It’s only appropriate that I end this week with one more story on the bloody price wars in China’s e-commerce space that have dominated headlines these past few days, this time taking a look at the just-released quarterly results of Dangdang (NYSE: DANG), the only major publicly traded online merchant. Dangdang saw its loss more than quadruple in the quarter, as its marketing costs soared and margins crumbled due to all the price wars. (results announcement) But in an ominous sign that the company is prepared for a long battle, it also trumpeted the fact that it has big cash reserves that should enable it to weather the price wars for many quarters to come. Meantime, local media are also reporting that Jingdong Mall, one of Dangdang’s biggest and most outspoken rivals, is taking longer to pay its suppliers, in what could be the latest sign of distress among e-commerce companies. (English article)
Toys R Us: New China Toy Story? 玩具反斗城：新的中国玩具总动员？
It’s Friday and almost the weekend, so I thought I’d take a break from all the e-commerce price wars and woes at solar panel maker Suntech (NYSE: STP) that have dominated headlines this week to take a look at something a little more fun, namely toys. Specifically, leading US toy store operator Toys R Us has announced its first big China expansion since buying out a majority stake from the partner in its Asia operations about a year ago. (company announcement) While I have fond memories of this retailer, I’m predicting this new push will ultimately fail due to a poor game plan and lack of brand recognition.
News Digest: August 17, 2012 报摘： 2012年8月17日
The following press releases and media reports about Chinese companies were carried on August 17. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════
- China Mobile (HKEx: 941) Announces Interim Results (HKEx announcement)
- Dangdang (NYSE: DANG) Announces Q2 Results (PRNewswire)
- Unicom (HKEx: 762), China Telecom (HKEx: 728) May Sever Xiaomi Ties – Sources (English article)
- Silicon Valley Bank, Pudong Development Bank (Shanghai: 600000) JV Opens (Chinese article)
- Toys“R”Us Continues China Expansion with Opening of First Stores in Beijing (Businesswire)
- Latest calendar for Q2 earnings reports (Earnings calendar)
Shanghai Street View: Snack Capital Rising
Shanghai is no stranger to imported greasy snack foods, with Cantonese roast meats becoming all the rage these past few years on the booming popularity of Hong Kong-style diners known as cha canting. But clearly the city still yearns for more oily eats from outside, this time with the new arrival of Taiwan’s premier maker of deep fried chicken fillets.
Suntech CEO Resigns, Haier Hits Jingdong 尚德电力CEO辞职 海尔停止与京东合作
I don’t like to write too much about the same topics in a single week, but I can’t really ignore separate breaking developments at solar cell pioneer Suntech (NYSE: STP) and in the e-commerce space that could be critical for the future of each. In the former case, Suntech has just announced the resignation as CEO of Shi Zhengrong, the company’s founder who was once lauded as a visionary when Suntech became China’s first publicly listed solar panel maker in 2005. (company announcement) In the latter case, leading Chinese home appliance maker Haier has announced it is severing its relationship with Jingdong Mall, also known as 360Buy, as the temperature continues to rise in a rapidly escalating price war that has broken out this week with rivals Suning (Shenzhen:002024), Gome (HKEx: 493) and others. (English article)
NetEase at a Crossroads 网易走到十字路口
After piling through the mountain of corporate earnings that have just come out in the last 24 hours, I’ve decided to focus on online game veteran NetEase (Nasdaq: NTES), which appears to be at a critical juncture that could simply mark a pause in its recent rise or be the beginning of a longer-term decline. NetEase has been one of the most resilient companies throughout the current confidence crisis for US-listed China stocks, perhaps due to its status as one of China’s oldest publicly listed Internet firms and also due to solid performance from its core online game business.
News Digest: August 16, 2012 报摘： 2012年8月16日
The following press releases and media reports about Chinese companies were carried on August 16. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════
- Haier Terminates Partnership with 360Buy/Jingdong Mall (English article)
- Tencent (HKEx: 700) Announces Q2, H1 Results (HKEx announcement)
- Sina (Nasdaq: SINA) Reports Q2 Financial Results (PRNewswire)
- Suntech (NYSE: STP) CEO Steps Down, CFO to Take Top Job (English article)
- NetEase (Nasdaq: NTES) Reports Q2 Unaudited Financial Results (PRNewswire)
- Latest calendar for Q2 earnings reports (Earnings calendar)
War of Words, Wal-Mart Heat Up E-Commerce 中国电子商务价格战愈演愈烈
I wrote yesterday that China’s big e-commerce names are showing no signs of easing up their fierce battle for market share (previous post), and today we’re getting news bites from industry giant Jingdong Mall and global retail titan Wal-Mart (NYSE: WMT) that indicate the situation could get considerably worse before it starts to improve. Leading the news today are the latest comments from Jingdong Mall’s talkative CEO Liu Qiangdong, who has suddenly decided that profits aren’t important for his recently established electronics business, at least not for the next 3 years. (English article; Chinese article) Meantime, in separate news Wal-Mart has won approval from China’s regulator for its previously announced plan to boost its minority share in e-commerce firm Yihaodian to a majority stake, meaning we could soon see a major new offensive from Yihaodian in this already crowded and massively money-losing market. (Chinese article)
Resource Buying Binge Hits Speed Bump 中国海外资源收购面临减速
A plan by aluminum giant Chalco (HKEx: 2600; Shanghai: 601600) to buy a Mongolian-focused mining company is reportedly on the verge of collapse due to politics, a development that could have big implications for China’s recent buying spree for global resource assets. For anyone who hasn’t been paying close attention, Chinese energy and resource firms, from oil and coal giants to gold and iron ore miners, have embarked on a multibillion-dollar spending spree over the last few years to feed the country’s growing economy. The buying binge has gained momentum in the last year, as cash-rich Chinese companies, with strong support from Beijing, have purchased assets from cash-challenged international owners still struggling as a result of the global economic downturn. Now, at least one country that has become a favorite destination for Chinese buying, Mongolia, appears to finally be saying “no”.
Sinking Suntech Wins Symbolic Victory 沉沦中的尚德赢得象征性胜利
Troubled solar panel maker Suntech (NYSE: STP) is trying to calm worried investors with news of a victory in a fraud case that could leave it liable for more than $600 million. The only problem is, the company itself may not survive long enough to enjoy the victory, which has come in the courtroom in this fast-evolving case. Suntech shareholders, who bid down the company’s stock to all-time lows after word of the fraud first came out, were largely indifferent to news of the courtroom victory, bidding the stock up a tiny 2 percent to remain near its all-time low.
News Digest: August 15, 2012 报摘： 2012年8月15日
The following press releases and media reports about Chinese companies were carried on August 15. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════
- Mongolia-Focused Miner SouthGobi (HKEx: 1878) Expects Chalco to Drop Takeover Bid (English article)
- Mengniu (HKEx: 2319) in Buyout Talks With KKR-backed China Modern Dairy: Report (English article)
- Jingdong Mall to Maintain Zero Gross Profit on 3C for 3 Years (English article)
- Suntech (NYSE: STP) Initial GSF Litigation Succeeds (PRNewswire)
- Regulator Gives Conditional OK For Wal-Mart’s (NYSE: WMT) Yihaodian Stake Increase (Chinese article)
- Latest calendar for Q2 earnings reports (Earnings calendar)
