I’m normally quite upbeat on leading online travel site Ctrip (Nasdaq: CTRP), but I really don’t understand the logic behind its new decision to sell 10 percent of itself to US peer Priceline (Nasdaq: PCLN). On the surface, the deal looks reasonable enough, pairing Ctrip’s strength in China with Priceline’s in the US and other western markets. But anyone familiar with Ctrip knows the company is fiercely independent and doesn’t work very well with other strategic partners. What’s more, this deal will put even more money into Ctrip’s already bulging cash pot, giving it more funds than it needs.
News Digest: August 8, 2014
The following press releases and media reports about Chinese companies were carried on August 8. To view a full article or story, click on the link next to the headline.
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- China Imposes New Restrictions On Instant Messaging Tools: Xinhua (English article)
- Priceline (Nasdaq: PCLN) To Invest $500 Mln In China’s Ctrip (Nasdaq: CTRP) (English article)
- Huawei To Exit Ultra-Low End Smartphones, Cut 80 Pct Of Models By Year End (Chinese article)
- Anti-Trust Probes Expand To Include 12 Japanese Automotive Firms (Chinese article)
- Autohome (NYSE: ATHM) Announces Unaudited Q2 Results (PRNewswire)
- Latest calendar for Q2 earnings reports (Earnings calendar)
Mercedes Joins Foreign Firms Under Scrutiny
It’s a new day, which means it’s time for yet another government investigation into foreign firms that are coming under increasing scrutiny for both their products and business practices. This time it’s luxury automaker Mercedes-Benz (Frankfurt DAIGn) that’s coming under the microscope for anti-competitive pricing in China. Word of this latest probe comes just a week after software giant Microsoft (Nasdaq: MSFT) revealed it is being probed for monopolistic business practices. (previous post)
Other major western multinationals have been probed for similar anti-competitive behavior in the latest year-long campaign, and still others have been targeted over allegations of corruption. Yet another group has been blacklisted from selling to to government organizations over concerns their products could create national security risks. Read Full Post…
Weibo: Qihoo, The9 At Play; Lenovo Defends McDonald’s
Top executives from software security maker Qihoo 360 (NYSE: QIHU) and struggling game operator The9 (Nasdaq: NCTY) were getting chummy in the blogosphere last week, filling the airwaves with chatter as they prepared to announce a new alliance at the country’s top gaming trade show in Shanghai. Meantime, executives from PC giant Lenovo (HKEx: 992) took time out from their usual tech and marketing chatter to make some low-key criticism against the government, including a microblog post in defense of the beleaguered McDonald’s (NYSE: MCD) as it grapples with one of its worst-ever food safety scandals in China. Read Full Post…
News Digest: August 7, 2014
The following press releases and media reports about Chinese companies were carried on August 7. To view a full article or story, click on the link next to the headline.
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- China Said to Exclude Apple (Nasdaq: AAPL) From Procurement List (English article)
- China Mobile (HKEx: 941) Said to Have Held Talks on Buying Axiata Stake (English article)
- Tencent (HKEx: 700) Removes 100 Rumor-Spreading Public Accounts From WeChat (Chinese article)
- Baidu (Nasdaq: BIDU) Acquires C2C Education Platform Chuanke – Source (English article)
- China Preparing To Levy Tax On E-Commerce (Chinese article)
- Latest calendar for Q2 earnings reports (Earnings calendar)
Shanghai Agents Rise Up Against SouFun
Online real estate services empires that took years to build are suddenly coming unglued, with word that Shanghai property firms are joining a list of clients who have stopped giving their business to sector leader SouFun (NYSE: SFUN). I’ll be quite blunt and say that anyone who didn’t see this coming must be living in a cave, even though I was somewhat surprised that the stocks of SouFun and its peers quickly recovered from a sell-off after similar reports emerged last month and in June. We’ll have to wait and see if the stocks rebound again this time, though perhaps this latest news will finally make investors realize that SouFun and its peers could be looking at a prolonged downturn as China’s real estate market finally goes through a much needed correction. Read Full Post…
Taiwan Fines Xiaomi, China Should Take Note
Media-savvy smartphone maker Xiaomi was in the headlines for the wrong reasons last week, facing a fine and embarrassing negative publicity after being exposed for inflating its sales figures in Taiwan. The news marked the latest in a steady string of accounting scandals and other financial misreporting that have plagued overseas-listed Chinese companies for the last 3 years, undermining their credibility and casting a negative shadow on China’s own stock markets. Read Full Post…
GUEST POST-WeChat Story Part 6: Getting Paid
The following is Part 6 in a multi-part series about the rise of WeChat, the popular mobile instant messaging service owned by Tencent.
By Lanie Nie
WeChat has played a key role in Tencent’s (HKEx: 700) recent efforts to build a “federal republic” on the mobile Internet. That interpretation comes from Cheng Lingfeng, a China tech reporter and former Tencent employee, describing Tencent’s strategy of selling stakes to close partners who promote WeChat Payment, a new service that allows users to link their bank cards to their WeChat accounts to facilitate online transaction payments. Such linkage gives WeChat users easy access to selected paid add-on services like shopping, mobile top up and taxi booking.
Read Full Post…
News Digest: August 6, 2014
The following press releases and media reports about Chinese companies were carried on August 6. To view a full article or story, click on the link next to the headline.
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- WH Group (HKEx: 288) Gains as Biggest Pork Producer Debuts in Hong Kong (English article)
- Luxury Car Makers Under Anti-Monopoly Investigation (Chinese article)
- Tesla’s (Nasdaq: TSLA) China Trademark Dispute Ends As 2 Sides Reach Agreement (Chinese article)
- Zhaopin (NYSE: ZPIN) Acquires Online Recruitment Site CJOL.com – Memo (English article)
- SouFun (NYSE: SFUN) Faces Crisis As Shanghai Realtors Refuse To Pay Fees (Chinese article)
- Latest calendar for Q2 earnings reports (Earnings calendar)
Beijing Bans Symantec, Kaspersky; Warns Microsoft
Beijing’s recent campaign against foreign tech firms is picking up more momentum, with word that security software makers Symantec (Nasdaq: SYMC) and Kaspersky Lab have been banned from selling to government agencies. The move continues a trend that has seen Beijing take similar moves against software from Microsoft (Nasdaq: MSFT) and hardware from IBM (NYSE: IBM) over worries that their products could compromise national security.
Meantime in another ominous sign for foreign tech firms, a government ministry that conducts anti-monopoly investigations is warning Microsoft not to interfere with its ongoing probe of the company. Industry watchers will note that the warning from the State Administration of Industry and Commerce (SAIC) comes as an unrelated trial gets set to start for a British-American couple being charged with interfering in a bribery probe into British drug giant GlaxoSmithKline (London: GSK). Read Full Post…
Games: Alibaba’s New Tie-Up, Tencent’s Candy Crush
A year after entering the ultra-competitive online gaming market, e-commerce leader Alibaba is boosting its drive into the space through a major new tie-up with Kabam, a fast-growing American designer of free online games. The move looks squarely aimed at archrival and leading Chinese game operator Tencent (HKEx: 700), which has just made its own major advance in the space with the launch of an officially licensed version of the wildly popular “Candy Crush” game in China. Read Full Post…
