The following press releases and media reports about Chinese companies were carried on December 8. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
Taiwan’s TSMC (Taipei: 2330) to Build $3 Bln Chip Plant in Nanjing (Chinese article)
Homeinns (Nasdaq: HMIN) Enters into Definitive Merger Agreement (PRNewswire)
Alibaba’s (NYSE: BABA) AliExpress to Collect Annual Service Fee (English article)
Unicom (HKEx: 763) Announces Launch of Wo 4G+, to Explore Network Sharing (HKEx Announcement)
Huayi Bros (Shenzhen: 300027) Pays 1 Bln Yuan for 70 Pct of Feng Xiaogang’s Firm (Chinese article)
Bottom line: The latest muddled comments from Lenovo founder Liu Chuanzhi could reflect his growing frustration with CEO Yang Yuanqing, who could be forced out in the next year if the company’s performance doesn’t improve.
Lenovo’s Yang looks for new rice bowl
It’s no mystery that PC giant Lenovo (HKEx: 992) has been stumbling in the last 2 years due to bad execution in the smartphone space. But slightly more mystifying are new remarks by company founder Liu Chuanzhi on his views about his self-groomed successor and CEO Yang Yuanqing. Liu is currently chairman of Lenovo parent Legend Holdings (HKEx: 3396) and is 71, which isn’t too old. But his remarks on Yang’s performance on the sidelines of a recent event make him seem a bit muddled and also convey the conflicting feelings of loyalty and frustration that he must be feeling about his appointed successor.
Before I attempt to translate his actual remarks, we should put the Lenovo story into a bit of context to understand what Liu is saying. Yang Yuanqing is famous for building Lenovo into a global PC giant through an aggressive acquisition strategy, which began with the landmark purchase of IBM’s (NYSE: IBM) PC business in 2005 and later included other acquisitions in such diverse markets as Germany, Brazil and Japan. Read Full Post…
Bottom line: Richard Li’s investment in ZTE reflects the company’s improving position after an overhaul during the last 2 years, while Pony Ma’s sell-down of his Tencent stake looks like ordinary share selling by a company founder.
Pony Ma sells Tencent, Richard Li buys ZTE
A couple of stock sales are in the news as we head into the new week, led by Pony Ma’s sale of a massive HK$3.8 billion ($500 million) worth of shares in his company, social networking giant Tencent (HKEx: 700). While Ma was busy cashing out some of his stake, Hong Kong’s Richard Li, son of billionaire Li Ka-shing, moved in the other direction by boosting his stake in ZTE (HKEx: 763; Shenzhen: 000063), the telecoms company emerging from a major overhaul over the past 2 years.
Of these 2 moves, the latter is probably more significant since it marks a vote of confidence in the turnaround story of ZTE by Li, whose investment decisions are fairly well respected though nothing like those by his much better-known father. Pony Ma’s sell-down of his stake looks more routine, though it’s still a relatively large portion of his sizable holdings in China’s second most valuable Internet company, with a market value of $180 billion. Read Full Post…
Bottom line: Alibaba’s new announcement of expansion in France and Germany looks largely incremental rather than a major move, and is aimed at creating positive buzz around its international growth story.
Alibaba names France country head
E-commerce giant Alibaba(NYSE: BABA) is closing out 2015 with a couple of big new hires in Europe, as it tries to give investors new reason to cheer about its future growth prospects. But a closer read of the announcement detailing the hires of country chiefs in France and Germany reveals a distinctly Chinese story, rather than the global expansion tale that many investors are eagerly awaiting.
In this case, Alibaba is choosing to focus on how the new office openings in France and Germany will help merchants in those markets sell into China. That’s part of a broader trend that has seen Alibaba, archrival JD.com (Nasdaq: JD) and global names like Amazon (Nasdaq: AMZN) and Wal-Mart (NYSE: WMT) try to offer more global brands to increasingly affluent Chinese consumers who are willing to pay more for these trusted names. Read Full Post…
The following press releases and media reports about Chinese companies were carried on December 5-7. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
Ola, Didi Kuaidi, Lyft and GrabTaxi Gang Up to Kill Uber (English article)
Bottom line: Mango TV’s scaled-back new funding reflects the potential and stiff competition in China’s online video market, while Lufax’s Chinese and foreign roots could make it a name to watch in the emerging private financial services sector.
Mango TV nears $1.5 billion funding
Two fund-raising deals likely to be among China’s largest next year are in the headlines as we close the week, led by a major paring back of plans by upstart online video company Mango TV. The other news is shedding more light on aggressive expansion plans by Lufax, another upstart in the peer-to-peer (P2P) lending space, which is in the process of seeking $1 billion in new funds.
Let’s jump right in with the Mango deal, which is reportedly close to wrapping and will see the company raise $1.5 billion. (Chinese article) I’m admit I’m not completely sure that the figure is US dollars, as the Chinese report doesn’t specify if it’s dollars or Chinese yuan. But the US dollar figure is more consistent with reports last month, which said Mango was seeking to raise up to 20 billion yuan, or about $3.2 billion in its second funding round. (previous post) Read Full Post…
Bottom line: iKang’s poison pill plan will kill a hostile offer for the company but could force a management-led group to raise its earlier bid, while CMGE’s China backdoor listing shows a quickening of the process for US-listed Chinese companies to return home.
iKang launches poison pill plan
The first bidding war for a Chinese company looking to privatize from New York has taken an interesting twist, with word that medical clinic operator iKang (Nasdaq: KANG) has launched a shareholder rights program often called a “poison pill”, aimed at preventing hostile takeovers. Usually I’m relatively neutral on this kind of defensive move, as it’s often aimed at getting shareholders better value for their money. But in this case the move seems like a somewhat abusive use of power by iKang’s founder and chief executive to protect his own earlier and significantly lower buyout offer for the company.
Meantime another headline from the recent wave of US-listed Chinese companies to privatize has gaming company China Mobile Games (CMGE) already preparing to re-list in China. If successful, CMGE’s homecoming would be remarkably quick, since it only completed its privatization from New York 3 months ago. Read Full Post…
Bottom line: Baidu’s disposal of its problematic music division looks like a smart move that was long overdue, while its new tie-up with Amazon looks minor but could get much bigger if it expands into the e-commerce sector.
Baidu in Christmas time tie-ups with Amazon, music company
Leading search engine Baidu(Nasdaq: BIDU) is in the headlines with a couple of big strategic moves, led by an intriguing new tie-up with Amazon (Nasdaq: AMZN) that could have broader implications in the e-commerce space. The other news has Baidu merging its problematic music division, which was historically plagued by piracy issues, into a new company headed by an entertainment firm called Taihe Music Culture Development.
Both moves represent incremental strategic tweaks for Baidu, as it tries to expand beyond its core online search business into other areas of the Internet. The Amazon alliance looks relatively superficial, but could hint at a broader future tie-up that might see the companies work together in China’s lucrative but highly competitive e-commerce space dominated by Alibaba (NYSE: BABA) and JD.com (Nasdaq: JD). Read Full Post…
The following press releases and media reports about Chinese companies were carried on December 4. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
Mango TV to Complete 1.5 Bln Yuan Funding Round in January (Chinese article)
BaiduMusic (Nasdaq: BIDU), Taihe MusicGroup to Merge into New Company (English article)
Aston Martin Turns to China’s LeTV (Shenzhen: 300104) to Soup Up Supercars (English article)
iKang Healthcare (Nasdaq: KANG) Adopts Shareholder Rights Agreement (GlobeNewswire)
Didi, Lyft Entering Four-Way Alliance to Take on Uber for Rides (English article)
Bottom line: P2P lending platform operator Lufax will attract mostly state-owned investors for its latest $1 billion funding round, setting the stage for a 2016 Hong Kong IPO worth $2 billion or more.
P2P lender Lufax eyes $1 bln funding
It seems I may have underestimated the clout of peer-to-peer (P2P) lending platform operator Lufax when I said in August it could be eyeing a 2016 IPO in the neighborhood of $500 million. That IPO still looks likely to come next year, most likely in Hong Kong. But it could be much larger, based on reports of a new mega-funding that would value the company at a whopping figure of up to $20 billion.
The new valuation would mark a huge jump from earlier this year, when Lufax was valued at $10 billion after its most recent $500 million funding round in April. (previous post) The bigger picture is that China’s P2P lending sector is growing fast but also rapidly consolidating, as Beijing weeds out smaller players that have been accused of everything from fraud to other practices that put individual lenders at too much risk. Read Full Post…
Bottom line: Facebook’s plans for a Taiwan data center reflect its big hopes for Asia, and could portend its long-sought receipt of permission to open a China service next year through a local joint venture.
Facebook eyes Taiwan data center
As the rest of the world buzzes over Mark Zuckerberg’s new daughter and philanthropy plans, other media reports are providing new signals involving his ongoing aspirations to bring his Facebook (Nasdaq: FB) empire to the world’s biggest Internet market in China. In all fairness, those reports that Facebook is studying a plan to set up its first Asian data center in Taiwan don’t necessarily point directly to its separate China aspirations.
But Taiwan is certainly much closer to China than the US, and a data center there would make Facebook quicker for people in China to access if and when Beijing ever decides to open its doors to the world’s largest social networking service (SNS). That said, Asia is already a huge region for Facebook, accounting for about a third of its 1.5 billion users worldwide. Thus a data center in Asia makes sense for Facebook to better serve that base of about 500 million users. Read Full Post…
