Bottom line: CGN’s shares are likely to rise 10-15 percent on their first trading day next week, while JD.com’s shares could rally over the next few days before resuming a longer downward trend towards their IPO price.
JD raises $620 mln in secondary offering
Just when the year-end rush of new share offerings appeared to be losing momentum with weak demand for property developer Dalian Wanda, the market is getting a lift with a stronger reception for 2 other share sales. The first of those has seen nuclear power plant builder CGN Power price shares for its IPO at the top of their range, making it the largest new Hong Kong listing in 2 years. The second deal saw strong demand for a secondary offering by e-commerce giant JD.com (Nasdaq: JD), helping it to raise another $619 million following its IPO back in May. Read Full Post…
Bottom line: Foreign-owned meat companies could lose their premium image over Chinese rivals after a Shanghai-based scandal over the summer, as foreign firms remain vulnerable to high scrutiny.
Tyson China expansion on hold
Just yesterday I wrote how foreign food makers generally enjoy a better reputation in China over their domestic rivals, but one glaring exception to that rule is the processed meat industry. The meat processors also used to enjoy a strong reputation, until a major food safety scandal erupted over the summer involving Husi Food, a unit of US meat processor OSI Group. Now the latest headlines are quoting OSI saying 6 of its China workers have been arrested in connection with the scandal. It has also confirmed layoffs of most workers at its Shanghai plant that has been idled since the scandal first broke. Read Full Post…
Bottom line: A new management shake-up at China Telecom could hint at a coming period of instability for the company, which could hamper its performance just as it gets set to launch commercial 4G service next year.
Management shake-up at China Telecom
I’ve been quite negative on China Unicom (HKEx: 763; NYSE: CHU) for quite a while now, as China’s second largest wireless carrier seems to be constantly undergoing new management reshuffles that have hobbled its performance since its creation 5 years ago through the merger of China’s 2 smallest telcos. But now the nation’s smallest wireless carrier China Telecom (HKEx: 728; NYSE: CHA) is showing signs of similar issues, with word that the company is also undergoing its own management shake-up affecting a growing number of top provincial-level executives. Read Full Post…
The following press releases and media reports about Chinese companies were carried on December 4. To view a full article or story, click on the link next to the headline.
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China’s CGN Power Prices Hong Kong IPO At Top Of Range, Raises $3.2 Bln (English article)
JD.com (Nasdaq: JD) Announces Pricing Of Secondary Offering Of Its ADSs (PRNewswire)
Meat Supplier OSI Says Six China Workers Arrested (English article)
ICBC (HKEx: 1398) Markets Record Offshore Yuan Bond Sale Amid Currency Push (English article)
China Mobile (HKEx: 941) Selling 617 4G Devices 1 Year After Launch Of TD-LTE (Chinese article)
Bottom line: Wal-Mart’s new layoffs underscore the intense competition in China’s retail market, which could cause it to miss its new store target, while Heinz’s expansion reflects the big potential for big global food brands.
Heinz opens major new China plant
Two new stories are casting a spotlight on diverging trends in the retail and consumer space for major multinationals, with retailing giant Wal-Mart (NYSE: WMT) making big new cuts in its China operations even as US food maker Heinz launches a massive new China factory. Wal-Mart’s move highlights the intense competition that has gripped China’s retail sector over the last 3 years, forcing several major players to leave the market or consider doing so. At the same time, there’s still huge opportunity for makers of quality food and other consumer products, especially from major foreign brands that are generally more trusted by Chinese buyers than domestic names. Read Full Post…
Bottom line: Wanda chief Wang Jianlin could purchase a controlling stake in MGM as he looks to take over a Hollywood studio, while his Wanda Dalian property IPO will get a tepid reception but perform well over the longer term.
Wanda’s Wang Jianlin eyes Lions Gate, MGM
Property magnate Wang Jianlin is used to getting what he wants, but 2 new headlines indicate his Wanda Group may have to settle for compromise in a pair of its latest forays, one involving a Hong Kong IPO and the other involving his desire to purchase a major Hollywood studio. The former headline has Wang reportedly scaling back plans for a mega IPO in Hong Kong for Dalian Wanda, his group’s flagship property arm. The second and more intriguing news item has him seeking to buy a controlling stake in a major Hollywood studio, with Lions Gate (NYSE: LGF) and MGM mentioned as 2 possible candidates. Read Full Post…
Tech executives have been uncharacteristically quiet on their microblogs this past week, possibly due to the US Thanksgiving holiday that saw light activity in New York where most of their stocks are traded. But all the holidays in the world could never quiet the talkative Lei Jun, CEO of Xiaomi, who was busy talking up one of his company’s latest investments. That particular investment came in the unlikely property management space, involving a developer of YMCA-style buildings that rent out apartments to young people. Read Full Post…
The following press releases and media reports about Chinese companies were carried on December 3. To view a full article or story, click on the link next to the headline.
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Wanda Group In Talks to Buy Lions Gate (NYSE: LGF), MGM in Hollywood Push (English article)
21Vianet (Nasdaq: VNET) Gets $296 Mln From Kingsoft, Xiaomi and Temasek (Globe Newswire)
Wal-Mart (NYSE: WMT) Cuts Another 250 China Jobs, Shuts Dalian Office (English article)
Bottom line: Qunar’s ballooning losses reflect its aggressive spending on market share, which will turn off investors and pressure its stock until it shows signs of moving towards profitability.
Qunar losses swell past revenues
My third-quarter Chinese earnings season officially ends today with the newly issued results of online travel agent Qunar (Nasdaq: QUNR), whose losses appear to be spiraling out of control. Frankly speaking, I could never really understand why investors were so attracted to this company, whose main asset seems to be its association with leading Chinese search engine Baidu (Nasdaq: BIDU), which also happens to be Qunar’s majority stakeholder. Read Full Post…
Bottom line: Dwindling investor appetite will result in a weak debut for Momo’s upcoming IPO, which may also get negative publicity as it gets caught in a minor scandal in its home China market.
Momo pares back IPO target
Mobile social networking service (SNS) provider and IPO candidate Momo Inc has become a regular feature in the Chinese headlines these last few days, but for all the wrong reasons. The company was in the news late last week when it slashed the size of its planned New York listing, and is now back with a fresh set of headlines on a scandal involving crooked business dealings. This certainly isn’t the kind of publicity a company wants on the eve of its IPO, which was set to price and debut either this week or next. There’s really not much room for Momo to delay the plan without falling into the Christmas holiday lull, meaning its debut could fizzle due to the stream of bad news. Read Full Post…
A seasonal year-end rush of IPOs by Chinese firms moved into high gear late last week, when media reported that top movie chain operator Wanda Cinema Line and social networking up-and-comer Momo Inc had taken major new steps in their listing plans. The pair would join nuclear plant builder CGN Power, Beijing-based automaker BAIC and real estate developer Dalian Wanda, which were also in the headlines last week, in a year-end fund-raising frenzy that could raise more than $10 billion. Read Full Post…
