The following press releases and media reports about Chinese companies were carried on November 12. To view a full article or story, click on the link next to the headline.
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Bottom line: Telefonica’s sell-down of its Unicom stake presages an exit from the investment next year, ending a decade of failed tie-ups by foreign telcos looking to tap the Chinese telecoms services market.
Telefonica halves Unicom stake
Chinese telco shares may look like a good bet for small investors hoping to profit from company stock gains, but they’re a clear dud for foreign carriers hoping to profit from China’s huge but highly protected telecoms market. That’s my latest assessment following word that Spain’s Telefonica (Madrid: TELF) is further selling down its stake in China Unicom (HKEx: 762; NYSE: CHU), in what looks like a prelude to a complete exit from this problematic investment.
If Telefonica does indeed completely dump Unicom, it would mark the end of a decade-long courtship that saw some of the world’s top telcos invest heavily in their Chinese counterparts. All of those investments ended in divorce, with the foreign carriers selling their shares when they failed to get any strategic benefits from the tie-ups. Read Full Post…
Bottom line: Xiaomi’s new $1.5 billion funding is smaller than expected but gives it a strong valuation, as its small investments in Youku Tudou and iQiyi look like a smart way to quickly build up its product ecosystem.
Xiaomi gets rich valuation from new funding
There’s no shortage of news this week on hyperactive smartphone sensation Xiaomi, which is showing up at least 3 major headlines as it lands major new funding and explores potential tie-ups with China’s top 2 online video sites as well as faded smartphone pioneer BlackBerry (Toronto: BB). I almost have to catch my breath after writing all of that, as any one of these 3 stories would normally qualify as major news. The fact that all 3 are coming at the same time testifies to Xiaomi’s ability to do big deals, and its charismatic CEO Lei Jun may soon take the title for China’s most hyperactive tech leader from the current holder of that title, Alibaba (NYSE: BABA) founder Jack Ma. Read Full Post…
Bottom line: The Commerce Ministry should mediate an industrywide settlement over Alibaba’s claims to the Double Eleven Trademark to prevent the dispute from disrupting the nation’s e-commerce development.
Regulator should mediate Double Eleven dispute
As the buying frenzy builds to a crescendo on this year’s November 11 Singles Day, e-commerce giant Alibaba (NYSE: BABA) should be commended for turning an ordinary day of the year into a shoppers paradise that now generates more sales than any other major retailing day in the world. (company announcement)
But this year’s binge-buying day has also seen some controversy, as Alibaba’s flagship Tmall shopping site reportedly made behind-the-scenes threats to some media warning them not to run advertisements featuring the Double Eleven moniker. Tmall reportedly said such ads violated its trademarks, and indeed Alibaba has registered several trademarks related to the “Double Eleven” name that is a Chinese shorthand for the eleventh day of the eleventh month each year. (previous post) Read Full Post…
The following press releases and media reports about Chinese companies were carried on November 11. To view a full article or story, click on the link next to the headline.
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Xiaomi to Take Stake in iQiyi, Youku Todou (NYSE: YOKU) – Source (English article)
Bottom line: Solar consolidators like GCL-Poly and Shunfeng will suffer short-term pressure due to difficult acquisitions, but could be longer-term beneficiaries as they earn government goodwill for their actions.
Outlook turns cloudy for Poly-GCL
The latest deal involving an insolvent solar panel maker is seeing a group led by GCL-Poly Energy (HKEx: 3800) take control of bankrupt Chaori Solar, in a takeover that looks slightly ominous but also potentially interesting for investors. The ominous element comes from the fact that these bankruptcy proceedings are occurring Chinese courts, where local politics are often more important than forging deals that make commercial sense.
But the interesting element comes from the fact that many of these insolvent companies enjoy strong backing from their local governments. That means that once all the finances are cleaned up for these insolvent firms, they could actually become good longer-term assets for their new owners. Read Full Post…
Bottom line: Mobile SNS firm Momo is likely to raise far less than the $300 million it has targeted for its IPO, as it kicks of a mini-surge of loss-making Chinese tech firms racing to list in New York by year end.
Momo kicks off year-end IPO rush
A record year of fund raising for Chinese firms on Wall Street could still have some life left, with word of another major offering plan by Momo, operator of mobile-based social networking (SNS) service. The company’s plan to raise up to $300 million would have looked ambitious at this time last year, when New York IPOs by Chinese firms were just starting to gain momentum after a nearly 3 year deep freeze. But that kind of target has become the norm in the current climate, and I expect we could see a flurry of similar-sized offerings over the next 5 or 6 weeks before the final curtain comes down on a banner year for Chinese tech IPOs in 2014. Read Full Post…
Bottom line: Bright Food’s overseas IPO plans for its British Weetabix and Australian Manassen brands could get lukewarm response due to investor skepticism about their growth prospects.
Bright eyes offshore IPOs for Weetabix, Manassen
I’ve watched with interest over the last 2 years as Shanghai-based Bright Food has quietly gobbled up a stream of high-profile global investments, positioning the company to potentially become one of China’s first international consumer brands to rival giants like Procter & Gamble (NYSE: PG) and Kraft Foods (Nasdaq: KRFT). Now we’re getting further details of Bright’s growing global aspirations, with word that it’s planning a series of international IPOs including potential major listings in Hong Kong and London. Read Full Post…
The following press releases and media reports about Chinese companies were carried on November 8-10. To view a full article or story, click on the link next to the headline.
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Chinese Social Networking Service Momo Files For $300 Mln IPO (English article)
GCL-Poly (HKEx: 3800) Approves Plan To Buy 30 Pct Of Struggling Chaori Solar (English article)
Bottom line: Shanda is likely to sell a controlling stake of its Cloudary online literature unit to an outside buyer, possibly Tencent, as part of a drive to hand over management of its major units to strategic partners.
Shanda’s Cloudary in rumored sale
The slow-motion break-up of former online entertainment high-flyer Shanda Interactive is back in the headlines, with reports the company has sold its online literature unit to Internet heavyweight Tencent (HKEx: 700). This particular rumor looks logical enough for reasons I’ll give shortly. But I’ve heard so many rumors about sale of part of all of Shanda over the past year that I’ll only believe this latest report when we hear an official confirmation. What’s clear from these latest reports is that Shanda founder and chairman Chen Tianqiao continues to look for opportunities to sell part or all of his company, as he reportedly grows restless with his lackluster businesses whose growth has stalled. Read Full Post…
Bottom line: Lenovo’s latest results show its smartphone business continues to gain market share at the expense of profits, and it would be better advised to focus on building a strong brand to increase customer loyalty.
Lenovo smartphones post health sales gains
The latest results for leading PC maker Lenovo (HKEx: 992) don’t look too rosy, even as the company’s smartphone business continued to outperform the global market. There are quite a few pieces to this puzzle, which means the longer-term outlook for Lenovo’s smartphone business is still unclear as the overheated market undergoes a much-needed shakeout. The outcome of this story will be crucial to Lenovo’s future, since the global market for its core PC business is stagnating and even starting to contract as consumers gravitate to a newer generation of more mobile, specialized devices. Read Full Post…
