Bottom line: Huawei’s smartphone prices should continue to rise this year as it rolls out more higher-end models, while Xiaomi’s new drone product looks like a publicity ploy to draw attention back to its sputtering smartphones.
Huawei smartphone prices rise in 2015
Just days after new data showed Huawei finishing 2015 as China’s smartphone leader, different new data is revealing the company was the market’s only domestic brand that was able to raise prices for its products during the year. That boosts the growing perception that Huawei is emerging as China’s first solid mid-range smartphone brand, as it tries to climb the value ladder to someday challenge global leader Apple (Nasdaq: AAPL).
Meantime, domestic rival Xiaomi, which once also liked to compare itself to Apple, is diverging from its former US role model by preparing to roll out a drone product, according to media reports. If the reports are true, this would look like a somewhat desperate move by the fast-fading Xiaomi, which is unable to generate much positive buzz these days for news related to its struggling smartphone division. Read Full Post…
Bottom line: Alibaba is likely to enter talks to buy a strategic stake in Groupon or even make a bid for the entire company, following its disclosure that it has purchased 5.6 percent of the US company in the open market.
Alibaba buys Groupon stake
What exactly was leading Chinese e-commerce company Alibaba (NYSE: BABA) thinking when it quietly purchased 5.6 percent of Groupon (Nasdaq: GRPN) shares on the open market without informing the faded US group buying pioneer? That’s the question that will be making the rounds this week, following the surprise disclosure of Alibaba’s purchase that Groupon only learned about through a regulatory filing.
Of course the most intriguing possibility is that Alibaba could be weighing a bid to acquire Groupon completely, which wouldn’t be that preposterous for reasons I’ll explain shortly. Other media are putting a less aggressive spin on the move, saying that Alibaba simply hopes to learn from Groupon’s group buying skills that first propelled it to fame about 6 years ago. Read Full Post…
The following press releases and media reports about Chinese companies were carried on February 19. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
Major Banks in Rush to Support Apple Pay (Nasdaq: AAPL) After China Launch (Chinese article)
Uber Losing $1 Bln a Year to Compete in China (English article)
Xiaomi to Release Consumer Drone – Reports (English article)
Average Huawei Smartphone Price in China Rose in 2015 to $213, As Others Fall (Chinese article)
Bottom line: A new integrated car-ordering platform being rolled out by Lyft and Didi looks like a smart and low-cost move to expand their geographic reach, while LeEco’s electric car venture with Aston Martin is likely to sputter.
Lyft co-founder John Zimmer in Beijing for Didi announcement
Two of China’s top Internet companies are in car-related headlines today, led by a rapidly cozying relationship between Didi Kuaidi and US counterpart Lyft that has the pair preparing to roll out a joint platform for their signature hired car services. The other news has online video giant LeEco (Shenzhen: 300104), formerly known as LeTV, rolling out a joint venture to make electric cars with super luxury brand Aston Martin.
Both of these deals are incremental, since the original Didi-Lyft partnership was formed last year when the former invested in the latter. Likewise, LeEco was rumored to be near a tie-up with Aston Martin as early as last April. From a broader perspective, both moves show a growing confluence between the Internet and cars, which has opened up a wide range of new services that often incorporate GPS technology. Read Full Post…
Bottom line: National security concerns are likely to torpedo pending sales of crane maker Terex and the Chicago Stock Exchange to Chinese buyers, while a similar sale of Ingram Micro shouldn’t draw as much scrutiny.
Terex, Chicago Stock Exchange sales draw national security concerns
Just a day after chip maker Fairchild (NYSE: FCS) called off talks to be purchased by a Chinese buyer over concerns that Washington would veto the deal, 2 other similar planned acquisitions of US firms are coming under the microscope. In the more ominous of the new developments, a group of 46 US congressmen have expressed reservations about a deal announced last week that would see a little-known Chinese company buy the Chicago Stock Exchange.
The other development has a single US congressman expressing similar reservations about a deal that would see Chinese construction equipment maker Zoomlion (HKEx: 1157) buy US crane maker Terex (NYSE: TEX). At the same time, yet another major deal that could draw similar national security scrutiny is in the headlines, with word that a company connected to private equity investor HNA Group has offered to pay $6 billion for computer and component distributor Ingram Micro (NYSE: IM). Read Full Post…
Bottom line: Fosun International looks like a good stock pick for the next year due to strong profit growth, as long as founder Guo Guangchang can steer clear of China’s 2-year-old anti-corruption campaign.
Fosun’s Guo is company’s biggest asset, risk
Today marks the launch of a new series on some of my favorite Chinese companies, as I aim to spotlight a group of US, Hong Kong and China-listed names that look set for the best growth over the next 5 years. I’m kicking off the series with fast-rising private equity giant Fosun International (HKEx: 656) because it happens to be in the news, with word the company has launched a fledgling share buyback to support its struggling stock.
In many ways, Fosun encapsulates both the big potential benefits and also the major risks facing many private Chinese companies as they seek to become big players both at home and abroad. Fosun is actually part of a much larger group based in China’s commercial capital of Shanghai, and its private equity arm has been one of the most successful ventures of its savvy founder Guo Guangchang. Read Full Post…
The following press releases and media reports about Chinese companies were carried on February 18. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
China’s Zoomlion (HKEx: 1157) Bids for Terex, Stokes US National Security Fears (English article)
Marriott (NYSE: MAR) Enters China Mid-Range Hotels, Targets 100 Fairfield Hotels by 2021 (Chinese article)
Ingram Micro (NYSE: IM) to Be Bought by Tianjin Tianhai for $6 Bln (English article)
Jumei (NYSE: JMEI) Announces Receipt of Going Private Proposal (PRNewswire)
Didi, Lyft to Launch Joint Car-Ordering Platform Within 3 Months – Lyft CEO (Chinese article)
Bottom line: Fairchild’s decision to halt talks to be acquired by a Chinese group reflect mounting US national security concerns over cross-border M&A from China, which are likely to remain high until after this year’s presidential election.
Fairchild calls off talks with Chinese buyer
The Year of the Monkey is shaping up as a busy time for Washington officials reviewing China-US deals for national security concerns, with word that such concerns have killed a bid for Fairchild Semiconductor (NYSE: FCS) by a Chinese buyer. In this instance, it was Fairchild itself that decided to terminate the discussions with a group led by a unit of Chinese conglomerate China Resources, citing worries that such a deal would get vetoed by Washington.
Fairchild’s decision marks the latest case in a recent rise of US-China deals thrown into doubt over national security concerns, which has its roots in several factors. Several of the killed deals have come in the high-tech semiconductor chip sector, which is now in the process of global consolidation. Adding to the pressure are an increasingly aggressive group of cash-rich Chinese global buyers looking to expand beyond their traditional realms of natural resources and other low-end products. Read Full Post…
Bottom line: Tencent would be wise to roll back a newly announced money-transferring fee on WeChat following state-media criticism, which could indicate a tougher stance by Beijing due to the platform’s increasingly dominant position.
Xinhua calls WeChat a catfish
It’s been quite a while since the last tussle between China’s influential central media and its vibrant private sector, so I was amused to read of a new flare-up in that regard after Tencent(HKEx: 700) said it would start charging fees for a money-transferring service on its popular WeChat platform. This looming flare-up has seen the state-run Xinhua news agency, often considered the voice of Beijing, criticize WeChat’s move as “excessive goose plucking”, which is quite a vivid description and certainly not too complimentary.
This particular assault is somewhat noteworthy, as it hearkens back to another similarly high-profile spat involving Tencent and WeChat 3 years ago. That tussle came as WeChat was beginning its meteoric rise, and saw leading telco China Mobile (HKEx: 941; NYSE: CHL) accuse the service of stealing its traditional SMS text messaging service. Tencent insisted at that time that WeChat would always remain free, defying China Mobile pressure to charge for the service and then divide the fees between the 2 sides. (previous post) Read Full Post…
The following press releases and media reports about Chinese companies were carried on February 17. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
Fairchild (NYSE: FCS) Rejects Chinese Offer on US Regulatory Fears (English article)
Wanda to Team with Korea’s E-Land on Overseas Travel Services (Chinese article)
Canadian Solar (Nasdaq: CSIQ) Says Q4 and Full Year Results to Exceed Prior Guidance (PRNewswire)
Xinhua Criticizes WeChat’s New Fees for Cash Transferring Service (Chinese article)
China New Energy Car Output for January Drops Sharply Month-on-Month (Chinese article)
Bottom line: Apple Pay’s upcoming China launch and WeChat’s roll-out of fees for its cash-providing service reflect growing competition in the e-payments market, which will result in a long and costly battle among major players for market share.
Apple, WeChat in new e-payments moves
The rapidly heating China market for electronic payments is in a couple of top headlines today, led by highly anticipated news that Apple (Nasdaq: AAPL) will launch its Apple Pay service in China later this week. At the same time, separate media reports say that Internet giant Tencent (HKEx: 700) is taking a major step towards monetizing the e-payments service attached to its wildly popular WeChat instant messaging service.
The pair of headlines underscore just how much potential both domestic and foreign companies see in the China electronic payments market, which is growing rapidly as consumers and companies do more of their buying online. Some new data nicely summarizes the market, with leading e-payments firm UnionPay reporting that transactions processed over its network soared 30 percent to 312 billion yuan ($48 billion) over the week-long Lunar New Year holiday last week. Read Full Post…
