The following press releases and media reports about Chinese companies were carried on December 6. To view a full article or story, click on the link next to the headline.
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◙ Apple’s (Nasdaq: AAPL) iPhone 4S To Go On Sale In 7 Cities on December 16 – Source (Chinese article)
◙ Bank of China (HKEx: 3988) To Step In As Saab Part Owner: Source (English article)
◙ Vancl Completes USD 230 Mln Sixth-Round Funding (English article)
◙ KKR Announces Investment in China Outfitters (Businesswire)
◙ Chow Tai Fook May Beat Prada (HKEx: 1913) to 2011 HK Record in $2.8 Billion IPO (English article)
A Hong Kong manufacturer called Sitoy Group is trying to position itself as a play on China’s booming market for luxury goods, making handbags for an all-star line-up of big names like Coach and Prada (HKEx: 1913). But anyone wanting to buy into this company, which is revving up for a Hong Kong IPO expected to raise nearly $100 million (
Following the landmark launch of a probe against them last month for their lock on the domestic broadband Internet market, China Unicom (HKEx: 762; NYSE: CHU) and China Telecom (HKEx: 728; NYSE: CHA) have suddenly become quite contrite in their effort to avoid becoming the first major state-run firms to be found guilty of exploiting the masses through monopolistic practices. The Chinese media were buzzing over the weekend with reports that the 2 companies, China’s second and third biggest telcos, were both promising to end their monopolistic ways and to improve broadband speeds and lower prices if the government would end its investigation. (
A barely noticeable news brief on Nissan’s (Tokyo: 7201) electric vehicle, the Leaf, in today’s China Daily provides some insight on how the big foreign automakers see China as an EV market, spotlighting the uphill battle the country faces in developing this technology. Nearly every foreign automaker has announced one plan or another to import or even build its EVs or hybrid vehicles in China, with GM (NYSE: GM) giving plans for its Chevy Volt and Toyota (Tokyo: 7203) and Volkswagen (Frankfurt: VOWG) all announcing their own initiatives. But most of those plans have been vague at best, reflecting both the fact that technology still needs time to mature and also a high degree of skepticism that Chinese consumers are ready to spend big dollars on alternate energy vehicles, which are typically much more expensive than gas-powered cars and require charging infrastructure that most of China still lacks. The news brief hidden on the inside pages of today’s China Daily says that Nissan recently put 15 of its Leaf EVs on the road in the central Chinese city of Wuhan for test driving. A company spokesman further said that Nissan will continue the tests for a full 3 years, which sounds to me like an incredibly long period for this kind of technology if it was really interested in trying to sell these vehicles in China. In fact, there’s a very real possibility that the technology will be obsolete in 3 years or sooner, meaning the Leaf will probably never see any commercial sales in China at all. My guess is that other foreign automakers will proceed with similarly conservative plans for their EV and hybrid vehicles in China, as all wait to see if government incentives and needed infrastructure develop to make a serious effort worthwhile. If that is indeed what happens, look for EV and hybrid auto sales by foreign automakers in China to number in the thousands of units or less for each of the next 2-3 years, while domestic players like BYD (HKEx: 1211; Shenzhen: 002594) are left to make a more serious effort at developing what in all likelihood will be a very difficult market.
As a longtime tech reporter, I was intrigued to see that one of China’s longest running M&A deals that never quite seems to happen has once again popped into the headlines, perhaps paving the way for an even bigger and sorely needed consolidation in the foundering microchip sector. Industry followers will know that of course I’m talking about a merger between Hua Hong NEC and Grace Semiconductor, both midsized players that hoped to become major forces in the contract chip-making business but never achieved the scale necessary to do that. The 2 sides, and more importantly their impatient investors, have been talking for years about a merger, but this time foreign media are reporting they have actually reached a deal, which should close by year-end. (
There’s a mini-flurry of news out about online game specialist NetEase (Nasdaq: NTES), as the normally low-key company generate some buzz, perhaps in the prelude to a bigger announcement about the future of its portal business. None of the latest news is that exciting, but it’s all interesting nonetheless. In perhaps the biggest news, the company has joined many of its US-listed peers in announcing a share buyback program worth up to $50 million, a relatively small amount but still significant enough to blip onto investor radar screens. (
What a difference a deal makes. That seems to be the lesson for faded online game developer and operator The9 (Nasdaq: NCTY), whose shares have soared on a new licensing deal some 2 years after it disappeared from investors’ radar screens after losing the rights to its hit game World of Warcraft, or WoW to gaming enthusiasts. The latest development underscores just how dependent companies like The9 and rivals like Shanda (Nasdaq: SNDA) and NetEase (Nasdaq: NTES) are on individual hit titles, which can sometimes account for half or more of a company’s top and bottom lines. Interestingly, this latest development has seen The9 turn away from licensing other people’s games toward the developing its own titles, whose costs are much higher but also offers much bigger potential rewards from outside licensing fees for popular titles. In this case, a Singaporean company called Garena Online is paying a nifty $23 million for licensing rights for 6 years to The9’s self-developed game, “Firefall”, in Southeast Asia and Taiwan. (
Alibaba chief Jack Ma is clearly not someone to take “no” for an answer, as evidenced by his company’s latest effort to assemble a group to buy out its controlling shareholder, Yahoo (Nasdaq: YHOO). There’s not enough detail in a media report (
An interesting test is looming for the struggling solar cell sector, with one of the worst-performing players, LDK Solar (NYSE: LDK) preparing a massive new note offering worth 5 billion yuan, or nearly $800 million, that will test both the market and Beijing in different ways. If market forces prevail and Beijing declines to step in, I wouldn’t be surprised to see this offer collapse completely due to lack of investor interest, potentially resulting in a financial crisis for LDK that could see it become one of the first major victims of the ongoing crisis among major solar cell makers. So let’s have a more detailed look at the situation. Under its new plan, LDK wants to float 5 billion yuan in new bonds, starting with a first tranche worth about $80 million on December 7, or next Wednesday. (
