Bottom line: A strong reception for Apple Pay from consumers, banks and merchants bodes well for the service, which should attract a major audience among iPhone users but won’t pose a major threat to rival services from Alipay and WeChat.
Apple Pay launches in China
The launch of Apple Pay in China is buzzing through the local headlines a day after the roll-out, in a move that looks certain to shake up a stodgy industry dominated by homegrown names like Alipay. The most revealing headlines report on the rush by everyone, from consumers to banks and merchants to jump onto the Apple Pay bandwagon. That reflects the buzz that any major move by Apple (Nasdaq: AAPL) can create in the world’s largest smartphone market.
Local consumers are undoubtedly pleased that Apple chose China for the Asia launch of Apple Pay, selecting their market over more traditional candidates like Japan and South Korea. China is only the fifth global market for Apple Pay, following launches in the US, Canada, Britain and Australia. The pride element at being first in Asia, combined with Apple’s existing premium image here, will draw a big majority of Chinese iPhone and iPad users to try out Apple Pay on their devices. Read Full Post…
The following press releases and news reports about Chinese companies were carried on February 24. To view a full article or story, click on the link next to the headline.
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Unisplendour (Shenzhen: 000398) Scraps Western Digital (Nasdaq: WDC) Stake Buy (Chinese article)
TCL (Shenzhen: 000100), Unigroup to Form 10 Bln Yuan Strategic Acquisition Fund (English article)
Parkson (HKEx: 3368) to Close Chongqing’s Top Foreign Owned Department Store (Chinese article)
Hugo Boss (Frankfurt: BOSSn) Cuts Prices to Try to Revive Weak China Sales (English article)
Trina Solar (NYSE: TSL) Acquires a Solar Cell Factory in the Netherlands (PRNewswire)
Bottom line: Huawei’s debut notebook PC will get mixed reviews and so-so sales due to its lack of experience, but future models will rapidly improve and propel the company to one of the world’s top 5 brands in the next 2-3 years.
Huawei rolls out MateBook PC
Fast-rising smartphone maker Huawei has formally rolled out its first PC model, and is saying quite boldly that its ultimately target in this new product area is struggling hometown rival Lenovo (HKEx: 992). The move comes a month after media first reported that Huawei would enter the stagnating PC space, where traditional desktop models are rapidly disappearing and even growth for portable notebook models is slowing sharply. (previous post)
The move isn’t a huge surprise, since lines are rapidly blurring between traditional notebook PCs and a newer generation of portable devices led by smartphones. Many large-screen smartphones, often called phablets, and tablet PCs are nearly as large as notebooks and have similar functions. Likewise, a growing number of notebook PCs now have detachable screens that can be used like a tablet PC. Read Full Post…
Bottom line: New complaints about deceptive and unfair practices by short seller Andrew Left and online cosmetics seller Jumei have some validity, but such actions are ultimately just forms of normal market behavior.
Jumei under fire for low offer
A couple of headlines are shining a spotlight on the recent wave of privatizations and an older flurry of short-seller attacks involving offshore-listed Chinese companies, amid accusations of unfair practices and market manipulation. One headline has Hong Kong’s securities regulator bringing a case against notorious short seller Andrew Left and his company, Citron Research, claiming they knowingly published false information about locally listed Chinese real estate developer Evergrande (HKEx: 3333). The other is seeing several smaller US fund managers protest the low value of a new privatization offer for online cosmetics seller Jumei International (NYSE: JMEI).
These cases share the common theme that each is market driven, and thus each seems perfectly acceptable. Short sellers are famous for issuing misleading information in a bid to drive down a company’s share price, but can only succeed if other investors believe them. Similarly, most of the privatization offers for Chinese companies over the last year offer healthy premiums to the latest trading prices, even if those prices are down sharply from earlier IPO levels. Read Full Post…
Bottom line: Lenovo’s longtime CEO Yang Yuanqing should resign or be replaced to make way for new leadership to turn around the company’s struggling mobile unit that will be critical to its future.
Lenovo attends Mobile World Congress
The global smartphone spotlight is in Barcelona this week, as industry giants including China’s Huawei and ZTE (HKEx: 763; Shenzhen: 000063) unveil their latest new models at the world’s biggest telecoms show. But one company that’s unlikely to generate much buzz is PC stalwart Lenovo (HKEx: 992), which has disappointed for the last 2 years by failing to gain traction in a smartphone business that will be critical to its future.
To the contrary, Lenovo saw its smartphone sales tumble last year in its home China market, which accounts for about half of its total revenue. The dramatic plunge is all the more worrisome since Lenovo was hoping for a surge last year after its purchase of Motorola, which once enjoyed a reputation as a global leader but later fell onto hard times. Read Full Post…
The following press releases and news reports about Chinese companies were carried on February 23. To view a full article or story, click on the link next to the headline.
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Tsinghua’s $2.6 Bln Taiwan Deals to Face Unprecedented Government Scrutiny (English article)
Huawei Debuts MateBook Notebook PC at Mobile World Congress (Chinese article)
HK Lays Out Case Against Short Seller Citron Research’s Andrew Left (English article)
ICBC (HKEx: 1398) Says Cooperating With Madrid Anti-Money Laundering Probe (HKEx announcement)
Parcel Delivery Service SF Express Prepares for Domestic IPO (Chinese article)
Bottom line: Meituan-Dianping’s IPO is likely to raise more than $2 billion and should get a strong reception when it comes, most likely by mid-year in New York, while ZTO Express’ $1-$2 billion IPO will get a cooler reception due to its steep losses.
Meituan-Dianping eyes IPO
After a quiet start to the year, the market for offshore Chinese IPOs is slowing coming to life with word of 2 listing plans that should both top the $1 billion mark. One would see leading group buying site Meituan-Dianping list, most likely in New York or possibly Hong Kong, in a deal that would probably raise at least $2 billion. The second is also Internet-related, and would see parcel delivery giant ZTO Express also raise up to $2 billion in a New York IPO.
Perhaps not surprisingly, both of these companies are losing money despite their position as industry leaders. That’s because competition has been cut-throat in both spaces, especially in the parcel delivery business that supports China’s booming e-commerce sector. Meituan and Dianping were also locked in heated competition before they merged late last year to face the current company, which still faces stiff competition from 2 of China’s leading Internet companies, Baidu(Nasdaq: BIDU) and Alibaba (NYSE: BABA). Read Full Post…
Bottom line: China is likely to lead the list of countries getting national security reviews for its US purchases over the next few years, reflecting Chinese companies’ growing pursuit of foreign technology and other sensitive expertise.
Treasury Department releases annual security report
The past year has been notable for a growing number of Chinese acquisitions in the US attracting national security reviews, and now a new report from the reviewing agency is providing some big-picture numbers about the trend. The headline figure from the new report by the US Treasury Department shows that it reviewed 24 proposed acquisitions of US firms by Chinese buyers in 2014, making China the biggest recipient of such reviews.
At the same time, the report also cast a spotlight on several other trends, including the spread of reviews outside the sensitive high-tech sector and into less conventional areas like real estate. One such deal surprised many last year, when the purchase of the storied Waldorf-Astoria hotel in New York to Chinese insurer Anbang for nearly $2 billion was subject to such a review. Read Full Post…
Shanghai passed a major milestone over the Lunar New Year holiday by becoming China’s quietest major city during the period, thanks to our new ban on all fireworks inside the Outer Ring Road. I’ll admit I was quite skeptical when the ban was initially announced, since it sounded nearly impossible to enforce in a city where thousands love to welcome the Spring Festival with the centuries-old tradition of setting off such noisy and heavily polluting fireworks.
But the city proved me wrong, by mobilizing a massive army of enforcers that included thousands of regular policemen and many times more volunteers tasked with stopping any merrymakers. As a result, I didn’t hear a single firecracker explode near my home in Hongkou District on Lunar New Year’s Eve, nor on the fourth evening of the New Year when people traditionally welcome the god of wealth. Read Full Post…
The following press releases and media reports about Chinese companies were carried on February 20-22. To view a full article or story, click on the link next to the headline.
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China Tops Foreign Buyers Drawing US M&A Security Reviews (English article)
Bottom line: Canadian Solar’s Recurrent Energy unit is likely to make its first public filing for a New York IPO in the next 2 weeks and should get a positive reception, while Jumei is likely to quietly de-list from the US in the next 3-4 months.
Recurrent Energy gets big new financing
One of the few Chinese IPOs likely to happen in New York this year is moving closer to the launch gate, with word of major new financing for the power plant-building unit of solar panel maker Canadian Solar (Nasdaq: CSIQ). But while that IPO for Recurrent Energy moves closer to the IPO gate, announcement of a new privatization bid for online cosmetics seller Jumei International (NYSE: JMEI) is far more typical for the market these days.
This pair of stories reflect a growing new reality for US-listed Chinese companies. That reality is seeing some of China’s leading private companies choose New York for their listings, banking on interest from global investors seeking to buy into the China growth story. At the same time, many smaller lesser-known Chinese companies listed in New York have discovered US investors are far less interested in their stories, and are privatizing with plans to re-list and hopefully get higher valuations back in China. Read Full Post…
