Bottom line: Reuters decision to put its Chinese-language website on hold is partly a surrender to Beijing, but also acknowledges that new approaches are needed to succeed in the nation’s restrictive media space.
Reuters revamps China consumer strategy
No one else is writing about the latest strategic shift at Reuters’ (NYSE: TRI) Chinese language news site in Beijing, probably because the actual number of headcount reductions is quite small, at less than 10. But the move has huge symbolic significance, since it looks like an admission of defeat to Beijing censors who blocked the site in China more than a year ago. At the same time, the move also represents a certain realism, and the fact that Chinese consumers increasingly get their news via other channels anyhow, most notably social media. Read Full Post…
Bottom line: A Chinese group’s plan to buy the low-end chip business of Dutch firm NXP could be part of a newer Beijing strategy for buying western chip-related assets focused on older, less sensitive technologies and smaller companies.
China buys NXP assets
Even as its bid to take over a leading German robotics firm shows signs of crumbling, China is attempting yet another high-tech purchase in Europe with a newly announced plan to buy a major part of the business of microchip maker NXP Semiconductor (Nasdaq: NXPI). China tech watchers will know the earlier crumbling bid I’m referring to is coming from Chinese home appliance maker Midea (Shenzhen: 000333), which is trying to buy a major stake in Germany’s Kuka (Frankfurt: KU2). Now this newest bid has a couple of Chinese investment companies offering to pay $2.75 billion for NXP’s standard products business, which makes diodes, transistors and other basic parts for cars and consumer devices. Read Full Post…
The following press releases and news reports about China companies were carried on June 16. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
Bottom line: Okmetic’s sale to a Chinese buyer was uncontested because of the company’s small size and youth, but the case could be closely watched to see how China might handle future takeovers of larger western chip makers.
Okmetic shareholders approve China takeover
China’s sudden appetite for overseas high-tech chip makers is attracting growing resistance from wary western governments, but one deal that seems to be avoiding such tensions is the purchase of Finnish company Okmetic (Helsinki: OKM1V). Just 2 months after announcing its plans to be acquired by China’s National Silicon Industry Group (NSIG), Okmetic has moved steadily forward with the plan and has just announced that holders of an overwhelming 93 percent of its shares have agreed to accept the offer. (company announcement) Read Full Post…
Bottom line: McDonald’s is likely to reach a final deal to sell its China-owned stores by the end of summer, while Cheesecake Factory is likely to enjoy modest success as it launches its first China stores.
Cheesecake Factory comes to Shanghai
A couple of restaurant stories are in the headlines today, one featuring fast-food veteran McDonald’s (NYSE: MCD) as it seeks a new China partner, and the other starring the popular US Cheesecake Factory (Nasdaq: CAKE) chain as it prepares to open its first China restaurant. The McDonald’s story is clearly the larger of the stories, and focuses on a drive to shed direct ownership of its China stores and move to a franchise-based model that has underpinned its success in the west. Meantime, I have to admit that one of my main reasons for writing about Cheesecake Factory is that I used to be a big fan of the chain, though the remote location of its first China restaurant means I probably won’t dine there. Read Full Post…
Bottom line: Reluctance to transfer its technology killed CRI’s breakthrough deal to build the first US high-speed rail line, showing that emerging Chinese tech leaders must be more open to such transfers if they hope to succeed globally.
CRI’s high-speed train to US derails
The story that has seen China’s rapid modernization using western technology took an unusual twist last week, when a US firm aiming to build America’s first high-speed rail line abruptly canceled its tie-up with a Chinese partner over technology transfer issues. The US builder of the line connecting Los Angeles and Las Vegas was quite direct, blaming its decision on Washington’s condition requiring that rail cars for the project be locally manufactured. Read Full Post…
The following press releases and news reports about China companies were carried on June 15. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
Alibaba (NYSE: BABA) Sees Growth Rising to 48 Pct in First Forecast (English article)
ChemChina, New Hope Said to Weigh McDonald’s (NYSE: MCD) Franchise Bids (English article)
Yingli Green Energy (NYSE: YGE) Reports Q1 Results (PRNewswire)
China’s Midea (Shenzhen: 000333) Wants Only 49 Pct of Kuka: Sources (English article)
NXP (Nasdaq: NXPI) Selling Products Unit for $2.75 Bln to Chinese Group (English article)
Bottom line: China Lodging’s revenue growth could slip into single digits by the end of the year and could start to contract in 2017, as China’s hotel industry corrects after years of strong growth.
China Lodging assists franchisees
Overbuilding and a slowing economy are taking a toll on one of China’s leading hotel operators, which has just revealed it is slashing some of the fees it charges to its franchising partners as they struggle for business. The revelations by China Lodging Group (Nasdaq: HTHT), also known as Huazhu, bode poorly for China’s broader hotel industry, which is suffering a hangover following explosive growth over the last 2 decades. Investors greeted the downbeat news by selling off China Lodging shares, which closed down 2.4 percent and have lost more than 12 percent of their value since the end of March. Read Full Post…
Bottom line: Baidu’s long-term revenues will decline by 15-20 percent from current levels as a result of a cut-back in sponsored links and new transparency policies that will scare away some of its advertisers.
Baidu cuts Q2 revenue outlook
What’s the cost of being honest, or at least a little more honest? If your name is Baidu (Nasdaq: BIDU), apparently the answer is about $400 million, which is how much China’s leading search engine has just lowered its latest quarterly revenue forecast after taking steps to become more transparent. Put differently, the figure is about one-eighth of Baidu’s previous revenue forecast for the quarter, meaning it would translate to lost revenue of about $1.3 billion of the $10.25 billion it generated for all of last year. Read Full Post…
Bottom line: New remarks by TSMC Chairman Morris Chang could signal a revival of several stalled mainland investments in Taiwan’s microchip sector, with new focus on creating mechanisms to prevent IP theft.
TSMC remarks hint at revival of China-Taiwan chip deals
New reports are citing one of Taiwan’s most influential technology executives saying he welcomes investment from China, offering a tantalizing new path to the island for Chinese high-tech firms who so far have been rebuffed in such moves. The new signals are coming from the chairman of leading Taiwanese high-tech chip maker TSMC (Taipei: 2330), who is saying he could accept a Chinese investor as a strategic stakeholder as long as the company doesn’t require a place on his company’s board. Read Full Post…
The following press releases and news reports about China companies were carried on June 14. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
Baidu (Nasdaq: BIDU) Announces Lowered Revenue Guidance for Q2 (PRNewswire)
Nokia (Helsinki: NOK1V) Signs $1.5 Bln Framework Deal with China Mobile (HKEx: 941) (English article)
Okmetic (Helsinki: OKM1V) Says 93 Pct of Shares Tendered for Offer by China’s NSIG (GlobeNewswire)
After Apple,Didi Chuxing Gets $600 Mln Investment from China Life (HKEx: 2628)
Cheesecake Factory (Nasdaq: CAKE) Opens First China Store at Shanghai Disney (Businesswire)
