The following press releases and media reports about Chinese companies were carried on December 23. To view a full article or story, click on the link next to the headline.
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Spring Airlines (Shanghai: 601021) Japan Unit Gets 1 Bln Yuan Investment (Chinese article)
Zhongyin Cashmere Sued for Overselling Stakes in Shanda Games (Nasdaq: GAME) Privatization (English article)
Bottom line: Suning’s move into sports is aimed at providing content for its PPTV online video service, but is also the latest in a string of wide-ranging investments that reflect a company with an identity crisis.
Suning invests in soccer
Sports teams are becoming flavor of the day for Chinese firms with entertainment aspirations, with word that retailing giant Suning (Shenzhen: 002024) has joined the bandwagon via a new investment in a local soccer club. The company’s latest deal will see it invest 523 million yuan ($80 million) in the Jiangsu Sainty Football Club, which like many other professional Chinese sports teams is struggling financially.
Suning’s interest in soccer is probably related to its 2013 purchase of PPTV, a relatively large player in China’s crowded online video space. The Suning-PPTV tie-up left many people puzzled at thee time of that announcement, since the 2 companies have little in common. But Suning has been aggressively promoting the service in its trademark consumer electronics stores, and in August it announced a plan to invest 1 billion yuan into a campaign to sell smart TVs equipped with PPTV’s online video service. Read Full Post…
Bottom line: OnePlus and Smartisan are 2 brands that could be most at risk for closure or acquisition in a looming smartphone shakeup that will intensify next year and claim at least 2-3 mid-sized and smaller players.
Less than 2 weeks after he talked about a looming shakeup in China’s overheated smartphone sector, OnePlus co-founder Carl Pei is having to explain layoffs at his company, and also fend off rumors of a takeover bid. At the same time, more signs of Pei’s predicted shakeup are coming from Smartisan, another newer smartphone play, whose manufacturing partner for its new model has reportedly gone bankrupt.
Both OnePlus and Smartisan fit the profile of the kind of company that Pei said would be most at risk in the coming shakeup. Each is relatively young, and both are pure smartphone plays without any other operating history. That means they have few other resources to fall back on as their profits evaporate in the unending price wars gripping China’s smartphone market. Read Full Post…
Bottom line: The recent case involving criticism of Alibaba by Washington and Beijing over piracy should form a template for how the 2 governments can collaborate on commercial issues where they have common interests.
US warns Alibaba over fake goods
Washington and Beijing showed a rare sign of collaboration on commercial issues last week when the US sternly rebuked e-commerce giant Alibaba (NYSE: BABA) for widespread trafficking of pirated goods on its websites, reinforcing a similar message delivered by China at the start of this year. While it’s doubtful the US Trade Representative’s (USTR) office and China’s State Administration for Industry and Commerce (SAIC) consulted each other in their separate actions, the parallel moves showed just how effective the 2 governments can be when they work together in some of the many areas where their interests overlap.
That contrasts sharply with a more clashing style on many other issues like high-tech hardware security and new energy products, where both sides have similarly common interests but more often take actions that result in trade wars and angry verbal exchanges. Read Full Post…
The following press releases and media reports about Chinese companies were carried on December 22. To view a full article or story, click on the link next to the headline.
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Alibaba (NYSE: BABA) Hires Ex-Apple Investigator for Global Anti-Piracy Fight (English article)
OnePlus Denies Merger Rumors with Oppo, Says Layoffs Part of Improvement Plan (Chinese article)
Suning (Shenzhen: 002024) Invests 523 Mln Yuan in Jiangsu Soccer Club (Chinese article)
SABMiller (London: SAB) China Partner Said to Pick Banks to Advise on Snow JV (English article)
Bottom line: Yirendai’s IPO could auger a wave of similar new listings by Chinese P2P lenders next year in Hong Kong and China, though few are likely to choose New York due to fading sentiment from US investors.
IPO fizzles for P2P lender Yirendai
What’s likely the be the final Chinese IPO in New York for 2015 has debuted with a very appropriate thud, capping a year that saw just a handful of companies make such new listings. The latest IPO by P2P lending platform operator Yirendai (NYSE: YRD) has a few noteworthy angles, led by a 9 percent drop in its trading debut on Wall Street at the end of last week.
The investor indifference to Yirendai nicely summarizes what has been a dismal year for new Chinese IPOs in New York, as investors worry about China’s slowing economy and also lose interest in these smaller companies whose longer term prospects are unclear. At the same time, Yirendai marks the first IPO for China’s young stable of P2P lenders, and is likely to be followed by more next year. This debut will hardly encourage those companies to go to New York, and many could instead look for friendlier sentiment in Hong Kong or even on one of China’s newer boards for high-growth, unprofitable companies. Read Full Post…
Bottom line: Apple’s and Samsung’s simultaneous new mobile payment tie-ups with UnionPay indicate Beijing will open the market next year to foreign companies, many of whom may choose to partner with not only UnionPay, but also Alibaba or Tencent.
Apple ties with UnionPay
In what should come as a big surprise to no one, Apple(Nasdaq: AAPL) has formally announced a tie-up with Chinese electronic payments giant UnionPay to bring its Apple Pay service to China as soon as early next year. This particular development isn’t hugely unexpected, since Apple CEO Tim Cook had previously talked of such plans and media reported Apple was close to such a deal last month. (previous post)
What does come as a slight surprise is the addition of Samsung’s (Seoul: 005930) name to the latest reports, as the South Korean smartphone giant announced its own separate deal with UnionPay. Apple’s choice of UnionPay also is a slight surprise, since the earlier reports only said that Apple was in talks with several major Chinese banks. Last but not least, this latest announcement seems to be the strongest indicator yet that China will finally open up its electronic payments market to foreign companies in the first half of next year. Read Full Post…
Bottom line: Qihoo is likely to complete its $9 billion privatization in the next few months at its original bid price, while Jiayuan’s buyer may have to raise its price again to placate unhappy shareholders.
Qihoo buyout advances, Jiayuan hits resistance
The year of the buyout for US-listed Chinese firms is ending on a loud note, with announcement of a formal privatization offer for security software specialist Qihoo 360 (NYSE: QIHU), the largest of the deals among the 3 dozen announced in 2015. But while Qihoo’s plan moves ahead, another older deal to buy out online dating site Jiayuan (Nasdaq: DATE) is running into trouble due to complaints about its low valuation. In the latest development on that front, a major third-party advisory service has recommended that shareholders reject the offer because it’s too low.
Last but not least, I’ll end this buy-out round-up with some whimsical speculation that Phoenix New Media (NYSE: FENG) may be next to receive a privatization offer. My speculation isn’t based on any insider information, but rather the simple fact that the company’s stock jumped 14 percent on Friday for no apparent reason. The company also looks similar to many of the others that have already received similar offers. Read Full Post…
The following press releases and media reports about Chinese companies were carried on December 19-21. To view a full article or story, click on the link next to the headline.
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Apple (Nasdaq: AAPL), Samsung to Enter China Payments Market With UnionPay (English article)
Qihoo 360 (NYSE: QIHU) Enters into Definitive Agreement for Going Private (PRNewswire)
Microsoft (Nasdaq: MSFT) Unveils Plans for China Joint Venture (English article)
Amazon (Nasdaq: AMZN), Oriental Pearl in Cloud Computing Partnership (Chinese article)
BOCI (HKEx: 3988) Sells Nanyang Commercial Bank to Cinda for HK$68 Bln (HKEx announcement)
Bottom line: Alibaba is the biggest winner by keeping its name off an annual US piracy list, but the victory is only partial due to a strong warning in the report to improve its anti-piracy efforts.
US warns Alibaba to step up anti-piracy actions
After months of behind-the-scenes lobbying in Washington, e-commerce giant Alibaba (NYSE: BABA) has managed to keep its name from reappearing on an annual US list of “notorious” global markets for piracy that has just been published. But the victory is really only partial, since the US Trade Representative’s (USTR) office has devoted quite a lot of space to Alibaba in the latest edition of its Notorious Markets report, expressing its concerns about the rate of trafficking in pirated goods on some of Alibaba’s sites.
This long-awaited decision appears to be a compromise, aimed at appeasing some groups that wanted to see Alibaba’s name reappear on the list, including the American Apparel & Footwear Association, which issued several strongly-worded statements on the matter. The matter put the USTR in an awkward position, because it had previously removed Alibaba’s name from the list in 2012, only to see Alibaba strongly criticized for continued rampant piracy by Beijing early this year. Read Full Post…
Bottom line: Sohu is likely to announce receipt of a formal buyout offer in the next few days, while the government in Yingli’s hometown of Baoding should seriously consider a similar buyout bid for the company.
Sohu gives mixed signals on buyout intentions
Amid the current privatization wave that is seeing dozens of Chinese companies launch plans to de-list their shares from New York, Internet industry stalwart Sohu (Nasdaq: SOHU) has announced its own offer that is leaving many people scratching their heads. After a day of looking for answers following Sohu’ss issue of its original announcement of plans for a $600 million investment, Chinese media are now reporting that the company has indeed received a privatization offer.
Meantime, fading solar panel maker Yingli (NYSE: YGE) is probably wishing it would receive its own privatization offer, as it piles up massive losses and its stock rapidly loses value. The company’s shares have been trading below the $1 level in New York since May, prompting the New York Stock Exchange to threaten de-listing for failing to meet its minimum price requirement. Now the company has just announced a reverse share split to bring its stock back above the $1 mark, sparking another sell-off in its shares. Read Full Post…
