Bottom line: Huawei is likely to consolidate its position as China’s top smartphone brand this year, while Lenovo and Samsung could regain some market share as each mounts aggressive turnaround campaigns.
Huawei takes China smartphone crown
A year is almost like an eternity in the fast-moving smartphone world, and nowhere is that reality more on display than in the latest quarterly data on China’s cut-throat market. In the smartphone history books, 2015 will go down as the year that saw Huawei surge to become China’s largest player, with smaller homegrown brands Vivo and Oppo also making impressive gains. On the other side of the aisle, the year is one that former high-flyers Samsung(Seoul: 005930) and especially Lenovo (HKEx: 992) would rather forget, as both plunged out of the nation’s top 5 brands.
Smartphones are an extremely big business due to their high prices, a fact that has drawn numerous companies to the space and created intense competition in China. But constant changes to technology, combined with increasing commoditization due to the dominance of the free Android operating system, means that unknown companies can quickly rise to become major players. Similarly, a winner one year can quickly stumble to become a loser the next. Read Full Post…
Bottom line: Washington should seriously consider a ground-breaking plan that would sell the Chicago Stock Exchange to a Chinese buyer, potentially including conditional approval to allay national security concerns.
Chinese buyer bids for Chicago Stock Exchange
China’s outbound M&A passed a new milestone last week when a Chinese investor group announced plans to buy the Chicago Stock Exchange, with an aim to repositioning it as a US listing ground for Chinese companies. The move would mark the first purchase of a US stock exchange by a Chinese buyer, even though the Chicago Stock Exchange is a tiny player compared to the 2 main US boards in New York.
But recent concerns that have threatened several other similar cross-border purchases could come into play, as Washington may worry about opening the nation’s vital capital markets to Chinese ownership. Beijing could also express concerns, since the buyer is a real estate company with little or no experience with financial markets. Read Full Post…
The following press releases and media reports about Chinese companies were carried on February 16. To view a full article or story, click on the link next to the headline.
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China Smartphone Market Sees Its Highest Shipment Ever of 117.3 Mln in Q4 – IDC (Press Release)
Apple Pay (Nasdaq: AAPL) to Launch in China in 3 Days – Source (Chinese article)
E-Payment Firm Lakala to Backdoor List in Shanghai via ‘Tibet Tourism’ Shell (English article)
LeTV (Shenzhen: 300104) Sports Raises $1 Bln in Series B Funding (Chinese article)
Yingli (NYSE: YGE) Said to Get 3.3 Bln Yuan in Loans Amid Restructuring (English article)
Bottom line: Baidu’s sale of its Qiyi video unit is a first step before a domestic IPO, and the valuation from that sale shows that Alibaba is overpaying for rival video site Youku Tudou and that industry leader LeTV is still highly overvalued.
Baidu sells Qiyi video unit in run-up to IPO
Two of China’s largest online video sites are in the headlines as the nation returns to work after the week-long Lunar New Year holiday, led by word that Baidu (Nasdaq: BIDU) is selling its controlling stake of its iQiyi online video unit. In this case the move looks like preparation for a domestic IPO by the unit, since the buyer of the stake is a group led by Baidu founder Robin Li and iQiyi chief Gong Yu.
The second report has Youku Tudou (NYSE: YOKU) announcing a date for its shareholders to vote on an offer to sell the company to e-commerce leader Alibaba (NYSE: BABA). The meeting will take place on March 14, and will mark a final step before Youku Tudou ceases its brief but stormy life as a publicly traded company and becomes part of Alibaba. Read Full Post…
Bottom line: The EU’s extension of punitive tariffs to China-made solar panels transshipped through shell factories in Malaysia and Taiwan could kill a recent wave of offshore factory construction by Chinese manufacturers.
EU freezes out Chinese solar panels in Taiwan, Malaysia
A recent offshore movement by Chinese solar panel makers seeking to avoid western anti-dumping tariffs could come to a sudden halt, with word the European Union (EU) is extending its previously announced punitive duties to Taiwan and Malaysia. The EU’s ruling means it believes that many of the offshore solar panel plants recently built by Chinese manufacturers are little more than shells designed to hide the true origin of their products.
This story dates back 3 years, and began when the EU levied anti-dumping tariffs on Chinese-made solar panels after determining manufacturers were receiving unfair government support via policies like cheap land, low-interest loans and export rebates. Chinese manufacturers quickly agreed to raise their prices to levels comparable to those of western rivals in a bid to avoid the tariffs. But then they almost immediately began to violate the spirit of that agreement by offering discounts to buyers in other ways. Read Full Post…
Bottom line: A new equity alliance between Qihoo and Norway’s Opera web browser is a smart move that could see initial turbulence due to differing management styles, but should ultimately benefit both sides.
Qihoo in group buying Opera
Security software specialist Qihoo 360 (NYSE: QIHU) is taking an important step towards its ambitions of becoming a global Internet brand, with word that it’s part of a group set to buy Norway-based Opera (Oslo: OPERA), maker of the world’s fourth most popular mobile Internet browser. Qihoo is already the maker of one of China’s most popular homegrown web browsers, and is also posing one of the first serious challenges in years to online search leader Baidu(Nasdaq: BIDU) with its Haosou.com engine. It’s also making a big push to move its highly popular security software products into the global marketplace.
Against that backdrop, this new deal looks quite intriguing and also like a smart step for Qihoo to complement its current strengths. But I would also caution that Qihoo is famous for its business tactics, which many might describe as highly aggressive and even unethical. Those include designing products that make big changes to computer and smartphone configurations without their users’ knowledge, most often to favor Qihoo at the expense of rival products. Read Full Post…
The following press releases and media reports about Chinese companies were carried on February 10-15. To view a full article or story, click on the link next to the headline.
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Baidu (Nasdaq: BIDU) Receives Offer to Acquire Qiyi.com (PRNewswire)
Alibaba (NYSE: BABA) Gets New Learning Opportunity With 5.6 Pct Stake in Groupon (English article)
Chinese Investor Group to Buy Chicago Stock Exchange (English article)
Amazon (Nasdaq: AMZN) Expands Logistics Reach in China (English article)
Opera (Oslo: OPERA) to Be Sold to Chinese Tech Companies for $1.2 Bln (English article)
Bottom line: Results from Chinese New Year promotions show that WeChat will continue to dominate over Alipay in gift-giving and other friend-to-friend transactions over the mobile Internet due to its original design as a SNS service.
WeChat trounces Alipay in online hongbao promotions
Most of China has been on holiday these last few days, but leading Internet companies Tencent (HKEx: 700) and Alibaba (NYSE: BABA) have been working overtime trying to put the best possible face on dizzying numbers from their red envelope gift-giving promotions over the holiday.
Tencent is focusing on the headline figure of 8 billion money-filled virtual red envelopes, known in Chinese as hongbao, that changed hands on its wildly popular WeChat messaging service through the second day of the Lunar New Year. Alibaba, meanwhile, is focusing on its own headline figure that shows its Alipay electronic payments service received a whopping 21 billion hits per minute at the height of a New Year’s promotion it held with leading TV broadcaster CCTV. Read Full Post…
Shanghai will have yet another major attraction to look forward to in the Year of the Monkey, with word that the museum that tells the story of our city’s history will soon take up a new permanent residence at the former Art Museum on the edge of People’s Square. As a fan of history museums in general, I was quite excited about the development, and have to commend the city on its choice of locations.
More broadly speaking, the new museum will become yet another feather in Shanghai’s cap as it builds up a stable of world-class attractions for both local residents and domestic and international travelers. Read Full Post…
Bottom line: A growing strategy by retailers like Macy’s and Suning to target Chinese tourists traveling abroad looks smart, drawing on Chinese consumers’ growing taste for imported goods and distrust of domestically made products.
Macy’s targets Chinese shoppers in US
Traditional retailing giant Macy’s (NYSE: M) is rapidly discovering a new fondness for China, with its announcement of a series of special promotions at its main US department stores targeting Chinese traveling abroad for the Lunar New Year. Macy’s new move comes just a half year after the company announced a major new China joint venture aimed at tapping the nation’s booming markets for traditional retailing and e-commerce.
At the same time, domestic Chinese retailing powerhouse Suning (Shenzhen: 002024) is targeting similar consumers traveling over the holiday to Japan, offering its own promotions using a local Japanese electronics chain it purchased last year. Read Full Post…
YCBB will be on holiday through February 9 for the Lunar New Year. We will resume limited publishing for the remainder of the week, and return to our normal schedule on February 15. Happy Year of the Monkey!
