News Digest: March 13, 2012 报摘： 2012年3月13日

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The following press releases and media reports about Chinese companies were carried on March 13. To view a full article or story, click on the link next to the headline.

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◙ Youku (NYSE: YOKU), Tudou (Nasdaq: TUDO) to Create China’s Top Online Video Company (PRNewswire)

◙ China Vanke (Shenzhen: 000002) 2011 Profit Up 32% on Rising Mass-Mkt Home Sales (English article)

◙ China’s Haitong Eyes $1.5 Billion HK Listing in April: IFR (English article)

◙ Suntech (NYSE: STP) Sets World Record 20.3% Efficiency for Pluto Cell Technology (PRNewswire)

◙ NetEase (Nasdaq: NTES) Portal Unit Chief Li Yong to Leave Next Month (Chinese article)

◙ Latest calendar for Q4 earnings reports (Earnings calendar)

Tudou Plus Youku: Two Small Potatoes

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Note to readers: This article was written and published on Tuesday, March 13, in Hong Kong’s Economic Journal, but I’m just posting it today (Thursday) on  my blog as part of my agreement with them.

It’s not often that mergers happen among publicly traded companies in China’s crowded Internet space, so I’m not even sure where to begin in discussing the just-announced deal that will see leading online video site Youku (NYSE: YOKU) buy rival Tudou (Nasdaq: TUDO) to form an undisputed domestic leader in online video. (company announcement) On paper and in theory the deal sounds quite attractive, combining China’s biggest and second biggest video sharing sites in an interesting marriage between Youku’s more corporate style and Tudou, which has a much more entrepreneurial background under the leadership of outspoken founder Gary Wang. But the reality is much less interesting, with this newly merged company still a relatively small entity likely to face numerous challenges going forward. For Tudou shareholders at least, the deal looks quite sweet. After seeing Tudou shares sink steadily to lose about half of their value following the company’s initial public offering last August, investors who had enough patience to hold on will get a rare premium of 38 percent to the company’s original IPO price, and an even juicier 160 percent to its last closing price before the deal was announced. Investors bid Tudou shares up by nearly that amount in Monday trade after the deal was announced, in a jump that should surprise no one. But perhaps more telling, Youku shares also rose 27 percent, a jump partly due to excitement about this new industry leader but also, in my view, because many believe the new company could itself soon become an acquisition target. At the end of the day, the deal itself is relatively tiny, valuing Tudou at just over $1 billion even after the big premium. That, combined with Youku’s own market value of $2.85 billion, means the entire merged company will be worth just under $4 billion — hardly a figure to get anyone too excited, and still trailing most other big Chinese Internet names like Sina (Nasdaq: SINA), NetEase (NTES) and well behind Internet search leaders Baidu (Nasdaq: BIDU) and Tencent (HKEx: 700). Youku now controls about 22 percent of China’s online video market and Tudou another 14 percent, meaning the combined company will still control less than half of this highly fragmented space. Both Youku and Tudou are also currently losing money, though this deal could help them move to profitability more quickly than each might have done as an individual company. Still, both companies’ latest quarterly results are hardly reassuring. Youku saw its loss actually widen 32 percent in the fourth quarter from a year earlier, not the best sign for a company aiming for profitability. Tudou, meantime, also saw its fourth-quarter loss balloon ten-fold from a year ago, after it notched an unexpected profit in the third quarter. The situation doesn’t look set to improve anytime soon, with a looming advertising slowdown for the broader Internet market also likely to hurt video sites in general, since advertisers looking for the most effective channel for their money are likely to skip those sites in favor of more effective platforms like Sina’s popular web portal and Baidu’s sector-leading search page. From the perspective of someone who has watched China’s Internet space for years, I have to say that I like this deal from a historical perspective as it represents one of the largest friendly mergers to date of two companies that strongly complement each other. But from the perspective of an investor, I honestly can’t get too excited about this deal, since both Youku and Tudou are ultimately just little players in China’s huge Internet realm that will quickly find that one small potato plus another small potato still equals a small potato. Furthermore, both companies have a number of factors working against them, including bottom lines moving in the wrong direction, potential integration issues of 2 very different corporate cultures, and a looming slowdown in advertising, their key revenue source. If I were a gambling man, I would bet that this new merged company will face a number of issues in the next year, but could ultimately still reward investors if it gets acquired by an even bigger company in the next 2 years, much the way that Google (Nasdaq: GOOG) purchased Youtube.

Bottom line: The Youku-Tudou merger is notable for setting a precedent, but will ultimately still create a small Internet player most likely to get purchased itself in the next 2 years.

Related postings 相关文章:

◙ Regulator Eyes Online Video in Ad Crackdown 广电总局或限制视频网站广告

◙ Tudou-Sina Tie-Up: More to Come？ 土豆网联手新浪

◙ Tudou Surprises With Profit, Licensing Deal 土豆网意外扭亏为盈视频分享市场的好兆头

Telecoms Infrastructure Prepares to Open 中国电信基建市场或更开放

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I’ll wrap up this sunny Monday morning in Shanghai with a look at a subject that’s a bit techie but of big interest to me and global telcos, namely the subject of China’s largely closed telecoms infrastructure market where change could be coming soon. Longtime industry watchers will recall that foreign telcos running the range from AT&T (NYSE: T) in the US to Europe’s Vodafone (London: VOD) held out big hopes for the China market after the country officially joined the World Trade Organization (WTO) in 2001. Despite making vague commitments to open the market, China made it extremely difficult and unprofitable for the few foreign ventures it allowed in the space, meaning that today the Chinese telecoms service industry is still dominated by domestic companies, most notably the country’s 3 major telcos, China Mobile (HKEx: 941; NYSE: CHL), China Unicom (HKEx: 762; NYSE: CHU) and China Telecom (HKEx: 728; NYSE: CHA). Now Chinese media are reporting that the nation’s top telecoms regulator, the head of the Ministry of Industry and Information Technology (MIIT), said late last week in Beijing that the government has officially made boosting private investment in telecoms infrastructure part of its new policy, and the regulator is now drafting specific details to implement that plan. (English article) It’s obviously still too early to say if this new policy will change anything, but clearly there could be a huge new opportunity for foreign telcos to build or operate networks and related infrastructure like data centers. AT&T was one of the first to enter the market even before China entered the, but its operation — which is now part of French-American company Alcatel Lucent (Paris: ALUA) — was always limited to the Shanghai market and thus was never able to compete very effectively, especially for Chinese customers. Vodafone also held out big hopes for the market about a decade ago when it made a multibillion dollar investment in China Mobile when the country’s top mobile carrier made its landmark public listing in Hong Kong. But again, that investment never helped Vodafone make any inroads into China, with the result that Vodafone finally ended up selling its China Mobile stake in 2010. Many western companies have given up on China in the current climate, but clearly there’s big opportunity for profits from a market that is both the world’s largest by mobile subscribers and Internet users. If this new plan moves forward, which looks likely based on the minister’s comments, look for some new investment guidelines perhaps as soon as the end of the year. If that happens, look for a flurry of new telecoms projects from the likes of globla players like AT&T and Vodafone, as well as regional players like Korea’s SKTelecom (Seoul: 107670), Singapore’s Singtel (Singapore: ST) and Taiwan’s Chunghwa Telecom (Taipei: 2412) starting in 2013.

Bottom line: A proposed opening of China’s telecoms infrastructure market could result in a flurry of deals by regional and global telcos in China as soon as next year.

Related postings 相关文章:

◙ China Mobile Eyes New Nat’l Cable Network 中国移动有望携手中国广播电视网络公司

◙ China Telcos In New Drives at Home, Abroad 中国三大电信运营商海内外发力

◙ Telecoms: Huawei Quits Iran, Broadband Probe Continues 中国电信业三大热门事件

Vipshop Takes Lead in IPO Race 维品会或成为今年首家赴美上市中国企业

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The race to make China’s first New York IPO of 2012 is nearing the finish line, with online discount retailer Vipshop emerging as the likely winner after getting off to a late start.The listing will mark not only the first Chinese IPO in New York this year, but also the first in months following disastrous debuts for a few companies that launched offerings last summer at the height of a confidence crisis towards US-listed Chinese stocks after series of accounting scandals. I previously said that growing signs are emerging that the worst of the crisis has passed (previous post), and at least the initial response to Vipshop’s offering appears to confirm that trend. According to a domestic media report, Vipshop has set the price range for the offering at $8.50 to $10.50 per share, meaning it would raise $95 million at the low end of the range and up to $120 million if it can get the highest price. (Chinese article) This range is quite significant, as it is unchanged from Vipshop’s announcement in its first public filing that it planned to raise up to $120 million from the IPO. (previous post) That means that investor reception to the offering was within expectation, unlike last year when many companies had to sharply scale back their capital raising plans after receiving weak or no investor demand at the height of the crisis. Online video site Tudou (Nasdaq: TUDO) became a symbol for how bad things were when it went ahead with its Nasdaq IPO despite awful sentiment last August, with its shares tumbling 12 percent on their first trading day. They continued their downward spiral after that, along with most other US-listed China firms, and now trade at just over half their IPO level. Vipshop became China’s second company to file for a New York IPO last month, following another application by car rental specialist China Auto which planned to raise up to $300 million. Online entertainment specialist Shanda has also filed for an IPO for its Cloudary online literature unit, but the Vipshop plan now looks like the furthest advanced and thus the likely winner. I would expect to see it price near the bottom end of its range as some investor skepticism remains, with its shares likely to trade flat on their debut. But even that kind of performance would be a huge improvement over last year, and would likely spark a flurry of refilings for many of the IPOs that got pulled last year as companies rush to take advantage of a new window of improved sentiment. If that happens, look for companies like online clothing retailer Vancl to file in the next 2 months, and even possibly from group buying leader LaShou, which is reportedly preparing to refile for an IPO after its previous plans also ran into trouble last year.

Bottom line: Vipshop’s New York IPO, the first for a Chinese firm this year, is likely to price near the bottom of its range, but would still mark a sign of improving investor sentiment for China stocks.

Related postings 相关文章:

◙ Vipshop Vies For First Internet Listing of 2012 唯品会欲在赴美上市电商公司中力拔头筹

◙ Debut Offshore IPO Looks Weak, But Not So Bad 阳光油砂上市首日表现差强人意

◙ Confidence Crisis Easing For US China Stocks 中国概念股信任危机缓和

Geely Eyes Risky New Luxury Route 吉利欲走有风险的豪华车路线

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Some odd plans discussed by car maker Geely (HKEx: 175) last month with regards to its Sweden-based Volvo unit are starting to make a bit more sense now, following a new agreement that appears to mark a major shift in direction for Geely’s plans to tap domestic demand for luxury autos. The new deal announced late on Friday will see Geely use Volvo technology to develop a new car brand just for China, which an executive later said will be a luxury brand. (company announcement; English article) This deal comes just a month after Geely said it would form a joint venture with Volvo to form a new brand for the China market, a move that looked strange since 1) Geely already owned Volvo and thus a joint venture seemed unnecessary; and 2) both Geely and Volvo already enjoy their own strong brands, making the creation of a new brand also seem unnecessary. (previous post) When Geely purchased Volvo a couple of years ago, Geely founder Li Shufu detailed big plans to build 2 major new factories to build Volvos in China, aiming to position it as a luxury name despite Volvo’s decidedly middle-range reputation in the rest of the world. Volvo managers reportedly strongly opposed the luxury image, setting the stage for what looked like an internal battle for the soul of the Swedish car maker that had fallen on hard times when Geely purchased it from Ford (NYSE: F) in 2010. This latest deal announcement looks like the 2 sides have reached a compromise that will allow Geely to use Volvo’s superior technology to develop a new luxury brand, while leaving the actual Volvo name intact as a solid mid-tier brand. As a result of this compromise, I would expect the 2 big new factories now being built by Geely to focus equally on manufacturing both Volvos and the new luxury brand, and I wouldn’t be surprised if many of the new models from this new brand look very similar to or are even identical with Volvo models. In fact, US car makers have used this approach in the past, importing cars from Japanese companies and then selling them under their own brand. If this is the approach that Geely and Volvo will take, then it actually looks quite interesting, allowing the pair to develop a new luxury brand that they could potentially export to the rest of the world. Of course, the big risk is that developing a new brand is very costly and can take years, and right now Geely is buried very deeply in debt from the original Volvo deal and may not have the cash needed for such a campaign. Then there’s the very real chance that Chinese buyers may never accept this new luxury brand when it comes. At the end of the day, I like this initiative but would say it faces some major obstacles and probably stands just a 50 percent chance of success. If it fails, it could easily end up bankrupting both Geely and Volvo.

Bottom line: Geely’s new plan to co-develop a new luxury brand using Volvo technology stands a 50 percent chance of success, but could leave Geely bankrupt if it fails.

Related postings 相关文章:

◙ Geely Leans on Struggling Volvo 吉利依靠处于困境中的沃尔沃

◙ Chery Finds Foreign Partner in Jaguar 奇瑞与捷豹路虎联姻前景堪忧

◙ Geely Choking on Volvo Debt, Weak Sales 吉利债台高筑

News Digest: March 10-12, 2012 报摘： 2012年3月10-12日

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The following press releases and media reports about Chinese companies were carried on March 10-12. To view a full article or story, click on the link next to the headline.

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◙ MIIT to Allow Private-sector Investment in Telecom Infrastructure (English article)

◙ Zhejiang Geely, Volvo in Technology Transfer MOU (HKEx announcement)

◙ Home Inns (Nasdaq: HMIN) Reports Q4 and Full Year 2011 Results (PRNewswire)

◙ China Car Sales Have Worst Start Since 2005 as Economy Slows (English article)

◙ Vipshop Sets IPO Share Price Range at $8.5 to $10.5, to Raise Maximum $120 Mln (Chinese article)

◙ Latest calendar for Q4 earnings reports (Earnings calendar)

Investors Shun Struggling Groupon.cn, Yaodian100 投资者规避挣扎中的团宝网和耀点100

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I’ll close out this first week of March with more thoughts from the battered e-commerce and group buying sectors, where an executive from Groupon.cn, which has slashed its workforce in recent months, has made some frank comments on the dangers of growing too quickly and the reliance of capital from fickle investors. Ren Chunlei, whose company is no relation to US-listed group buying leader Groupon (Nasdaq: GRPN), complained in an interview with Chinese media that investors were practically begging for sites like his to take their millions of dollars in cash in the first half of last year to quickly expand in the then-red hot group buying and e-commerce spaces. But when they complied with big expansions and needed more cash in the second half of the year as losses mounted amid intense competition, those same investors suddenly changed their minds and wouldn’t provide any more funds. (Chinese article) Ren didn’t give any figures in terms of layoffs, but the same article quoted unnamed sources saying Groupon.cn has cut its workforce from 2,300 at its peak last year to just over 100 people now. That story has been played out throughout the industry, where other sites have also had to slash their workforces in recent months, including at Gaopeng, the joint venture between the real Groupon and Chinese Internet leader Tencent (HKEx: 700). Group buying leaders LaShou and 55tuan are both pursuing IPOs as each looks desperately for new cash to stay afloat following the broader flight of private investors from their sector discussed by Ren. I’m not very bullish on the space in general, but considering the current bloodbath I would actually say that any group buying site that can manage to make an IPO in this climate might actually be a good investment, since there’s a good chance that competition will ease considerably by the end of this year as many names like Groupon.cn either get acquired or simply go out of business. Of course, I’d also warn investors to watch out for accounting problems at these companies, as such problems were reportedly behind the indefinite delays plaguing LaShou’s IPO, after it made its first public filing for a New York listing late last year. (previous post) The latest report on the bloodbath comes from the equally overheated e-commerce space, where an apparel seller named Yaodian100.com which is reportedly desperately looking for a buyer as it faces insolvency. (English article) This looks like a mid-sized player that competes with bigger names like Vancl, which also reportedly had to make layoffs last year as it delayed a planned New York IPO due to weak market sentiment. But the bottom line is that the entire e-commerce and group buying sectors will continue to feel pain this year, with investors unlikely to come to the rescue until a much needed consolidation takes place.

Bottom line: The clean-up of the e-commerce and group buying spaces will pick up pace this year, claiming its first major victim by September.

Related postings 相关文章:

◙ Groupon.cn Becomes 2012 First Group Buy Victim 团宝网员工被放假 中国团购业料将加速整合

◙ Group Buy Clean-Up Grows, E-Commerce Next 团购行业洗牌加剧，下一个是电子商务

◙ 55tuan Restarts IPO Race With LaShou 窝窝团和拉手网重启IPO争先赛

 

Real Estate Down, But E-House Jumps 房地产股票下跌，但易居上涨

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China’s volatile real estate market is a never-ending source of news these days, with rumors cropping up just about every week about changes of heart in the government’s steadfast determination to cool the overheated market, even though Beijing consistently denies the rumors. The latest news seems to finally acknowledge the market may be bracing for a long winter, with S&P saying  Chinese developers are facing very serious risk of downgrade to their debt. But in a curious twist, E-House (NYSE: EJ), one of the nation’s top real estate services firms, seems to have excited investors with an earnings report that looks very mixed to me, including a massive loss, although the company made a relatively strong forecast for 2012 and also offered a first-ever dividend. Let’s look at the macro news first, which has S&P sounding a very bearish note on China’s real estate sector, saying many developers will be forced to refinance their debt, most likely at higher interest rates, as they are forced to slash prices to boost sluggish sales. (English article) S&P said home prices, which have been falling by low single-digit percentages since the second half of last year, could be down 10 percent year-on-year by June as developers who have been trying to keep prices steady finally give up and cut them to move inventory. The 10 percent figure looks like a good estimate considering current market trends, and I would fully expect to see it accelerate even more in the second half of the year, with year-on-year declines of 20-25 percent likely by year end, dealing a blow to the nation’s many real estate developers. Perhaps investors are expecting a boom in transaction volumes as developers are forced to lower prices, which would play to the advantage of real estate service companies like E-House that depend on transactions rather than home prices for their income. That’s one of the few reasons I can think of for the 10 percent jump in E-House shares after the company reported it swung to a $32 million net loss in the fourth quarter, as revenue slipped 6 percent. (company announcement) Investors may have been encouraged by the E-House’s announcement of a new dividend, following rival Soufun (NYSE: SFUN), which also announced a dividend last year. But at 15 cents per ADS, the payout isn’t very big, equal to about 2 percent of its last closing price. Instead, I suspect investors are excited about E-House’s forecast that 2012 revenue will rise about 25 percent this year despite the weak market, indicating that it indeed does see sales volumes picking up sharply as debt-heavy developers and home owners start selling their homes when they realize the market won’t improve anytime soon.

Bottom line: Real estate developers will come under growing pressure this year as they refinance debt at higher interest rates, while services firms will benefit from rising transaction volumes.

Related postings 相关文章:

◙ Soufun Looks For More Support With New Dividend 搜房网借新派息计划寻求支撑股价

◙ SouFun, NetEase: Slowing Growth Stories 搜房网、网易：增长放缓

◙ E-House, Blackstone Moves Auger Real Estate Rebound 中国房地产市场可能接近底部

 

net cash $392 million

Gree, Bright Food, Fosun in New Global Moves 格力电器、光明食品和复星集团全球新动向

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Overseas expansion was a major theme in the closing days of the first week of the National People’s Congress in Beijing, with top officials from 3 very different companies in the home appliance, food products and investing sectors all discussing ambitious global plans for the year ahead. Gree Electronic Appliance (Shenzhen: 000651), China’s largest maker of air conditioners, detailed ongoing plans to expand in the tough but lucrative US market; while Bright Food (Shanghai: 600597) said it is in talks to buy a French winemaker; and lastly Fosun International (HKEx: 656) said it’s eying investments in a number of overseas markets, especially in Europe where valuations are low as the market confronts its ongoing debt crisis. From my perspective, the Fosun and Bright Food plans both look like smart and interesting moves for reasons I’ll discuss shortly, while the Gree plan looks a bit more questionable and is likely to run into problems. Let’s look quickly at the 3, starting with Gree, whose President Dong Mingzhu, one of China’s most successful female business leaders, said the company has started to build a plant in the US after opening a branch office in California last year. There’s not much else in the report, except for Dong’s belief that strong US infrastructure and investing incentives will offset the market’s higher costs. While such a plan certainly conforms with China’s “go-global” policy, I expect Gree will quickly discover the higher costs and stiff competition are a potent combination that will eventually lead to the failure of this ambitious project. Moving on to Bright Food, Vice President Ge Junjie said the company is in talks to buy a French winemaker, following its deal last year to buy Australia’s Manassen Foods for $382 million. (English article) I really like this latest move, as China is fast becoming a nation of wine drinkers, as younger, more affluent urbanites look for lower-alcohol alternatives to traditional Chinese liquors, most notably the baijiu that is a favorite of many from the older generation. Finally there’s Fosun, whose Chairman Guo Guangchang, one of China’s most successful private investors, said his firm is looking at acquisition targets in Germany and Britain this year, attracted by low valuations of many companies as they struggle with a weak regional economy. Last year the company paid $120 million for 9.5 percent of a Greek company, Folli Follie Group, showing it is serious about investing abroad. (English article) I previously said that another regional investor, HNA Group, was a very entrepreneurial company that could become one of China’s first big global investors without ties to the central government (previous post), and I think that Fosun also fits this description, and could be a player to watch closely in the next 2 years.

Bottom line: Global expansion plans by Bright Food and Fosun International look like strong bets in the year ahead, while a US expansion by Gree Electric looking more problematic.

Related postings 相关文章:

◙ Fosun Pharma Offers Window to China Healthcare Reform

◙ China: A Fickle Global Shopper 中国企业缺乏并购经验

◙ HNA: China’s Next Big Global Investor? 海航集团：中国下一个大型全球投资者？

News Digest: March 9, 2012 报摘： 2012年3月9日

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The following press releases and media reports about Chinese companies were carried on March 9. To view a full article or story, click on the link next to the headline.

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◙ China Telecom (HKEx: 728) Gets More Than 200,000 Advance Orders for iPhones (Chinese article)

◙ Suntech (NYSE: STP) Reports Q4 and Full Year 2011 Results (PRNewswire)

◙ China’s Developers to Face More Downgrades on Refinancing Risks, S&P Says (English article)

◙ E-House (NYSE: EJ) Reports Q4 and Full Year 2011 Results and Declares Cash Dividend (PRNewswire)

◙ Yaodian100 Bankrupt, Seeks Acquirer – Source (English article)

◙ Latest calendar for Q4 earnings reports (Earnings calendar)

Alternate Fossil Fuels: China’s Newest White Elephant 过度追求替代性化石燃料或给中国留下大量沉重“鸡肋”

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Propose almost any project that includes the words “alternate energy” these days, and China will throw millions of dollars your way in the form of low interest loans, tax breaks and other government incentives to promote the latest green initiative. But one can’t help wonder if most of the huge flood of alternate and green energy projects coming out of China these days are bound to end up as white elephants, leaving the country with scores of factories, technology and other assets that died before they ever really got off the starting block. First there was the solar panel and wind power craze that began around 5 years ago, and then there was electric and hybrid vehicles, neither of which has produced companies that can turn profits without strong government support despite billions of dollars in investment. Now the latest fad has China’s energy majors snapping up assets with names like oil shale and oil sands, in what seems like a return to the 1970s when such uneconomical energy sources were also popular after another even bigger jump in oil prices than the one we’ve seen in recent years. China’s energy majors and even some smaller players have been on a drive to tap these energy sources in the last year, no doubt encouraged by Beijing which is letting them spend big dollars to pursue projects that are far more costly than traditional oil exploration. In the latest of these moves, the Ministry of Land and Resources said last week it will auction off blocks of land this month for development of shale gas exploration, with another possible auction to come later this year. That development comes just a week after another China-funded alternate fossil fuel developer, Sunshine Oilsands (HKEx: 2012) listed in Hong Kong. (previous post). And just last month, PetroChina (HKEx: 857; Shanghai: 601857; NYSE: PTR), the nation’s top oil producer, announced it was strengthening its ties with Royal Dutch Shell by buying a 20 percent stake in a Canadian oil shale gas project being developed by the European giant. I know that China is clearly worried about securing future energy supplies to feed its hungry economy, and these alternate fossil fuel projects complement other more traditional energy sources also being pursued by PetroChina and its peers. Furthermore, technology has improved significantly since the 1970s, when these kinds of alternate fossil fuel projects were widely discussed but most were ultimately abandoned after oil prices came down. Still, this latest drive into alternate fossil fuels looks like just the latest display of Beijing’s recent tendency to throw billions of dollars at any kind of new energy project, partly to find sustainable energy alternatives but also in its hopes of creating new technology leaders in some of these emerging areas. The country has made similar drives in solar energy, now producing more than half of the world’s solar panels, and is making another drive in electric and hybrid vehicles. But if history is any indicator, simply throwing money at a new area like alternate energy won’t work without other key elements like supporting infrastructure, long-term economics that don’t require government support, and market demand. Many of these elements are lacking in this growing crop of Chinese alternate energy initiatives, with no signs that the country has the power to change those fundamental issues. If those situations don’t rapidly change in the next couple of years, traditional energy companies like PetroChina, along with solar panel makers and firms that have invested heavily in green vehicles, could easily find themselves holding interesting but worthless technologies several years from now, leaving investors to pay for this promising but ultimately unsuccessful herd of Chinese white elephants.

Bottom line: China’s push into alternate fossil fuels reflects its overheated desire to be a leader in alternate energy, which could easily end up producing a herd of white elephants instead.

Related postings 相关文章:

◙ Pricey M&A, Cheaper Gas Undermine Sinopec 溢价收购和成品油降价 中石化面对双重利空

◙ Yingli Results: Rescue En Route From China? 英利财报：来自中国政府的营救？

◙ BYD’s New EV Plan: Hook Them With Investment 比亚迪拉美电动车之路堪忧