Bottom line: JD.com CEO Richard Liu needs to behave more professionally in his business and personally lives, or risk seeing the reputation of his company suffer.
JD.com CEO love saga buzzes in cyberspace
China’s high-tech world is filled with colorful personalities, but few have managed to capture the public’s imagination like JD.com (Nasdaq: JD) founder Richard Liu, or Liu Qiangdong, whose love life has been the source of major headlines this week. I personally find such this kind of chatter entertaining but don’t usually write about it, because it’s not really related to the companies these executives represent. But in this case Liu’s antics are an increasing embarrassment to JD.com, and don’t seem fitting for an e-commerce giant that generated nearly $5 billion in revenue in its latest reporting quarter and has a market value of $34 billion. Read Full Post…
Bottom line: Ctrip’s latest M&A reflects the growing scarcity of good acquisition targets for cash-rich Chinese Internet firms, which could pressure them to issue dividends or launch share buy-backs.
Ctrip makes UK acquisition
A new overseas purchase by leading online travel agent Ctrip (Nasdaq: CTRP) is drawing yawns from investors, reflecting the very real fact that Chinese Internet firms have far too much cash in their coffers and no place to spend it. This particular dilemma is one that most western companies would love to have, since excess cash can be used for not only M&A and organic expansion, but also to pay dividends or buy back shares. But in the case of Chinese companies, a big chunk of the cash has been raised in a series of massive bond and share offerings over the last 2 years, meaning it would be strange to turn around and return the money to investors through a dividend or share repurchase. Read Full Post…
The following press releases and media reports about Chinese companies were carried on January 8. To view a full article or story, click on the link next to the headline.
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Alipay Expands Offline Payment Network through Third-party Agencies (English article)
Xiaomi’s Buying Spree Gives Apple, Samsung New Reasons To Sweat (English article)
Bottom line: Wanda’s new e-commerce initiative looks overvalued following a recent investment, but could have the resources and expertise it needs to pose a serious challenge to Alibaba and JD.com.
Wanda raises money for e-commerce JV
Fresh from the successful listing of its core real estate arm, Wanda Group is pushing full-steam ahead into another major new initiative in e-commerce, aiming to challenge industry leaders Alibaba (NYSE: BABA) and JD.com (Nasdaq: JD). Wanda’s colorful and very wealthy founder Wang Jianlin was busy talking up his e-commerce initiative this week, announcing a major new funding and important new partner for the project. Wang has forged ahead in several new areas over the past year, including hotels, theme parks and movie theaters, as he attempts to build up an entertainment empire to rival global names like Disney (NYSE: DIS). Read Full Post…
Bottom line: Tencent’s inclusion in a national credit database initiative reflects the big commercial potential of WeChat, but a lawsuit over rumor spreading also highlights one of WeChat’s biggest liabilities.
Tencent joins credit card database drive
Two stories in the news are showing how WeChat is likely to become the future big bread-winner for Internet giant Tencent (HKEx: 700), even as the wildly popular mobile messaging service poses tricky liability risks for its parent. The first headlines spotlights WeChat’s huge potential, with reports that the central bank has invited Tencent to take part in development of a new national credit database. The latter news isn’t quite so upbeat, with a Shenzhen-listed drugmaker suing Tencent for failing to stop the spread of rumors about its products over WeChat. Read Full Post…
Tech executives welcomed in the New Year with some intriguing hints on their microblogs, with posts suggesting major new moves in China from global media titan News Corp (Nasdsaq: NWSA) and online video operator LeTV (Shenzhen: 300104). In the former case, a local tech executive posted a photo of himself meeting with Rupert Murdoch in China, indicating the News Corp chief was back doing business in the country after a long absence. In the latter case, LeTV chief Jia Yueting was hinting that his company could soon become the latest Chinese Internet firm to enter the overheated smartphone market. Read Full Post…
The following press releases and media reports about Chinese companies were carried on January 7. To view a full article or story, click on the link next to the headline.
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US Solar Tariff Review Hints At Halved Chinese Cells Rate (English article)
TCL (Shenzhen: 000100) Invests $100 Mln In Wanda’s E-commerce JV (English article)
Kuaidi Taxi App May Raise $800 Mln In New Funding Round (Chinese article)
Drugmaker Sues Tencent (HKEx: 700) Over Rumors Circulating On WeChat (Chinese article)
NDRC Approves Private Investment Plan For Sinopec (HKEx: 386) Retail Unit
Bottom line: UnionPay will see its market share stagnate or even start to decline at home as it faces new competition in the next 3 years, while it’s likely to see sharp growth in its overseas expansion.
UnionPay faces new challenges at home
The coming year could be a groundbreaking one for the important but low-profile business of providing financial settlement services in China, now dominated by bank card issuer UnionPay. Such services allow banks and companies to transfer money back and forth between each other electronically, facilitating things like credit and debit card purchases and letting people withdraw cash from other banks’ ATMs besides their own.
While UnionPay has dominated the sector for domestic transaction settlement service for the last decade, its state-granted monopoly will officially end this year as China complies with a WTO ruling in response to complaints from global leaders MasterCard (NYSE: MA) and Visa (NYSE: V). At the same time, UnionPay is getting challenged by homegrown domestic players led by e-commerce giant Alibaba (NYSE: BABA), whose financial arm is also pushing into the business. Read Full Post…
Bottom line: WeBank and other newly approved private lenders are likely to struggle to find an audience due to operational limitations and competition from state-run banks and gray-market institutions.
WeBank makes first loan in Shenzhen
Some have predicted that a new group of private banks could shake up China’s stodgy financial sector, though the first loan from the group doesn’t look all that threatening. That loan came over the weekend, when WeBank, which is backed by Internet giant Tencent (HKEx: 700), made its first loan since receiving its license late last year. (previous post) The loan was for a modest amount and went to a truck driver in the southern boomtown of Shenzhen where WeBank is based. It carried a relatively high interest rate of 7.5 percent, which is probably suitable for that risk level. (English article) Read Full Post…
Bottom line: Chinese appliance makers and Internet companies need to focus their smart device efforts on one or two key alliances each, or risk spreading their resources too thin.
Haier in new tie-up with Evergrande
Smart devices look set to become a theme of the New Year, with new reports that domestic appliance giants Haier (HKEx: 1169) and Midea (Shenzhen: 000333) have formed major new tie-ups to develop the space. Similar alliances began accelerating in the second half of last year and are aimed at developing the “Internet of Things”, which envisions an interconnected world where devices and their owners can talk to each other at any time over a wide range of wired and wireless networks. Read Full Post…
The following press releases and media reports about Chinese companies were carried on January 6. To view a full article or story, click on the link next to the headline.
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Tencent-backed (HKEx: 700) WeBank Gets The Ball Rolling With First Loan (English article)
Wanda E-Commerce Initiative To Go Online In Fourth Quarter (Chinese article)
