What a difference a year makes. It was almost exactly this time last year that smartphone sensation Xiaomi was king of the world, after closing a major new funding round that valued the company at a lofty $45 billion just 5 years after its founding. That was the last time Xiaomi boasted of its high valuation, and since then the company’s name has become more associated with marketing snafus, product delays and minor scandals involving issues like false advertising.
So it seems appropriate that Xiaomi is kicking off the new year with yet another new scandal, this one involving its air purifiers that were at the center of yet another scandal when they first launched about a year ago. This time the bad news is coming from Shanghai’s quality regulator, which says Xiaomi’s air purifiers fail to meet its standards. Read Full Post…
The following press releases and media reports about Chinese companies were carried on January 20. To view a full article or story, click on the link next to the headline.
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Meituan-Dianping Completes $3.3 Bln Funding, Values Company at $18 Bln (Chinese article)
Bottom line: A flurry of lawsuits alleging undervaluation in the latest buyout offer for US-listed Chinese firm Synutra could signal growing new resistance to low valuations for many other existing offers.
Lawfirms pan Synutra buyout offer
The law firms that make their money by suing publicly traded companies have found a new reason to sue, taking aim at the dozens of Chinese firms now trying to privatize from New York. This new wrinkle in the wave of privatization bids for US-listed Chinese companies comes after infant formula maker Synutra (Nasdaq: SYUT) became the latest to get an offer from a management-led group to take the company private.
This marks the first time I’ve seen so many lawsuits threatened after a company announced the receipt of a buyout offer, with at least 3 firms saying the offer undervalues the company. Up until now, we’ve only seen minor shareholder resistance to most buyout offers, even though many of the buyers are taking advantage of depressed valuations for the companies being privatized. Read Full Post…
A recent brouhaha at our city’s Gucun Park in Baoshan District, famous for its springtime cherry blossoms, is providing food for thought on the issue of public spaces, and what responsibilities our city and we as local citizens have for supporting these places. The case revolves around the park’s decision to rent out a large section of its space to a private company, which then rented the area out for wedding parties.
It’s clear that park managers took their action to raise more money. But what’s less clear is whether they did so because of budget shortfalls, or simply because they wanted to earn more than the 20 yuan ticket price that people pay for admission. Read Full Post…
The following press releases and media reports about Chinese companies were carried on January 19. To view a full article or story, click on the link next to the headline.
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Lufax Completes Fundraising, Valuing Company at $18.5 Bln (English article)
Qualcomm (Nasdaq: QCOM) Unveils $280 Mln Joint Venture with Chinese Province (English article)
Fosun’s Guo Guangchang in Sports Tie-Up With European “Super Broker” (Chinese article)
Synutra (Nasdaq: SYUT) Announces Receipt of “Going Private” Proposal (PRNewswire)
Huawei Sets 2016 Sales Target of $81.8 Bln (Chinese article)
Bottom line: Huawei’s new move into notebook PCs could seriously challenge the existing establishment, and it could become a top 5 brand by the end of next year.
Huawei moves into notebook PCs
Telecoms giant Huawei is making a surprise move into the PC market, with word that it will launch a new line of notebook models next month using chips supplied by Intel (Nasdaq: INTC). The move would put Huawei into direct competition with leading PC maker Lenovo (HKEx: 992), as it aggressively expands beyond its older networking equipment business and diversifies into consumer electronics.
Huawei’s move into notebooks isn’t a huge surprise, since such products are increasingly similar to the new generation of smartphones where Huawei has found recent success. Huawei already sells tablet PCs, which perform many of the functions as notebooks as well. But the move does represent an entire new product area for Huawei, and is almost certain to put the company on collision course with Lenovo in their home China market. Read Full Post…
Bottom line: Competition will remain fierce in China’s smartphone market this year, as major players including Huawei and Xiaomi compete aggressively with newcomers like LeTV for market share.
LeTV sets ambitious smartphone goal
The sputtering Xiaomi and high-flying LeTV (Shenzhen: 300104) have become 2 of China’s first smartphone makers to announce 2015 sales figures, as broader industry data show just how crowded the field has become. Xiaomi’s first-look sales figures come in a microblog post from one of its executives, and show the company missed its 2015 sales target by around 10 percent. LeTV’s figures come from an emailed statement, and say the company sold a relatively modest 4 million smartphones last year following its entry to the space.
Then there’s the broader industry data that points out 7 of the world’s top 10 smartphone brands last year came from China. That report notes that among the top 10, only Samsung (Seoul: 005930), Apple (Nasdaq: AAPL) and LG (Seoul: 066570) were non-Chinese, and that a surging Huawei overtook Lenovo (HKEx: 992) to become the world’s leading Chinese brand. Read Full Post…
The following press releases and media reports about Chinese companies were carried on January 16-18. To view a full article or story, click on the link next to the headline.
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China’s Haier to Buy GE’s (NYSE: GE) Appliance Unit for $5.4 Bln (English article)
Huawei Says to Launch Notebook PCs in February with Intel (Nasdaq: INTC) (Chinese article)
Regulator Orders Removal of False Claims Posts on Baidu (Nasdaq: BIDU) Tieba Service (Chinese article)
Xiaomi Misses Smartphone Sales Target by 10 Pct on China Slowdown (English article)
JD.com (Nasdaq: JD) Finance Arm Raises 6.65 Bln Yuan, Valued at 46.7 Bln Yuan
Bottom line: Google’s new alliance with Lenovo and its rare response to rumors Chinese media rumors are the latest signals of its plans to launch an app store and sell its Nexus smartphones in China later this year.
Google Tangos with Lenovo
Google (Nasdaq: GOOG) has been in the China headlines twice these last few days, announcing a new tie-up with local PC giant Lenovo (HKEx: 992) and issuing a rare response to the latest rumors on its slow march back to the world’s biggest Internet market. These latest signals seem to show that a return to China is almost inevitable for Google, which wants to avoid a negative publicity backlash that will inevitably come when it announces the move later this year.
Google abruptly shuttered its China search service nearly 6 years ago, after Beijing refused the company’s demands to ease strict Chinese rules that require all Internet sites to self-police themselves for politically sensitive content. The closure and acrimony that followed carried a healthy dose of self-righteousness by Google, and thus a return to a market it once scorned might seem just a tad hypocritical. Read Full Post…
Bottom line: TCL’s smart TV alliance with LeTV brings together 2 strong names and is getting off to a good start with a strong lineup of new products, but could have trouble over the longer term due to the rapidly changing industry.
TCL announces new products with LeTV
TV stalwart TCL (Shenzhen: 000100) has just announced an expansion of its young partnership in smart TVs with industry high-flyer LeTV (Shenzhen: 300104), in what could become the first of an earlier wave of such tie-ups to finally gain some traction. Many of the similar tie-ups were announced in rapid succession a couple of years ago, as newer online video companies rushed to forge partnerships with traditional TV manufacturers.
The idea was that the TV makers would produce customized products optimized to offer video services from a particular Internet company, creating a new generation of online-connected smart TVs that could compete with traditional cable TV services. But it seems many of those alliances never really got very far, and these days many video companies have decided to focus instead on making special set-top boxes that be easily mounted on any TV. Read Full Post…
The following press releases and media reports about Chinese companies were carried on January 15. To view a full article or story, click on the link next to the headline.
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LeTV (Shenzhen: 300104), TCL (HKEx: 1070) Form Alliance in Large Curved TVs (Chinese article)
36 Charitable Health Organizations Raise Alarm on Baidu (Nasdaq: BIDU) (Chinese article)
Shanghai Quality Inspector Says Xiaomi Air Purifiers Substandard (Chinese article)
Huawei, Ericsson (NYSE: ERIC) Sign Patent Exchange Agreement (Chinese article)
Qunar (Nasdaq: QUNR) Rises as Ctrip Plans to Buy `Significant Minority Stake’ (English article)
