihoo 360 (NYSE: QIHU), Xueda (NYSE: XUE) Form Internet Education JV (English article)
58.com (NYSE: WUBA) Acquires Minority Stake In Interior Decoration Service Platform (PRNewswire)
Bottom line: Carrefour’s new China strategy ends a period of uncertainty about its commitment to the market, though its move into e-commerce is long overdue and could fail due to its lateness.
Carrefour decides to stay in China
After sending a stream of mixed signals over the last 2 years about its commitment to China, global retailing giant Carrefour (Paris: CA) has finally decided it will stay in the market for now, but only after overhauling its operations. The decision will see the company do a major consolidation of its procurement centers, and also push into convenience stores and e-commerce. The signals seem to imply that the days of rapid expansion for its core chain of superstores is probably finished, with e-commerce and smaller stores likely to form the bulk of its China expansion going forward. Read Full Post…
Bottom line: Youku Tudou’s big bet on original content development could pay dividends in the long term, but will push the company further into the loss column in the short term as it spends heavily on the business.
Original content in focus at Youku Tudou
When the history books are written, the story of China’s online video industry could well be called “A Tale of 2 Business Models”. The most common model is seeing a growing number of players invest big money on development of original content, which is what former leader Youku Tudou (NYSE: YOKU) is doing with a major new announcement in that direction. The other model is seeing players like LeTV (Shenzhen: 300104) focus equally or more on distribution by rolling out new products like smartphones and Internet TVs to deliver their content. Read Full Post…
