Less than 2 months after the latest flare-up in an ongoing battle for supremacy of China’s e-commerce market, we’re getting word that Tencent (HKEx: 700), a relative newcomer to the sector, may be preparing to turn up the heat again with yet another massive spending blitz. This potential new flare-up, which should come as a surprise to no one, could be particularly worrisome as it shows that the cash-rich Tencent is willing to spend big bucks and fight a long war to win a piece of an already overcrowded Chinese e-commerce market.
Suntech Gets Set to Tackle Debt 尚德着手应对债务问题
Struggling solar cell maker Suntech (NYSE: STP) has just issued a euphemistically upbeat plan on how it intends to “solidify market leadership,” as it tries to return to health amid a prolonged industry downturn that has seen prices plunge more than 70 percent over the last 2 years. But investors are clearly focused on the last part of the plan, specifically discussing how the company intends to deal with nearly $600 million in convertible bonds that will come due in March next year. The process of renegotiating that debt is likely to be a long one, and is hardly guaranteed success without major support from Beijing and other government entities.
Telecoms: ZTE, Apple and China Mobile 电信业：中兴、苹果和中国移动
A wide range of buzz is coming from the telecoms space, led by more reverberations from Washington’s controversial decision to lock out Huawei and ZTE (HKEx: 763; Shenzhen: 000063) from the US telecoms equipment market. China’s 3 major telcos are also making the headlines for other reasons, as they continue to jostle for position in both the 3G wireless and also the fixed-line broadband spaces.
News Digest: October 10 报摘： 2012年10月10日
The following press releases and media reports about Chinese companies were carried on October 10. To view a full article or story, click on the link next to the headline.
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- Japan Car Sales in China Tumble, Hit By Islands Row (English article)
- Tencent (HKEx: 700) E-Commerce to Start 300 Mln Yuan Promotion (English article)
- Suntech (NYSE: STP) Announces Strategy to Solidify Market Leadership (PRNewswire)
- China Telecom (HKEx: 728), Unicom (HKEx: 762) Start Taking iPhone 5 Orders (Chinese article)
- ZTE (HKEx: 763) Says Equipment Safe, and Poses No Security Threat (Businesswire)
Alibaba Under New Merchant Assault 阿里巴巴或面临中小商户新一轮声讨
E-commerce leader Alibaba loves to talk about how the business model for its popular TMall online mall gives it an edge over most of its rivals by letting it focus on its role as a web mall operator while leaving the actual business of managing online stores to third-party merchants. But the company is much less talkative about some of the downsides to such a business model, most notably the issue of quality control for the products and service provided by thousands of merchants that sell their goods on TMall. A sharp and sudden price hike in store rentals fees by TMall last year provoked a sharp backlash from many smaller merchants, creating huge headaches and a publicity nightmare for Alibaba. Now, many of those same small- and medium-sized merchants, known in the industry as SMEs, are complaining once again about new policies that Alibaba says are designed to improve quality and customer service, even as the SMEs argue those policies discriminate against them and lack transparency. (Chinese article)
Qihoo Alliance Offensive Targets Baidu 奇虎掀起联姻潮 欲与百度试比高
Qihoo 360 (NYSE: QIHU) is stepping up its challenge to Baidu’s (Nasdaq: BIDU) dominance in online search, with word that the security software specialist has formed a new alliance with leading online travel firm Ctrip (Nasdaq: CTRP). (English article; Chinese article) This new alliance appears to be part of a clever tactic by Qihoo to form new tie-ups with Internet companies that specifically want to see more competition in the Chinese search market and thus are willing to work closely with Qihoo as it embarks on a new online search initiative. Accordingly, I wouldn’t be surprised to see more such announcements in the months ahead as Qihoo tries to build up its So.com search engine as a viable alternative to Baidu’s own service that now controls around three-quarters of the market.
Huawei, ZTE Face Long US Winter 华为、中兴在美遭遇漫长寒冬
I don’t usually like to write about the same company or issue twice in the same week, but it’s hard to ignore a new report that has just come out of Washington saying US telcos shouldn’t do business with China’s top 2 telecoms equipment makers due to security concerns. Of course people who follow the industry will know that I’m referring to a new Congressional report taking aim at Huawei and ZTE (HKEx: 763; Shenzhen: 000063), 2 of the world’s leading telecoms equipment makers and also 2 of China’s high-tech exporting superstars. The report comes just a day after reports emerged that Huawei was considering an offshore IPO in an attempt to diffuse concerns that its equipment can be used for spying by Beijing (previous post).
News Digest: October 9 报摘： 2012年10月9日
The following press releases and media reports about Chinese companies were carried on October 9. To view a full article or story, click on the link next to the headline.
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- China’s Huawei, ZTE (HKEx: 763) Should Be Kept From US: Draft Congress Report (English article)
- Merchants Have Doubts Over TMall’s New Program Targeting Fake Goods (Chinese article)
- Haier (HKEx: 1169) Says F&P (NZ: FPA) Independent Directors’ Valuation Optimistic (Chinese article)
- Qihoo 360 (NYSE: QIHU) Partners with Ctrip (Nasdaq: CTRP) (English article)
- Cisco (Nasdaq: CSCO) Cuts Ties to China’s ZTE (HKEx: 763) After Iran Probe (English article)
China Telecom, Unicom Rev Up IPTV 电信、联通大举进军IPTV市场
China’s 2 main fixed-line broadband carriers, China Telecom (HKEx: 728; NYSE: CHA) and China Unicom (HKEx: 762; NYSE: CHU), are revving up for a big push into the television market, in what looks like a smart play for a product area that may finally be mature enough to find an audience. My main concern for both of these companies lies in execution, especially for Unicom, which has shown a poor record for implementing new businesses due to organizational dysfunction at the management level. But let’s come back to that issue later, and focus first on the bigger picture that has China Telecom and Unicom putting out tenders for a combined 6.2 million set-top boxes since August as part of their drive to install their IPTV service in millions of Chinese homes. (Chinese article) That number by itself isn’t all too large, but it does seem to indicate that both companies could quickly order more boxes if they find strong demand for their product.
Toyota China Sales Plunge 40 Pct 丰田9月在华汽车销量下降40%
We’ve been hearing for weeks now how bad things for Japanese automakers in China due to diplomatic tensions over a territorial dispute, and now we’re finally starting to see some numbers that underscore just how serious the situation is. So now the questions becomes: How long will this sales crisis last, and who are the most obvious winners and losers? I’ll get to that issue in a moment, but first let’s have a look at the news coming from Toyota (Tokyo: 7203), which said its China sales plunged 40 percent in September as Sino-Japanese tensions flared over the ownership of a small chain of islands known in China as the Diaoyu and in Japan as Senkaku. (English article)
Huawei Mulls IPO to Sooth Critics
Telecoms equipment giant Huawei Technologies is reportedly considering an overseas public listing in a bid to become more transparent and quiet western critics who suspect it’s a spying arm of Beijing. The move would be the latest in a series by Huawei and crosstown rival ZTE (HKEx: 763; Shanghai: 000063) in their ongoing campaigns to win more business in lucrative western markets where they have met with strong political resistance. But while an IPO may excite investors, such a move is unlikely to sway Huawei’s more politically-focused critics who can point to numerous similar cases of major Chinese companies whose publicly listed status hardly means independence from Beijing.
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