Western alcoholic beverage giant SABMiller (London: SAB) is making headlines for its newly announced deal to buy a major Chinese beer maker, raising the interesting possibility that other foreign firms could soon make bids for makers of traditional baijiu liquor. For those who don’t follow the China liquor market too closely, baijiu makers have been under pressure since the beginning of the year, when media first began reporting that their products contained unsafe levels of plasticizers. The ongoing crisis could provide some interesting buying opportunities for foreign alcoholic beverage makers like SABMiller and Diageo (London: DGE), which are eying a bigger share of China’s massive market for alcoholic beverages.
International Board: The Endless Wait 国际板：无休止的等待
Since China first announced its plans to launch an International Board several years ago, a group of overseas-based companies that do big business in China have been waiting patiently to list on the board to raise both cash and their profiles on the mainland. Many of those companies were genuine foreign firms, such as banking giants HSBC (HKEx: 5; London: HSBA) and Standard Chartered (HKEx: 2888; London: STAN); but an equally large group were Chinese companies like mobile carrier China Mobile (HKEx: 941; NYSE: CHL) and PC maker Lenovo (HKEx: 992), which incorporated overseas so they could list their shares in Hong Kong. Now it appears that at least some of the Chinese companies that wanted to list on the International Board are losing their patience with the slow progress, with word that Lenovo’s parent and telecoms carrier China Telecom (HKEx: 728; NYSE: CHA) may both be exploring more traditional A-share listings for some of their units.
AsiaInfo: Buyout Dead? 亚信科技：收购告吹？
Despite reporting solid profit growth, telecoms software maker AsiaInfo’s (Nasdaq: ASIA) latest quarterly earnings report was more significant for what it did NOT contain, namely any mention of an ongoing plan to sell the company. Does this mean the deal is dead? In my view, the lack of any news on what once looked like a lively bidding war could indeed mean that buyers are no longer interested in AsiaInfo, perhaps because the company’s financials weren’t as attractive as many thought they might be or because the company wanted too big a premium for its shares.
News Digest: February 6 报摘：2013年2月6日
The following press releases and media reports about Chinese companies were carried on February 6. To view a full article or story, click on the link next to the headline.
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- Commerce Ministry Officials In Europe to Negotiate For Huawei, ZTE (HKEx: 763) (Chinese article)
- SABMiller (London: SAB) JV To Buy Chinese Breweries For $863 Mln (English article)
- Yum (NYSE: YUM) CEO Says Time, Not Cash, To Cure China Sales Drop (English article)
- Huawei, Microsoft (Nasdaq: MSFT) Co-Develop Customized W8 Phone For Africa (Chinese article)
- Perfect World (Nasdaq: PWRD), Lenovo (HKEx: 992) Partner on Smart TV Game (English article)
China Mobile’s 4G Word Games 中国移动的4G“文字游戏”
I don’t know about other people, but I’m getting increasingly tired of China Mobile’s (HKEx: 941; NYSE: CHL) non-stop string of word games as it aggressively pushes the country’s telecoms regulator to quickly issue 4G licenses that will allow it to offer a commercial 4G wireless service. But perhaps my frustration would be more appropriately directed at the telecoms regulator itself, the Ministry of Industry and Information Technology (MIIT), whose massive bureaucracy means it often takes ridiculously long periods to approve just about anything, putting China’s telecoms market at a major disadvantage to global peers.
Sinopec Buys, Investors Pay 中石化并购 投资者买单
China’s oil and resource companies have been on a buying binge over the last year, snapping up global assets at what look like relative bargains from cash-strapped global companies under pressure to raise money. Beijing has been paying the bills for most of the purchases so far, but the latest announcement from oil refining giant Sinopec (HKEx: 386; Shanghai: 600028; NYSE: SNP) indicates that China may be testing the waters to see if investors are willing to help pay some of the bill in this global buying binge. If that’s the case, Beijing may soon face some major resistance from its major resource companies’ shareholders, who are likely to question whether Sinopec and other Chinese resource firms are getting good value for their money.
Baidu, Sohu Results: Ad Market Stabilizing 百度、搜狐财报：广告市场趋稳
Baidu (Nasdaq: BIDU) and Sohu (Nasdaq: SOHU) are kicking off the China Internet earnings season with results that don’t look particularly exciting but do appear to show some early signs that China’s collapsing advertising market may be near a bottom. If that’s the case, look for the situation to stabilize and start to rebound as early as the second quarter for advertising-dependent firms, perhaps providing a good buying opportunity as spending starts to pick up around the middle of the year.
Shanghai Street View: Wedding Excess 沪经动向：婚礼过度
This week I thought I’d write about a topic that’s become quite popular these last few years, and also quite expensive and a bit excessive in my view: the big-ticket wedding. Before I start with the news item that was the basis for this column, the controversial opening of designer Vera Wang’s first China bridal shop here in Shanghai, I’d like to start by talking about the many things that I like about Chinese weddings. Like their counterparts in the west, Chinese weddings can come with a wide range of traditions for the bride and groom to choose from, which are both fun and add to the air of festivity with minimal extra cost.
News Digest: February 5 报摘：2013年2月5日
The following press releases and media reports about Chinese companies were carried on February 5. To view a full article or story, click on the link next to the headline.
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- Baidu (Nasdaq: BIDU) Announces Q4 And Fiscal Year Results (PRNewswire)
- Yum’s (NYSE: YUM) China Woes Slam Sales And Profits (English article)
- Sinopec (HKEx: 386) Says To Place HK$24 Bln Worth of Shares (HKEx announcement)
- Sohu.com (Nasdaq: SOHU) Reports Q4 and Fiscal Year Financial Results (PRNewswire)
- China Mobile (HKEx: 941) Launches TD-LTE Commercial Trials in Hangzhou (English article)
Cars: BAIC IPO, Geely Goes Electric 北汽将上市 吉利进军电动车
News bits from the automobile space indicate the long-awaited IPO by Beijing-based car maker BAIC Motor may finally be coming soon, while the struggling Geely (HKEx: 175) is chasing a couple of distracting new initiatives in the electric vehicle and overseas markets. Let’s start with the BAIC news, as that looks the most interesting since it could provide investors with an interesting IPO opportunity later this year.
Baidu-Qihoo Spat Heats Up 奇虎和百度硝烟再起
The unspoken war between online search leader Baidu (Nasdaq: BIDU) and challenger Qihoo 360 (NYSE: QIHU) is taking on a new wrinkle with word that Baidu may be trying to get its advertisers to stop using Qihoo’s popular web browser. I personally find this war of words quite entertaining, though I do also think that Qihoo could better spend its time focusing on doing business rather than accusing others of trying to thwart it through this kind of underhanded tactic. Qihoo, after all, is the master of the underhanded business tactic, which has resulted in numerous lawsuits and complaints being leveled against the company over the years.
