Bottom line: New court actions by Huawei, Weibo and NBA star Michael Jordan reflect China’s efforts to crack down on white collar crimes that are common but threaten to hamper the country’s economic development.
Huawei tussles with corporate thief
The headlines are bubbling today with a few notable stories from the courtroom, which spotlight the slow but steady progress China is making against corporate cheats who undermine the nation’s business climate. Leading the news is telecoms giant Huawei, which is chasing a rogue former executive who was already jailed once for stealing company property and tried to continue his illegal ways after being released from prison.
Another headline has a judge ruling in favor of the Twitter-like Weibo (Nasdaq: WB), which accused a software maker of illegally stealing data from its service. Last but not least there’s the NBA, whose legendary Michael Jordan is closing in on a high-court decision that could finally force a rogue sporting goods maker to stop illegally using his trademark. Read Full Post…
The following press releases and news reports about China companies were carried on April 27. To view a full article or story, click on the link next to the headline.
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Bottom line: New IPOs from metals trading specialist Yintech in New York and aircraft leaser BOC Aviation will meet with lukewarm reception that sees them price in the middle of their range and post flat trading debuts.
Yintech banks on precious metals trading
A couple of IPO stories are in the headlines, including the first major offering of a Chinese company in New York this year set to take place by metals exchange operator Yintech. Meantime in Hong Kong, the airline leasing unit connected to Bank of China (HKEx: 3988; Shanghai: 601398) is also sniffing for interest in its plan for an offering to raise up to $1.5 billion.
Each of these IPO stories is quite different, in terms of size, industry and stage of development. But a common theme is that both come from relatively traditional older industries in China, rather than the high-growth tech and media sectors that more typically like to list offshore. To the contrary, this year has seen many of those high-growth companies like Qihoo (NYSE: QIHU) and E-House (NYSE: EJ) de-list from New York after failing to attract enough interest from US investors. Read Full Post…
Bottom line: Lenovo’s new emphasis on its year-old Zuk smartphone brand and TCL’s plunging sales reflect ongoing cutthroat competition in China, though neither company is likely to give up the domestic market anytime soon.
Lenovo launches new Zuk phone
New headlines surrounding 2 of China’s bigger stumbling smartphone makers reflect the market’s current state of chaos, as more than a dozen well-funded brands battle for surpremacy. Leading the headlines is PC titan Lenovo (HKEx: 992), which has decided to bring its young Zuk smartphone brand back into the parent company after initially letting it operate independently.
At the same time, faded giant TCL (HKEx: 2618) has just reported worrisome quarterly results that show its China smartphone sales plunged by more than half due to the market’s fierce competition. Both Lenovo and TCL are rapidly becoming victims in China’s bloody smartphone wars, though each is unlikely to withdraw from the market anytime soon due to strong backing from a cash-rich parent. Read Full Post…
Bottom line: Beijing should take more aggressive steps to ensure true competition between China’s 3 telcos, to prevent collusion like their current resistance to ending domestic roaming fees.
China telcos resist end to roaming fees
The latest sign of collusion in China’s telecoms sector was in the headlines last week, as the nation’s big 3 carriers appeared to band together to counter new calls for an end to domestic roaming charges. A number of arguments were put forth for maintaining such fees, but the bottom line is that carrier costs of providing such service are negligible and the fees themselves remain an important revenue source.
The US market, which is most similar to China, eliminated such fees more than a decade ago due to competition between 4 major carriers that emerged in the 1990s. But China’s carriers, while competitive in some areas, appear to be acting together in anti-competitive fashion to resist the change, a common occurrence due to close ties between the companies. Read Full Post…
The following press releases and news reports about China companies were carried on April 26. To view a full article or story, click on the link next to the headline.
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BOC Aviation Said to Gauge Demand for Up to $1.5 Bln IPO (English article)
Baidu (Nasdaq: BIDU), KFC Open Store with Stationary AI Food-Ordering Robot ‘Duer’ (English article)
It seems that all the goodwill in China garnered by Apple (Nasdaq: AAPL) CEO Tim Cook wasn’t enough to prevent the company from hitting a major new roadblock, with word that its book and movie services have been blocked in the country. The move nicely illustrates 2 faces of Beijing that sometimes seem contradictory. On the one hand, Chinese leaders crave the attention they get when global leaders like Cook visit China and pay due respect to the market. But on the other, they have little tolerance for anyone who violates the country’s strict censorship rules.
Buzz is now centering on whether Apple will be able to somehow bring its book and movie services into compliance with new Chinese rules rolled out last month, allowing the services to resume. If this were Google(Nasdaq: GOOG) running into similar problems, I would say the answer would be “no”, since the company has little goodwill with Beijing. But Apple has invested heavily to win the favor of Beijing leaders, meaning it’s likely to get a more sympathetic ear, probably after personal intervention by Cook himself. Read Full Post…
Bottom line: Overheating complaints surrounding its new Mi 5 smartphone are the latest technical snafu for Xiaomi, whose image as a cool and cutting-edge company will suffer further as a result of the problem.
Users complain of Mi 5 overheating
Xiaomi is hot once again, but not in a way the former smartphone superstar would probably like. That’s because the latest heat around Xiaomi comes from reports saying a growing tide of users are complaining about overheating batteries in the company’s latest smartphone, the Mi 5.
It’s a bit unclear how widespread this problem really is, and I’ll admit that reports in the Chinese and western media still aren’t that numerous. But there definitely appears to be a problem. That comes as the latest setback for a company that used to grab headlines with its slick marketing gimmicks, but lately has become a media whipping boy for its steady stream of snafus and missteps. Read Full Post…
China’s love affair with paper money looks set for a major shake-up soon, with a new plan to eliminate 1 yuan notes and replace them with coins. But anyone who lives here in Shanghai knows that change took place a while ago in our city, and no one seems to miss the ratty, green 1 yuan notes too much, myself included.
Money is an integral part of any nation’s identity, and the paper-versus-coin argument seems to be a broader subset of that dialogue. The issue has a historical twist here, since China was the actual birthplace of paper money back in the Tang Dynasty more than 1,000 year ago. Read Full Post…
The following press releases and news reports about China companies were carried on April 23-25. To view a full article or story, click on the link next to the headline.
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Apple’s (Nasdaq: AAPL) Book, Film Services Go Dark in China (English article)
China Suspends New Business Registration of Online, Offline Finance Firms – Report (English article)
Bottom line: 58.com’s stock could be set for some upside in the second half of the year, as it returns to profitability after a well-executed acquisition spree that has sharply boosted its revenue growth.
58.com feasts on ads, acquisitions
Classified ads may not sound like the sexiest area of the Internet, but they’ve provided some strong growth for the acquisitive 58.com (NYSE: WUBA), which is fast emerging as a leader in the space and is often called the Craigslist of China. The company’s aggressive acquisition campaign has led to explosive revenue growth, but has also pushed the company into the loss column as it digests its many recent purchases.
That could present a good buying opportunity for investors with a longer term perspective, as 58.com looks set to return to the profit column and continue its strong revenue growth. If all goes according to plan, 58.com could end next year as China’s undisputed leader in the online advertising services realm. The company is already squarely ahead of the older 51job.com (Nasdaq: JOBS) and is on track to surpass current leader Zhaopin (Nasdaq: ZPIN), which both focus on online job recruiting. Read Full Post…
