The following press releases and media reports about Chinese companies were carried on August 1. To view a full article or story, click on the link next to the headline.
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- Gaopeng, FTuan Combine to Form New Online Auction Company Groupnet (Chinese article)
- Hanlong Says China Approves $1.3 Bln Bid for Australia’s Sundance (Sydney: SDL) (English article)
- Alibaba’s TMall 3C, Appliance Transactions Up 200% YoY in H1 2012 (English article)
- Lenovo (HKEx: 992), EMC (NYSE: EMC) in Strategic Tie-Up, to Form JV (Chinese article)
- Dianping Says Mobile Users At More Than 40 Mln, Figure Surpasses PC Users (Chinese article)
- Latest calendar for Q2 earnings reports (Earnings calendar)
It’s been less than 2 weeks since Chinese oil major CNOOC (HKEx: 883; NYSE: CEO) announced its blockbuster plan to buy Canadian oil company Nexen (Toronto: NXY), and already we’re seeing swirls of controversy emerging in reports of insider trading and the hiring of political heavyweights around the deal. But I’m fairly certain these tales of minor intrigue are just a preview to the main show, which will see Canada and the US launch national security investigations that will ultimately sink this $15 billion deal.
Here’s a word of caution to anyone who might have thought that China’s bloody e-commerce wars may start to ease in the second half of the year as companies start to run out of cash: Don’t get your hopes too high. That’s my main conclusion after looking at newly released first-half results for Suning (Shenzhen: 0020204), one of China’s top electronics retailers that seems determined to sacrifice short-term profits in its aggressive drive to build up its fast-growing online business. The big problem in China’s e-commerce wars, which began more than a year and a half ago, has been that most players have access to huge reserves of cash from outside sources and all have indicated they will continue to use that money to fund operations no matter how much their loses mount.
Just when you thought the struggling solar sector’s prolonged downturn had reached bottom, industry leaders Suntech (NYSE: STP) and Trina (NYSE: TSL) have put out announcements that seem to indicate they used creative accounting to hide the magnitude of their suffering. While these latest 2 announcements have clearly spooked investors, I’m going to take a somewhat contrarian view and say these confessions may actually be a positive sign for an industry suffering through a downturn that has lasted nearly a year and a half now, sending all major players deeply into the red. My reason is simple, namely that big players like Suntech and Trina are confessing to these problems because they think the worst of the downturn is behind them, and they want to clean up their balance sheets to position themselves for a fresh start when a recovery begins.
Amid a growing wave of setbacks for telecoms equipment maker ZTE (HKEx: 763; Shenzhen: 000063), I thought it might be interesting to look at the company’s stock and whether it might be a good time to buy shares for a firm that seems to have good long-term potential despite its recent string of negative news. A quick look at the numbers leads me to conclude that despite losing nearly 60 percent of their value over the last 52 weeks, ZTE shares are probably still overpriced and are unlikely to make any major gains from their current levels over the next year.
Instead of lamenting the latest blow to the embattled solar sector that this time is coming from Europe, I’m going to take a different approach today and say that perhaps the ongoing flood of resistance from the west towards Chinese solar subsidies could actually have some positive long-term effects. The reason is this: Beijing, for all its good intentions, has shown it can throw money at developing industries to quickly establish big new manufacturers with major production capabilities. But those fast-rising powerhouses tend to be relatively bad at innovation, with many of the major new advances in the solar sector still coming from the west even as a growing number of players in the US and Europe go bankrupt.
I’m going to break with my usual style of starting each posting with the news, and say that shares of leading online travel site Ctrip (Nasdaq: CTRP) look like quite a bargain to me based on the non-stop sell-off of a stock for what looks like quite a solid company to me. That sell-off continued on Wednesday, when Ctrip shares lost 10 percent of their value after the company reported earnings that showed the overheated competition in China’s online travel space continues. (
I read with amusement this morning a report stating that Baihe, one of China’s smaller social networking sites, is still letting people register under any name they choose, even though Beijing rolled out a controversial “real name registration” system months ago designed to curtail rumor mongering. The report, which looks credible, reflects the very real fact that such real name registration has been difficult if not impossible for not only Baihe but also much bigger names like Sina (Nasdaq: SINA) and Tencent (HKEx: 700) posing a very real risk for these Internet titans if and when Beijing decides to enforce the real name rule, or even worse, to punish companies that have failed to comply.
