China smartphone market quickly becoming saturated
Let’s end the week with a look at some new data on China’s cellphone market, which is quickly becoming saturated with cheap smartphones cranked out by a crowded field of domestic companies. The rush by Chinese firms into the smartphone market over the last 2 years is typical of the herd mentality one often sees in China, almost always leading to classic boom-bust cycles. The smartphone sector was already showing signs of overheating when media reported during the summer that inventory was building up at many smartphone makers. Now the latest figures are showing that sales are slowing sharply for many of those firms, hinting a bust could come soon for players that rely heavily on the domestic market. Read Full Post…
Just days after I said that NQ Mobile (NYSE: NQ) looked like a company to watch after its issue of $172.5 million worth of bonds, infamous short seller Muddy Waters has launched an assault on the software security maker, sparking a sell-off that has wiped out half of its market value. Internet search leader Baidu (Nasdaq: BIDU) is also coming under assault from different quarters, in this case taking heat from company watchers and regulators after promising returns that many believe are unrealistic on its newly launched investment product. Read Full Post…
Leading Chinese chip maker SMIC (HKEx: 981; NYSE: SMI) has just announced a relatively modest $200 million bond offer, hinting that investor interest may finally be returning to this perennial underperformer after years of disappointment. Not very many people even follow SMIC these days, and I’ll admit that I personally still watch the company because I hope that someday it can realize some of the potential that many once held for it. This latest bond offer looks positive because it’s being underwritten by 2 big foreign investment banks, JPMorgan and Deutsche Bank, meaning demand for the notes is coming from market-driven international investors rather than state-run Chinese buyers. Read Full Post…
The following press releases and media reports about Chinese companies were carried on October 25. To view a full article or story, click on the link next to the headline.
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China’s September 2013 Handset Shipments Down 16 Pct From Year Earlier (English article)
The long-awaited spring for New York IPOs by Chinese tech firms is quickly gaining momentum, with online lottery site 500.com and app developer Sungy Mobile making their first public filings for new listings. At the same time, online classified advertising site 58.com has provided new data on its first-ever profits as it prepares to list next week. While this sudden flood of offerings looks good for Chinese tech firms that have been waiting up to 2 years to list, the mini-rush also carries the risk of diluting investor attention and dampening demand for some of the smaller players. Read Full Post…
Chinese media are finally discovering something that I’ve know all along, namely that Starbucks (Nasdaq: SBUX) coffee here is ridiculously overpriced. Some might say a new investigative report from national broadcaster CCTV could be cause for alarm for Starbucks, as previous similar reports have spelled headaches for other big foreign names like Apple (Nasdaq: AAPL), KFC (NYSE: YUM) and McDonalds (NYSE: MCD). But in this case, I’m actually quite encouraged to see the story is actually sparking some healthy and relatively well-informed debate about free markets and the premiums that “luxury” brands should be able to charge for their products. Read Full Post…
High-flying smartphone maker Xiaomi is at the center of 2 recent strings of microblog posts, one touching on an interesting new connection with Facebook (Nasdaq: FB) and the other hinting at an increasingly cozy relationship with struggling online clothing seller Vancl. Interestingly, Xiaomi’s talkative co-founder and chief executive Lei Jun is largely absent from the dialogue in both cases, which each has sensitive overtones, implying that perhaps we could see more news in the weeks ahead. Read Full Post…
The following press releases and media reports about Chinese companies were carried on October 24. To view a full article or story, click on the link next to the headline.
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Samsung (Seoul: 005930) Apologizes To Chinese Consumers For Faulty Phones (Chinese article)
Chinese Lottery Leader 500.com Files for US IPO (English article)
HNA Group Completes Acquisition of GE Capital’s TIP Trailer Services Group (Businesswire)
Alibaba’s TMall Announces Same-Day Delivery Service (English article)
New Oriental (NYSE: EDU) Announces Unaudited Quarterly Results (PRNewswire)
I’ve been watching with interest this week as e-commerce leader Alibaba has discovered a sudden urgency to grow its business in the social networking (SNS) space, with founder Jack Ma leading the charge. In the last few days, media have reported that Alibaba has made a major new acquisition in the sector, and Ma is also trumpeting the importance of the company’s recently launched Laiwanginstant messaging service that will compete with Tencent’s (HKEx: 700) hugely popular WeChat service. All this comes after Alibaba earlier this year signed a landmark agreement to buy a major stake in Sina’s(Nasdaq: SINA) Weibo service, often called the Twitter of China. Read Full Post…
Update: After originally posting this item, a Renren spokesman has gotten in touch to deny there are any talks for asset sales to Baidu beyond the original Nuomi sale.
Baidu (Nasdaq: BIDU) is the subject of a new flurry of news bits, including growing ties with social networking leader Renren (NYSE: RENN) and a new financial services initiative, spotlighting the sudden urgency it feels to grow beyond its core search business. The Renren news bits are the most interesting to me, because they highlight the importance of social media to the growth strategies of most major Chinese Internet companies and could also presage an eventual acquisition. The financial services initiative also reflects the sudden rush by Chinese web giants into this area, though Baidu looks a bit late in its arrival to the space. Read Full Post…
KFC picks India, ignores China, in new milestone announcement
A new announcement from KFC parent Yum Brands (NYSE: YUM) is interesting for what it doesn’t say, spotlighting the fact that the company would prefer not to talk about the many difficulties it has recently faced in China. Anyone who has followed the KFC story closely over the last decade will know that China featured prominently in many of Yum’s announcements during that time, as the market posted consistent double-digit gains that helped to boost Yum’s profits by similar amounts. But lately those gains have evaporated, and KFC has now posted same-store sales declines in China for much of the past year. What’s more, Yum keeps extending its timeline for a recovery, which now isn’t expected until next year at the earliest. Read Full Post…
