Bottom line: Alibaba’s new fund-raising activities are relatively small but provide insight about its future direction, hinting at a major pushes into the gadget and financial services spaces.
Alibaba, Foxconn invest in Pepper
A couple of new fund-raising headlines involving e-commerce giant Alibaba (NYSE: BABA) show company founder Jack Ma engaged at one of the things he does best, namely making deals and forging new partnerships. Neither deal is particularly big in terms of dollar investment, but both provide some insight on the kinds of partners and tie-ups that Ma is pursuing for both the New York-listed Alibaba and its separate but affiliated Ant Financial unit. Read Full Post…
Bottom line: Oriental Pearl’s new purchase of a stake in a set-top box and TV maker is part of a broader series of recent moves that could help position it to emerge as a viable rival to China’s private online video companies.
SMG buys into TV maker MTC
State-run broadcaster Shanghai Media Group (SMG) is wasting no time telling the world who it sees as its main rivals, with word that the company is buying a major stake in a TV and set-top box maker after completing an overhaul of its own digital TV assets. Anyone who follows the industry will know that the high-flying LeTV (Shenzhen: 300104) appears to be the major target of this new SMG tie-up, which is seeing the company’s newly launched Oriental Pearl (Shanghai: 600637) digital video unit purchase a major stake in a Shenzhen-listed company called MTC (Shenzhen: 002429) for 2.2 billion yuan ($350 million). Read Full Post…
Flooded streets filled the Shanghai headlines for much of this week, but local officials were also working hard to make sure another, more upbeat story also shared the spotlight with early Plum Rains that caused massive headaches for commuters. Film buffs will know I’m talking about the annual Shanghai International Film Festival, which tries to showcase the city’s rising position in China’s rapidly evolving entertainment industry.
I’ve previously written about Shanghai’s entertainment sector, which was a trend-setter during its heyday in the early 20th century but later became neglected as local focus shifted to the city’s financial industry. But 2 events at the latest film festival caught my attention, and seemed to show our city is finally taking more serious steps to try and develop a creative entertainment culture that can be a true leader rather than just a follower. Read Full Post…
Bottom line: Google is likely to soon announce that Huawei will make its next generation of Nexus smartphones, in an alliance that looks savvy for both companies for political and practical reasons.
Google, Huawei preparing Nexus partnership?
Global search giant Google (Nasdaq: GOOG) is continuing its low-key drive back to China, with word the next model from its Nexus line of smartphones will be produced by fast-rising domestic brand Huawei. The move is unconfirmed and sourcing in the reports comes from an unnamed Huawei employee.
But such a move would certainly be consistent with Google’s other recent actions, which have seen it moving quietly behind the scenes for a more active role in China’s smartphone market, the world’s largest. Despite its lack of formal presence, Google already enjoys a huge passive role in the market due to the huge popularity of its Android operating system, which is used by nearly all of China’s homegrown smartphone makers. Read Full Post…
Bottom line: New fund raising by Ctrip and Tujia looks like far more than either company needs, and is part of a broader wave seeing Chinese Internet sites raise big funds to take advantage of strong investor sentiment.
Tujia raises $250 mln
Someone recently asked me why so many companies in China are currently rushing to raise cash, and, after some quick thought, I provided my best answer: Because they can. That seems to be the mentality among Chinese companies these days, including leading online travel agent Ctrip (Nasdaq: CTRP), which has just issued bonds to raise a cool $1.1 billion in new cash that it really doesn’t need. But that statement isn’t completely true, as Ctrip is in another headline that has it joining in a new $250 million funding round for Tujia, China’s equivalent of Airbnb. Read Full Post…
Bottom line: Uber and rival homegrown Chinese hired car services are likely to ultimately get a green light to operate throughout China, providing a much-needed shot of competition to traditional taxi fleets.
Uber plows big bucks into China
Anyone who thought that US hired car services hotshot Uber might be stalling in China might want to reconsider that view, following new reports that say the company has budgeted a cool $1 billion for its China expansion this year. The reports are all citing an internal company email, which strongly suggests that Uber deliberately leaked the message to quash any talk that it might be losing its resolve to push ahead in a China market that is quite difficult but also has huge profit potential.
At the same time, another report is saying that Uber and other providers of similar hired car services could ultimately find their business model outlawed, as a number of cities consider banning or heavily restricting the use of private cars that compete with traditional taxis. I seriously doubt that will happen, however. That’s because Beijing has shown an usual desire to accommodate these newer, high-tech services that have the potential to drive China’s economy in the future as many traditional industries lose momentum. Read Full Post…
The following press releases and media reports about Chinese companies were carried on June 19. To view a full article or story, click on the link next to the headline.
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Alibaba’s (NYSE: BABA) Ant Financial Valued at $45 Bln After New Funding: Source (English article)
Huawei to Make Nexus Smartphones for Google (Nasdaq: GOOG) – Employee (Chinese article)
Bottom line: More than $20 billion in new fund-raising deals by China companies outside the country reflects the huge amount of global money now chasing Chinese investments, lured by the nation’s soaring stock markets.
Billions flood into Chinese companies
I was so surprised by the number of major new China-related deals churning through the fund-raising system that I decided to do some math, which showed that 5 deals in the headlines today were worth a staggering total of $21 billion. Those deals involved a wide range of topics, led by a new $9 billion privatization bid for software security specialist Qihoo 360 (NYSE: QIHU), the largest such plan to date among a wave of Chinese firms de-listing from New York.
That deal was followed in size by another similar one from Focus Media, whose $7.4 billion plan to re-list in Shanghai following its own New York privatization has hit an unexpected hurdle with an investigation of the shell company that is hosting the backdoor listing. The there’s a hefty $3.5 billion fund-raising plan by leading brokerage Citic Securities (HKEx: 6030; Shanghai:006030), which has attracted 2 of Singapore’s leading investors as it prepares to issue new shares in Hong Kong. Read Full Post…
Bottom line: Cisco’s dismissal of several top China executives reflects its struggles in the market, and the situation will only improve if it takes a more conciliatory approach to address Beijing’s national security concerns.
Cisco lays off China execs
Beijing’s ongoing clampdown on foreign tech companies over national security concerns is taking a toll on Cisco (Nasdaq: CSCO), with word that the US networking equipment giant is laying off several of its top local executives due to falling China sales. This particular development doesn’t come as a huge surprise due to Beijing’s recent obsession with national security and suspicion of foreign tech companies. But Cisco’s struggles do contrast sharply with that of Hewlett-Packard (NYSE: HPQ), which appears to be faring better in China due to its more conciliatory approach to address Beijing’s concerns.
The following press releases and media reports about Chinese companies were carried on June 18. To view a full article or story, click on the link next to the headline.
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Citic Securities (HKEx: 6030) Seeks $4.7 Bln in Share Sale; Temasek Among Buyers (English article)
Qihoo 360 (NYSE: QIHU) Announces Receipt of Proposal to Acquire the Company (PRNewswire)
Alibaba (NYSE: BABA), Foxconn in Talks to Invest $500 Mln in India’s Snapdeal (English article)
Trina Solar (NYSE: TSL) Plans $500 Mln India Plant Amid Ban (English article)
Imax (NYSE: IMAX) Sets China Unit IPO Goal at $300 Mln (English article)
Bottom line: A probe against WeChat in Taiwan is likely to see its local offices shut down and Tencent evicted, reflecting the many challenges Chinese tech companies will face as they try to expand abroad.
WeChat faces Taiwan eviction
Taiwan may share many cultural traits with China, but its government certainly doesn’t seem to have much love for Chinese technology. The list of Chinese firms running into trouble on the island has just gained a new member, with word that Tencent’s (HKEx: 700) hugely popular WeChat is facing eviction from Taiwan for possibly violating local investment rules.
This brewing setback is interesting mostly for political reasons, and also because it reflects the troubles that WeChat has faced in its fledgling global expansion. From a practical perspective, Taiwan looks like an easy market for Chinese tech companies due to the shared language and culture. But the fact is that Taiwanese preferences are often quite different from China’s, and in this case the reality is that Japan-leaning Taiwanese far favor rival Japanese product Line to WeChat. Read Full Post…
