In what looks like a big setback for UnionPay, the World Trade Organization has ruled that the financial services network operator has an illegal monopoly that unfairly locks rivals like MasterCard (NYSE: MA) and Visa (NYSE: V) out of the market for settling financial transactions denominated in China’s currency, the renminbi. But while this ruling may represent a victory for Visa and MasterCard in the longer term, I have no doubt that the decision will be meaningless for at least the next few years, as Beijing, even if it decides to comply with the ruling, erects bureaucratic obstacles to make sure that UnionPay maintains its monopoly status for now.
E-Commerce Wars Hit Suning 苏宁沦为电商价格战的新俘虏
Electronics giant Suning (Shenzhen: 002024) has become the latest Internet player to fall victim to China’s bloody e-commerce price wars, issuing a profit warning as companies get set to report their second-quarter results. Suning’s warning shouldn’t really surprise anyone since these price wars have been going on for about a year now. So perhaps the 10 percent drop in Suning shares yesterday — the daily allowable maximum under China’s stock market rules — reflects investor realization of just how bad these price wars have become and fact that Suning will suffer some major profit erosion before the situation finally eases.
News Digest: July 17, 2012 报摘： 2012年7月17日
The following press releases and media reports about Chinese companies were carried on July 17. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════
- Suning (Shenzhen: 002024) Shares Plunge 10 Pct As Website Misses Target (Chinese article)
- Machinists Union Challenges Hawker Beechcraft Sale to Chinese Company (Businesswire)
- US Wins WTO Case Over China UnionPay Bank Card Monopoly (English article)
- Lenovo (HKEx: 992) Aims For Top Global PC Spot This Year, Profits Under Pressure (Chinese article)
- 360Buy Allies with NetEase (Nasdaq: NTES) on Gaming Sales (English article)
- Latest calendar for Q1 earnings reports (Earnings calendar)
Portals Shun Olympics, Baidu’s New JV 门户网站避开奥运，百度新设合资企业
Second-quarter earnings season and the London Olympics won’t begin until next week, but we’re already seeing signs that an ad slowdown is hitting profits at many Chinese Internet companies as they get set to report their latest results. Specifically, media are reporting China’s top 4 portals have decided to skip expensive rights for live coverage of Olympic events, and instead are opting to provide less pricey video-on-demand (VOD) rights that allow Internet users to watch recordings of their favorite sports after the events. (English article)
ZTE: Yet Another Probe as Profit Tumbles 中兴通讯又遭调查
Embattled telecoms equipment maker ZTE (HKEx: 763; Shenzhen: 000063) is probably starting to feel like an ailing hospital patient, following word that it’s coming under yet another investigation in what seems like a never-ending stream of probes by western governments. The recent investigations and other setbacks in both North America and Europe are taking a growing toll on ZTE’s bottom line, with the company warning that its profit dropped sharply in the second quarter and may have even disappeared completely.
Solar Uptick: Buyouts Near? 太阳能行业：并购接近？
A rare piece of upbeat news from mid-sized solar cell maker ReneSola (NYSE: SOL) has had a surprisingly mixed effect on shares from this struggling sector, hinting that investors are no longer looking at news but are rather trying to figure out what lies ahead for this group of companies with deeply depressed valuations. As the sector stabilizes and gets ready to grow again after a devastating downturn that has lasted more than a year, we may start to see both companies and investors taking advantage of extremely low valuations to launch takeover and privatization bids before share prices finally start to rise again.
News Digest: July 14-16, 2012 报摘： 2012年7月14-16日
The following press releases and media reports about Chinese companies were carried on July 14-16. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════
- Baidu (Nasdaq: BIDU), NTT DoCoMo Finalize $22.5 Mln Mobile Content JV (Chinese article)
- ZTE (HKEx: 763) Announces Preliminary Results for H1 2012 (HKEx announcement)
- ReneSola (NYSE: SOL) In 100 MW Deal, Increases FY 2012 Shipment Outlook (PRNewswire)
- Chinese Portals Pass on Olympics Live Broadcast Rights – Sources (English article)
- Sina (Nasdaq: SINA), BesTV Team in Social Networking TV (Chinese article)
Cable Consolidation Gets Subsidy Lift 中国政府为有线电视网络升级提供补贴
Beijing, determined to consolidate the nation’s fragmented cable TV industry by creating a single national operator, is promoting its plan with a new round of subsidies, a move that could ultimately not only benefit not only the new operator but also leading wireless telco China Mobile (HKEx: 941; NYSE: CHL). The fact that China Mobile could benefit from this new subsidy plan seems somewhat ironic, since China Mobile is already one of China’s richest state-run companies, and thus it has little or no need for this kind of cash subsidies from Beijing.
Tom In Rumored Divorce With Skype TOM集团或失去Skype在华代理权
Five or 6 years can be an eternity in cyberspace, which is clearly the lesson that former Internet high-flyer Tom Group (HKEx: 2383) is learning as it moves one step closer to irrelevance with word that its long-time partnership with Skype is on the verge of breaking up. That divorce would represent the end of one of its last remaining tie-ups with major western media firms that helped propel the company to fame nearly a decade ago.
Growth Slows at the China Lodge 汉庭酒店增长放缓
China’s slowing economy is taking a toll on the nation’s hotel sector, where growth has dipped solidly into the single digit percentage range in the latest preliminary results for China Lodging Group (Nasdaq: HTHT), operator of the Hanting and Starway brands. Investors were clearly unhappy about these latest results, which are likely to be reflected throughout the industry when China Lodging and its 2 main listed rivals, Home Inns (Nasdaq: HMIN) and 7 Days (NYSE: SVN), report their results in the weeks ahead.
News Digest: July 13, 2012 报摘： 2012年7月13日
The following press releases and media reports about Chinese companies were carried on July 13. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════
- China’s Cable Operators to Receive Subsidies for Broadband – Source (English article)
- China Lodging Group (Nasdaq: HTHT) Announces Preliminary Q2 Operating Results (PRNewswire)
- Tom Group (HKEx: 2383) May Lose Skype China Operating Rights – Source (English article)
- Foreign Ministry Responds to EU Probe Against Huawei, ZTE (HKEx: 763) (Chinese article)
- ZTE (HKEx: 763) Says to Release Most Advanced Gaming Smart Phone in 6 Days (Chinese article)
