Bottom line: Sina’s latest board reduction to just 5 members looks like a strategic move by Chairman and CEO Charles Chao, as he prepares a sale that will give him a major executive position at his company post-merger.
Sina board shrinks to just 5 members
The share price isn’t the only thing shrinking these days at leading web portal Sina (Nasdaq: SINA). The board of one of China’s oldest Internet companies has also just undergone a major reduction, with 2 of its 7 members leaving without any sign of replacements. I’m not extremely familiar with Sina’s board and its dynamics, but it does seem like 5 members is quite small for a company of Sina’s size and could reflect a power play by longtime Chairman and CEO Charles Chao.
Such a play could be prelude to the sale of Sina to a rival, with e-commerce giant Alibaba (NYSE: BABA) as the most likely candidate. I’ve been predicting such a sale for a while now, and this latest move looks like the latest signal that Chao could be clearing out board members who might oppose such a deal. With just 5 members left on the board, Chao would only need 2 to agree with him to approve a deal that he would personally negotiate. Read Full Post…
Bottom line: Shanghai Disneyland will meet its target of opening in the half of this year, but the event will be marked by numerous small problems that are common with such big projects but generate negative publicity.
Disneyland set for June 16 opening
The countdown to launch for what’s likely to become one of Disney’s (NYSE; DIS) biggest growth drivers for the next decade has officially begun, with announcement of a June 16 opening date for the $5.5 billion Shanghai Disneyland resort. The most noteworthy thing about this particular announcement is the date itself, which falls within Disney’s target for an opening in the first half of the year. The newest Disneyland was originally set to open by the end of last year, and another delay would have sent a negative signal that the park was running into more problems.
But the June 16 opening date comes just within Disney’s latest target, hinting at the huge complexity of a project that will draw not only huge crowds but also intense media attention at the start. From a purely seasonal perspective, a more ideal opening date would have been in April, when Shanghai’s weather starts to warm and a full day outside becomes a comfortable proposition for tourists after the long winter. Read Full Post…
The following press releases and media reports about Chinese companies were carried on January 13. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
Shanghai Disney (NYSE: DIS) Resort to Open on June 16 (English article)
China Telecom (HKEx: 728), Unicom (HKEx: 762) Partner to Improve Operations (English article)
Yum’s (NYSE: YUM) China Sales Rose 1 Pct in December Before Planned Spinoff (English article)
Bottom line: Starbucks and Uber are likely to scale back their latest aggressive China expansion plans as the nation’s economy slows and consumers rein in their spending on non-essential items and services.
Starbucks accelerates China expansion
China’s economy may be heading for a new era of slower growth, but you would never know that by looking at the latest moves by Uber and Starbucks (Nasdaq: SBUX), 2 global leaders in their categories of hired car services and retailing. The first instance has Uber completing a major fund-raising for its China unit and forming a new tie-up in travel services. Meantime, Starbucks is steaming ahead with plans to nearly double its China store count by 2019.
As a neutral observer of both companies, I have to say that both Starbucks and Uber are being just slightly naive in ignoring all the signs of a major Chinese economic slowdown that could ultimately lead to woes now confronting countries like Greece and Spain. In that kind of environment, it’s far from clear that consumers will still enthusiastically shell out $5 for a cup of coffee at Starbucks when they could buy a cup of tea for far less, or that they will pay similar amounts for a hired car instead of taking the bus or subway. Read Full Post…
Bottom line: New scandals involving fraudsters using Baidu and Ctrip platforms highlight a major problem for major web companies from third-party merchants, but are unlikely to have a big impact on their business.
Frausters make headaches for Baidu, Ctrip
Two new scandals involving leading travel services provider Ctrip(Nasdaq: CTRP) and top search engine Baidu (Nasdaq: BIDU) are shining a spotlight on the daily battle China’s top Internet firms must do with the hundreds of fraudsters lurking online. The first case has Baidu dealing with fraudsters who tried to sell products on its Tieba social communities service, while Ctrip has landing in trouble after 2 people bought invalid tickets from independent travel agencies on one of its open marketplaces.
The biggest case for this kind of fraud came a year ago, when China’s commerce regulator released a report showing huge volumes of trafficking in pirated goods on the Taobao marketplace operated by leading e-commerce site Alibaba(NYSE: BABA). In all of these cases the fraud isn’t being directly committed by the big-name companies, but rather by small, third-party merchants doing business on their sites. But the big Internet names are realizing that they are ultimately responsible for the reliability of all transactions taking place on their sites. Read Full Post…
The following press releases and media reports about Chinese companies were carried on January 13. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
China’s Wanda Buys Film Studio Legendary for $3.5 Bln (English article)
Baidu (Nasdaq: BIDU) Halts Commercial Tie-Ups in Disease Area of Tieba Social Service (Chinese article)
Ctrip (Nasdaq: CTRP) Fake Ticket Scandal Exposes Gray Areas in Food Chain (Chinese article)
The newest “Star Wars” movie is in two headlines this week, led by a strong debut for the seventh installment in the franchise that has just opened in China several weeks after its global premier. The movie is also in headlines related to a new initiative by the hyperactive China Media Capital (CMC), which has just formed a joint venture with a company that made some of the special effects for “Star Wars: The Force Awakens”. In this case CMC’s new partner is Base FX, a Beijing-based start-up with strong ties to Hollywood.
Much has been written about prospects for the new “Star Wars” movie in China, where the franchise isn’t very well known because none of the first 6 films in the series were screened in the country unit recently. To address that problem, the movie’s producer Disney (NYSE: DIS) has been working overtime to promote the film in China, with relatively strong results. Read Full Post…
Bottom line: Lenovo’s plans to turn around its struggling smartphone business lack focus and are likely to fail, which could ultimately result in the exit of longtime chief Yang Yuanqing this year.
Lenovo denies plans to change Motorola logo
Computer giant Lenovo (HKEx: 992) was busy showcasing its latest PCs at a major trade show last week in Las Vegas, but industry watchers were far more interested in the outlook for its struggling smartphone business. That’s because 2016 could easily become a make-or-break year for Lenovo, which desperately needs to turn around a smartphone unit that will be critical to its future growth.
In response to a flurry of questions focused on its smartphones, talkative CEO Yang Yuanqing said his company is making steady progress in the BRICS markets of Brazil and India, and that he’s aiming to set Lenovo back on an upward track in its home China market. Lenovo also announced a vague new smartphone partnership with Google (Nasdaq: GOOG), and denied any plans to jettison its the famous bat-wing logo for its recently acquired Motorola brand.Read Full Post…
The following press releases and media reports about Chinese companies were carried on January 12. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
China Media Capital Invests in ‘Star Wars’ Special Effects House Base FX (Chinese article)
Apple, Samsung supplier Biel Crystal plans $2 Bln HK IPO in 2016 – IFR (English article)
Uber Drives Into China Tourism Industry With HNA Group Tie-Up (English article)
Women’s Shopping Services Mogujie, Meilishuo Merge to Create $3 Bln Company (Chinese article)
‘Star Wars: Force Awakens’ Breaks Records With $53 Mln China Debut (English article)
Bottom line: Vipshop shop shares could see some upside if the company improves its public relations and its revenue and profit growth stabilize at current levels.
Vipshop dogged by fake liquor scandal
A scandal involving pirated liquor is cooling down former e-commerce high-flyer Vipshop (NYSE: VIPS), in an episode reminiscent of a much larger brouhaha that devoured sector leader Alibaba (NYSE: BABA) almost exactly a year ago. In this case, the scandal involving fake Moutai liquor has been dragging on for more than 2 weeks now, and the latest development has Vipshop apologizing for its lack of transparency in handling the incident.
Some are saying this particular scandal could just be the tip of the iceberg, and that numerous other fake products could be lurking on Vipshop’s website that specializes in bargains for lesser-known brands. But in my view, slowing growth is the real cause for concern among Vipshop investors, many of whom are taking advantage of this news as an excuse to sell their stock. Read Full Post…
Many things have changed about China over the last 30 years, but one of the few that’s remained constant over that time is the country’s love of collecting stamps and other commemorative memorabilia. We were reminded of that fact once more this past week, when throngs of people lined up outside our local post offices and waited for hours in the winter cold to buy a new set of stamps celebrating the upcoming Year of the Monkey.
It’s interesting to see that stamps have retained such a strong place in the local consciousness, since the sending of snail mail that’s their true purpose is quickly becoming a thing of the past. But a closer look at the lingering stamp-collecting craze shines a spotlight on yet another major trend in contemporary China, since a big majority of people who often wait in line for hours are often older retirees who actually do still send letters. Read Full Post…
