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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China’s Homelink Said to Seek Funds at $6.2 Bln Value (English article)
Bottom line: ZTE’s change of leaders is a much-needed move to revive the company’s fortunes, though the choice of its former technology chief as new chairman looks a bit conservative.
ZTE gets new chairman
Following a turbulent period that saw it nearly lose access to many of its key suppliers, telecoms giant ZTE (HKEx: 763; Shenzhen: 000063) has just announced the arrival of a new chief, as it seeks fresh starts in its 2 main businesses selling networking equipment and smartphones. Many are pointing to ZTE’s recent run-in with Washington for illegally selling products to Iran as the direct reason for the departure of Shi Lirong, who was chairman for the last 6 years.
Perhaps that’s partly true, but the reality is that Shi’s tenure at the helm of ZTE has been marked by a much longer series of stumbles that has cost the company millions of dollars in sales and market value. Those missteps led ZTE to launch a major overhaul a couple of years ago that seemed to be showing results for its older networking equipment business. But more recently ZTE’s newer smartphone business has been showing signs of stumbling, and the latest Iran controversy may have driven the board’s decision to replace Shi. Read Full Post…
Bottom line: A flurry of new de-listing activity shows that well-funded privatizations will continue despite market volatility in China, and could also spread to undervalued private companies listed in Hong Kong.
Wanda Commercial Properties eyes buyout
The headlines are brimming with new moves in the buyout wave that has swept over off-shore listed Chinese stocks, which are privatizing in droves due to disappointing valuations. Leading the news are 2 former high-flyers, online video site Youku Tudou (NYSE: YOKU), which has formally completed its buyout by e-commerce giant Alibaba (NYSE: BABA); and property giant Wanda Commercial Properties (HKEx: 3699), which has announced it is exploring a potential buyout less than 2 years after its Hong Kong IPO.
That pair are joined by 2 smaller stories involving ongoing privatizations by budget hotel operator Homeinns (Nasdaq: HMIN) and the shriveling Ku6 Media (Nasdaq: KUTV). Media are saying that Homeinns has already lined up a Chinese listing vehicle to resume its life as a publicly traded company after it de-lists from New York. And Ku6 has announced it has formally signed a buyout agreement that will result in its own de-listing. Read Full Post…
Bottom line: China’s latest plan to buy Finnish chip maker Okmetic could get vetoed on national security concerns, reflecting foreign government concerns about selling technology companies to government-backed entities.
Finland’s Okmetic gets buyout bid from China
China’s ambitions of building a world-class high-tech microchip industry were in the headlines again last week, when the small Finnish chip maker Okmetic (Helsinki: OKM1V) revealed it had received a takeover bid from a government-backed company based in Shanghai. Beijing’s ambitions are understandable, since China currently buys over 60 percent of the world’s microchips to feed its vast manufacturing complex that makes everything from smartphones to computers and home appliances.
But recent resistance in the US and Taiwan has also highlighted reluctance by overseas governments to seeing their companies purchased by the big state-run vehicles that Beijing has recently set up to achieve its aims. Historically speaking, China has also achieved mixed results when the government backs big microchip projects, which often fall victim to government agendas that limit their ability to quickly respond to the fast-changing market. Read Full Post…
The following press releases and news reports about China companies were carried on April 6. To view a full article or story, click on the link next to the headline.
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Alibaba (NYSE: BABA) Completes SCMP Acquisition, Makes Digital Content Free (English article)
China’s ZTE (HKEx: 763) Names New Chief as It Grapples With US Blacklist (English article)
Youku Tudou (NYSE: YOKU) Announces Completion of Merger (PRNewswire)
Temasek Sees Valuation Concerns in Chinese Technology Industry (English article)
Ku6 Media (Nasdaq: KUTV) Enters Merger Agreement For Going Private (PRNewswire)
Bottom line: A surprise bid by China’s XIO Group for JD Power is unlikely to succeed due to lack of experience and possible concerns over a regulatory veto, but could force rival bidders to raise their offers slightly.
XIO joins bidding for JD Power
In what’s becoming an increasingly common occurrence, an obscure Chinese company has entered the bidding for a major western asset, with word that a buyout firm called XIO Group is eyeing US-based car industry consulting giant JD Power and Associates. I’m not too surprised by any of these bids these days, since many Chinese companies are flush with cash and under orders from Beijing to diversify beyond their home market.
These bids are pushing up the prices for global assets quite a bit, even as many such acquisition attempts ultimately fail. Both of those elements are present in this latest story, since Chinese bidders have become famous for attempting to buy top names like JD Power at any price, regardless of fundamentals of the acquisition target. But in the end, most of these Chinese bids are failing due to lack of experience and concerns about such foreign ownership. Read Full Post…
Bottom line: Groupon’s new tie-up with Comcast shows it’s more interested in working with a well-known US-based company than the unfamiliar Alibaba, which could force Alibaba to quietly dump its Groupon stake by the end of this year.
Comcast buys into Groupon
It seems e-commerce giant Alibaba (NYSE: BABA) isn’t the only company interested in money-losing group buying site Groupon (Nasdaq: GRPN). Less than 2 months after Alibaba disclosed it had purchased 5 percent of Groupon shares, apparently in the open market, a firm backed by US cable giant Comcast (Nasdaq: CMCSA) has just announced plans for its own strategic tie-up with the faded group buying site.
This new move certainly seems to throw some doubt on my previous prediction that Alibaba’s purchase could presage a boosting of its stake in Groupon, or perhaps even an outright buyout bid. While such a move is still possible, Groupon does seem to be signaling that it intends to remain independent. It also seems to be indicating it prefers this more direct approach to forming new partnerships, rather than Alibaba’s approach that looks a bit stealthier since it appeared to buy its Groupon shares without the company’s consent. Read Full Post…
I have to admit I was quite skeptical when our city launched a new campaign to clean up Shanghai’s streets of rude and unruly drivers a couple of weeks ago. After all, such campaigns are quite common here, and usually last for just a day or two before city officials seem to lose interest and redeploy their resources elsewhere.
But lately I’ve had to rethink my initial stance, and am even starting to hold out a glimmer of hope for improvement, as the campaign remains in the spotlight and appears to be maintaining momentum a full 2 weeks after its launch. Read Full Post…
The following press releases and news reports about China companies were carried on April 2-5. To view a full article or story, click on the link next to the headline.
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China’s XIO Group Vies for US Auto Consultant JD Power – Sources (English article)
Huawei Posts Strongest Revenue Growth in 7 Years for 2015 (English article)
Tesla (Nasdaq: TSLA) Unveils Model 3, May Target Future China Production (Chinese article)
Finland’s Okmetic (Helsinki: OKM1V) Gets Takeover Bid from China’s National Silicon (English article)
Lenovo (HKEx: 992) Changes Motorola Brand Name to Moto on Smartphones (English article)
Bottom line: A high-profile China visit by Google CEO Sundar Pichai reflects warming ties between the company and Beijing, and presages a probable launch of the Google Play app store and Nexus phones in China by the end of this year.
Google’s Pichai in high-stakes game with Beijing
In a move that looks like something from a high-stakes chess game, Google’s (Nasdaq: GOOG) CEO is taking advantage of the huge publicity surrounding a recent triumph of his company’s artificial intelligence (AI) to make a high-profile visit to China. Google is hardly a welcome name in the country, following its high-profile spat in 2010 over Beijing’s strict self-censorship policies that prompted it to shutter its China-based search service.
Since that blow-up, however, Google has more recently been gingerly tip-toeing back to China. Reports through much of last year indicated the company was making necessary preparations to launch a Chinese version of its Google Play app store, possibly in hopes of selling its Nexus brand of smartphones in the world’s largest mobile market. Read Full Post…
Bottom line: A veto threat by China’s insurance regulator ultimately killed Anbang’s bid for Starwood, but the Chinese insurer is likely to pursue more mega-purchases in the more traditional overseas real estate sector this year.
Starwood abandoned at altar by Anbang
In a sudden and unexpected turn in the bidding war for hotelier Starwood (NYSE: HOT), Chinese suitor Anbang has suddenly bowed out of the contest without explanation, paving the way for a merger with US suitor Marriott (NYSE: MAR). Many are marveling at this sudden turn of events, since Anbang earlier this week had submitted an all-cash bid that was 6 percent higher than Marriott’s latest offer for Starwood, operator of the Sheraton and Westin hotel brands.
But anyone in China might say they saw this coming, based on a couple of local media reports from sources at Anbang and China’s insurance regulator. The first of those reports came last week, and saw one of China’s top financial media report that the Chinese insurance regulator was likely to veto a deal over concerns about the size of the investment. That was followed by another report based on comments from an Anbang insider this week, saying the regulator would have no grounds to veto such a deal. Read Full Post…
