The following press releases and media reports about Chinese companies were carried on January 21. To view a full article or story, click on the link next to the headline.
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Itochu, Charoen (Tokyo: 8001) Pay $10.4 Bln for Stake in Citic (HKEx: 267) (English article)
China Telecom Incremental Increases Outpace China Mobile, Unicom in 2014 (Chinese article)
Spring Airlines (Shanghai: 601021) To Make Trading Debut In Shanghai (Chinese article)
New Oriental (NYSE: EDU) Announces Second Fiscal Quarter Results (PRNewswire)
Bottom line: This year is likely to see 6-9 New York IPOs by Chinese tech firms, mostly in the $50-$100 million range, while Legend’s planned IPO in Hong Kong or China is likely to get a mixed reception.
Lenovo parent Legend eyes H2 IPO
A new forecast on Chinese high-tech IPOs for the year ahead is stating the obvious, namely that new listings are set to slow dramatically in 2015 after a bumper harvest in 2014. In fact, the record year for fund-raising in 2014 is a bit misleading, as it really represents about 3 years worth of offerings that accumulated during a frosty period that led to a near freeze for IPOs starting in 2011. Now that much of the backlog has been cleared, it’s not surprising that there are few major new companies that are still at the right stage of development for listings.
At the same time, another report says that Legend Holdings, parent of PC giant Lenovo (HKEx: 992), has decided to list in Hong Kong, forgoing previous plans to make an IPO in its home China market. That decision isn’t a huge surprise if it’s true, and could provide a highlight for international tech investors in this year’s muted IPO parade for high-tech firms. Read Full Post…
Bottom line: ZTE’s latest preliminary results show the company may have turned a corner in the second half of last year and could be set for a business rebound if it can maintain focus on key new product and service areas.
ZTE turns corner after restructuring
A new profit report from ZTE (HKEx: 763; Shenzhen: 000063) is painting a cautiously upbeat picture about the telecoms giant as it emerges from a difficult period and tries to reposition itself as a specialist in networked systems and devices that talk to each other. The company’s report that its profit for 2014 nearly doubled from a year earlier certainly looks encouraging, though it probably includes many one-time items that make the figures less meaningful. A comparison with its last financial report from the third quarter is more meaningful and also looks mostly encouraging, showing operating profit and revenue growth were picking up even as net profitability appeared to be slowing. Read Full Post…
Bottom line: China and the west should sign an agreement for telecoms networking equipment trade that creates a transparent and fair playing field for fair trade while protecting national security.
Transparency needed in global telecoms trade
A simmering national security standoff between China and the west involving telecoms networks could soon heat up again, with word that China Telecom, the smallest of China’s 3 state-run carriers, is preparing a bid to build a new wireless network in Mexico. Analysts say the US might object to such a Chinese-run network so close to its borders, fearing it could contain backdoors and other hidden features that might accommodate spying by Beijing.
Similar previous concerns have locked Chinese telecoms equipment makers out of the lucrative US market, and cost leading manufacturer Huawei a chance to help build a cutting-edge broadband network in Australia. Read Full Post…
The following press releases and media reports about Chinese companies were carried on January 20. To view a full article or story, click on the link next to the headline.
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Legend Holdings To Make $2-$3 Bln Hong Kong IPO In H2 – Source (Chinese article)
Chinese Dot-com IPOs Fading In 2015 After Record Year (English article)
ZTE (HKEx: 763) To Post 94.2 Pct Growth In Full-Year Profit (Businesswire)
Tumblr, Still Not Blocked In China, Soon To Offer Chinese Version (English article)
Online Classifieds Site Baixing Wins $100 Mln Investment (English article)
Bottom line: KFC’s plan to roll-out a low-cost premium coffee product looks like part of its broader plan to move its restaurants upscale, and could help it regain some momentum it has lost in China over the last 3 years.
KFC eyes low-cost premium coffee
It’s been nearly a year since struggling fast food giant KFC (NYSE: YUM) announced a much-needed overhaul for its China restaurants, and now we’re finally getting some details of changes to come with word of an interesting new plan to go upscale that takes aim at McDonald’s (NYSE: MCD). The new plan centers on coffee, with KFC aiming to find a new place at the low end of the premium market.
The move looks smart, since coffee has emerged as a hot and trendy product over the last couple of years in China. It also spotlights the fact that the fast-food market may be close to saturation in China’s largest cities. That means that KFC, McDonald’s and other large operators may be entering a new phase of their development where China looks more like the mature western markets where they are based, and they need to be more innovative to keep growing. Read Full Post…
Bottom line: A new list of China’s top apps spotlights fast-growing names like news app Today’s Headlines, photo app Meitu and dictionary app Youdao, which could raise hundreds of millions of dollars in new funds this year.
Meitu earns place on top 10 app list
A newly released list of China’s top 10 apps for 2014 is shining a spotlight on an up-and-coming field of lesser known names that could be companies to watch, as many are much younger than stalwarts like Baidu (Nasdaq: BIDU), Alibaba (NYSE: BABA) and Tencent (HKEx: 700). The “BAT” trio of China’s biggest Internet firms took 4 of the top 10 spots on the list, which was compiled by Baidu. But far more interesting were some of the other names, including recently listed social networking app Momo (Nasdaq: MOMO) and news app Today’s Headlines, which made its own headlines with its meteoric rise last year. Read Full Post…
Bottom line: China Mobile’s launch of a new Internet services unit, Migu, is a good and needed move conceptually, but will fail to innovate and succeed due to a bureaucratic corporate culture.
China Mobile launches Migu Internet services unit
I have very mixed feelings on leading telco China Mobile (HKEx: 941; NYSE: CHL), which mostly seems like a slow-moving, highly protected state-run behemoth but at times also seems to have some innovative instincts. The company’s new launch of Migu, a unit dedicated to developing Internet content and services, seems to fall in the latter category, and is long overdue. But the launch of Migu is quite late and will have a lot of catching up to do, and is almost certain to be hampered by China Mobile’s slow-moving corporate culture that has little experience developing products for the fast-changing Internet market. Read Full Post…
The following press releases and media reports about Chinese companies were carried on January 17-19. To view a full article or story, click on the link next to the headline.
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Bottom line: UCWeb’s new India tie-up with Facebook looks like a good step that will help its global expansion, while Qihoo’s new Microsoft alliance looks mostly like inconsequential hype.
UCWeb ties with Facebook in India
A couple of new corporate tie-ups are in the headlines today, led by word of a potentially major new alliance between Alibaba-owned (NYSE: BABA) web browser UCWeb and global social networking giant Facebook (Nasdaq: FB). The other tie-up, which looks far less interesting but still potentially significant, and will see security software specialist Qihoo 360 (NYSE: QIHU) work with Microsoft (Nasdaq: MSFT) in advertising services. This second alliance is just the latest in a long recent string for Qihoo, and seems aimed at breathing life into its struggling stock that is being rapidly abandoned by impatient and disappointed investors. Read Full Post…
Bottom line: Xiaomi’s new more upscale Mi Note phablet should get a strong reception and sell well, drawing on the company’s trendy name and growing base of loyal buyers.
Xiaomi goes upscale with new Mi Note
Smartphone sensation Xiaomi doesn’t seem content to only follow its role model Apple (Nasdaq: AAPL) anymore, and is also taking a page from stumbling sector leader Samsung (Seoul: 005930) with its latest model as it seeks a long-term direction for its products. Of course I’m being just a little facetious with my comparison to Apple, since the only thing Xiaomi shares with the US company is a cool and trendy image. Apple is firmly placed at the top end of the smartphone market, whereas Xiaomi began its life in the mid-range and has steadily moved downmarket since then. Read Full Post…
