The following press releases and media reports about Chinese companies were carried on November 7. To view a full article or story, click on the link next to the headline.
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- Yihaodian Makes Executive Adjustments As Walmart (NYSE: WMT) Team Enters (Chinese article)
- Legislator in Canada’s Ruling Party Blasts CNOOC (HKEx: 883) Bid for Nexen (English article)
- HiSoft (Nasdaq: HSFT), VanceInfo (NYSE: VIT) Shareholders Approve Merger (PRNewswire)
- Dow (NYSE: DOW) Opens Photovoltaics Films Application Lab in Shanghai (Businesswire)
- LDK Solar (NYSE: LDK) and Sumitomo Agree To Terminate Contract (PRNewswire)
- Latest calendar for Q3 earnings reports (Earnings calendar)
Recent gains in online search by Qihoo 360 (NYSE: QIHU) and Sohu’s (Nasdaq: SOHU) Sogou are in the headlines today, highlighting the challenges industry leader Baidu (Nasdaq: BIDU) is facing from a new rival that is quickly gaining momentum and an older rival that also appears to be gaining some traction. At the center of the story is new data for October showing that Qihoo controlled nearly 10 percent of the China search market, just 3 months after the company launched an innovative new search engine. (
Three of China’s leading tech companies have just posted results, with online travel services firm Ctrip (Nasdaq: CTRP), chip maker SMIC (HKEx: 981) and web portal Sohu (Nasdaq: SOHU) all providing reports with very mixed messages. But perhaps most interesting is the fact that shares for all 3 firms rallied sharply in response to the reports, in the latest sign that investors may finally be ready to return to this battered group of companies that has suffered for nearly 2 years due to a series of accounting scandals. If that’s the case, we could perhaps be looking at a nice rally for shares of many firms, especially some of the sector leaders, and we could also see a flurry of new IPOs following a hiatus of more than a year.
Fresh on the release of disappointing quarterly results, online search giant Baidu (Nasdaq: BIDU) is providing yet another news bit that looks like a disappointment on the surface but could be paving the way for an interesting new tie-up in the fast-growing online video space. Company watchers will know I’m talking about Baidu’s latest aborted partnership outside its core search business, with word that the company is buying out Providence Equity Partners from their online video partnership called iQiyi (
A couple of interesting news bits are coming from the auto space, where a top foreign website operator is buying into the China car story, and where 2 major domestic manufacturers are set to announce a new tie-up. The former news is seeing US-based AutoTrader purchase a stake in Chinese peer BitAuto (Nasdaq: BITA), reflecting the arrival of a new generation of auto-related foreign firms to the fast-growing Chinese auto market; meantime, the second news is seeing a new R&D tie-up between Chery Automobile and Guangzhou Auto (HKEx: 2238), reflecting the industry’s overheated state and perhaps signaling the resumption of a stalled but much-needed consolidation.
Another food safety scandal made headlines in China last week, this time when the dairy unit of Shanghai’s Bright Food was fined after its products were found swirling at the center of a recent string of controversies. But unlike previous scandals, this one involved a company with major global aspirations, as reflected by Bright’s recent string of overseas acquisitions. The fact that China’s first global food conglomerate may be a food safety laggard is hardly a message that Beijing should want to send the world, and will only make skeptical Westerners wary of Chinese food products. To prevent that from happening, which would hurt not only Bright but also future Chinese global aspirants, Beijing should seriously consider taking stronger actions against this globally minded company.
A flurry of fund-raising news is making the headlines today, showing that private equity and venture capitalists are still hard at work investing in China, even as many of their traditional favorites in the overheated Internet space are getting the cold shoulder. At the same time, the inevitable has finally happened with the first concrete report that cash-challenged clothing retailer Vancl has re-started its long-delayed IPO process, with an aim of making a public listing in New York potentially by the end of this year.
I’ll finish this Friday by taking a look ahead to next week, which should see the creation of a Chinese IT outsourcing leader when shareholders are likely to approve the combination of HiSoft (Nasdaq: HSFT) and VanceInfo (NYSE: VIT), the nation’s top 2 listed firms. I hesitate to use the word “giant” to describe this newly merged leader, as it will still be relatively small with a modest $670 million in annual revenue and a market capitalization of just under $700 million. By comparison, Indian IT outsourcing giant Infosys (Mumbai: INFY) expects to earn over $7 billion in revenue for its current fiscal year, meaning the new HiSoft-VanceInfo will be less than a tenth as big.
