Bottom line: China’s traditional broadcasters need to move quickly to forge new, meaningful partnerships with private companies outside the media space, or risk being overtaken by new media rivals.
Mango TV ties with China Mobile
Two of China’s leading regional broadcasters have been in the headlines these last 2 weeks, as they scramble to transform themselves to compete with a new generation of web-based private companies that are rapidly stealing their viewers and advertising dollars. Both stories involve new tie-ups with industry outsiders, reflecting the need to bring in new expertise to help these state-run broadcasters leverage digital and web-based technologies that will dominate the media landscape of the future.
The first big story came 2 weeks ago, when Shanghai Media Group (SMG) signed a landmark deal with e-commerce titan Alibaba (NYSE: BABA) to develop a financial news and information service that could someday take on the likes of global giants like Bloomberg and Reuters (NYSE: TRT). The second came last week, when media reported that Hunan Satellite TV had raised 1 billion yuan ($162 million) in the first private funding round for its fledgling paid video service Mango TV. Read Full Post…
Bottom line: Alibaba’s new video streaming service could presage a buyout offer for Youku Tudou, while Didi Kuaidi’s massive new fund-raising presages a bloody battle with Uber in the hired car services market.
Didi Kuaidi in big new fund-raising
Two major strategic moves are in the Internet headlines today, reflecting growing rivalries between some of the biggest names in the red-hot markets for online video and hired car services. One move has e-commerce giant Alibaba (NYSE: BABA) disclosing its plans to launch a video streaming service that it hopes can emulate the success of US giant Netflix (Nasdaq: NFLX). The second has Didi Kuaidi, which was recently formed by the merger of China’s 2 largest taxi app operators, disclosing it is raising $1.5 billion in new funding to take on the aggressive Uber. Read Full Post…
Bottom line: The see-saw performance of iDreamSky shares after its buyout offer reflects a growing number of speculators in the market for US-listed China shares, while Legend’s Hong Kong IPO is likely to price and debut weakly.
iDreamSky gets buyout offer
As we head into the end of June, the first half of 2015 is set to set an unusual record of becoming the first such period to see a negative number of New York IPOs by Chinese companies. That fact is being driven by a record number of companies that have announced privatization plans, including the latest by mobile game developer iDreamSky (Nasdaq: DSKY). If this latest plan is successful, iDreamSky would also set a new record for shortest time ever as a New York-listed Chinese firm, since the company only made its IPO last August.
Meantime, one actual IPO that is moving forward is coming in Hong Kong, where Legend Holdings, parent of PC giant Lenovo (HKEx: 992), has set a price range, date and chosen a ticker for its offering. This particular deal appears to be getting a ho-hum reception in Hong Kong, as most investors remain fixated on a rally across the Chinese border that has seen China’s domestic stock markets more than double over the last year. Read Full Post…
This week’s Street View takes us off the street and into the air to examine a couple of recent news stories involving objects that caused damage or even death after falling from apartment buildings. My description of these objects as “falling” is somewhat generous, since in at least one case, and possibly both, the objects were carelessly thrown from buildings by people who had little or no concern for consequences their actions might cause.
More broadly speaking this kind of action is an extension of the litterbug phenomenon, which sees some people often treat our streets and sidewalks as a garbage bin for their cigarette butts, empty drink containers and other unwanted things. The problem has certainly improved over the last decade, in no small part thanks to a major public awareness campaign about pollution in general. Read Full Post…
Bottom line: A new strategic investment in LightInTheBox by a major shoemaker is a vote of confidence in its turnaround story, while Bona Film’s buyout offer caps a week of record privatization activity for US-listed Chinese firms.
LightInTheBox gets new strategic partner
Last week’s privatization frenzy for US-listed Chinese firms saw one more company join the queue on the final day of the week, with movie maker Bona Film (Nasdaq: BONA) adding its name to the list of companies looking to end their relationship with fickle New York investors. That final offer brought the number of US-listed Chinese firms receiving buyout offers last week to 5, which must surely be a record for such bids in a single week.
Meantime, another interesting deal has seen underperforming e-commerce company LightInTheBox (NYSE: LITB) receive its own big new investment from one of China’s leading shoemakers. That deal saw Aokang Shoes (Shanghai: 603001) buy about a quarter of LightInTheBox’s shares, hinting at a major new direction for the foreign-focused e-commerce company and also implying it’s unlikely to de-list from New York anytime soon. Read Full Post…
Bottom line: Tsinghua Unigroup’s latest investment in an online lottery ticket seller hints that it may add Internet services to its growing list of high-tech products and services through separate tie-ups with Intel and HP.
Unigroup invests in 500.com
A previously little-known company connected with China’s leading science university has made headlines over the last year through major new tie-ups with global tech titans Intel (Nasdaq: INTC) and Hewlett-Packard (NYSE: HP), which makes its latest investment just slightly puzzling. That investment is seeing Tsinghua Unigroup pour a relatively modest but still significant $124 million into 500.com (NYSE: WBAI), a New York-listed Chinese firm that sells lottery tickets over the Internet.
I’m being just slightly whimsical in tying Unigroup’s latest purchase to its much larger recent tie-ups with Intel and HP, which I’ll recap shortly. But that said, Unigroup has rapidly emerged as a player to watch in a China’s underperforming domestic microchip and IT services sectors, and most of its high-profile investments since it first moved into the spotlight have been centered on efforts to assemble a homegrown Chinese giant in those spaces. Read Full Post…
Bottom line: Xiaomi’s latest moves and remarks reflect attempts to rekindle its fading momentum, as its growth slows and it faces a rising challenge from LeTV and a resurgent Apple.
Xiaomi battles slowing momentum
Sputtering smartphone sensation Xiaomi is in a flurry of headlines as we go into the weekend, spotlighting the recent challenges it is facing as it tries to maintain its breakneck growth and live up to huge expectations it created for itself. The most revealing of those portrays Xiaomi’s charismatic chief Lei Jun in a rare defensive posture, at a company event where he took aim at the increasingly threatening LeTV (Shenzhen: 300104).
The second headline comes from the same event, and boasts of Xiaomi’s heavy spending on content for its online services over the last 2 years, again taking aim at LeTV. Lastly there’s the news that US chip giant Qualcomm’s (Nasdaq: QCOM) China chief has jumped ship to take up an executive position at Xiaomi. Again, this looks like Xiaomi’s attempts to portray itself as a hot company that can still attract top talent away from leading western companies. Read Full Post…
Bottom line: A new management-led privatization bid for Homeinns and many other similar recent plans could stand a 50-50 chance of failing if they don’t complete the process before China’s stock market rally ends.
Homeinns joins privatization queue
Leading budget hotel chain Homeinns (Nasdaq: HMIN) has become the latest US-listed Chinese company to receive a buyout offer, capping a record week that has seen at least 4 such bids. In the past, 4 privatizations in a 6-month period would be considered big, even though such bids have been coming at a slow trickle over the last 3 years for Chinese companies whose shares have languished on Wall Street. But that tickle has turned into a flood these last 2 months, fueled mostly by greed, as company owners look enviously at China’s rallying stock markets that have more than doubled over the last year. Read Full Post…
Bottom line: LeTV will embark on an aggressive content-acquisition and hiring spree in Hong Kong in the second half of this year, as it aims to become the city’s second largest premium video service by the end of 2016.
LeTV challenges PCCW
As Hong Kong’s establishment fights over traditional TV broadcast licenses, mainland high-flyer LeTV (Shenzhen: 300104) is quietly taking aim at the market with a rapid but stealthy entree over the Internet. After a low-key start for a Hong Kong version of its Internet-based video service last fall, China’s leading online video company is rapidly turning up the volume of its local campaign, with plans to spend HK$6 billion ($770 million) to build up its library of local content for the small but lucrative market. Read Full Post…
Bottom line: China’s securities regulator should work with overseas-listed Chinese firms to chart a well-defined path for them to return home to list, to encourage such movement and avoid burdensome bureaucracy.
Chinese “turtles” return home to list
A growing trend that is seeing Chinese firms abandon US listings to return home gained big momentum last week, when 2 more companies announced plans to de-list from New York and a third that privatized 2 years ago moved close to a China re-listing.
In the first category, medical devices maker Mindray Medical (NYSE: MR) announced a management led buy-out offer late in the week, which was followed a day later by a similar offer for solar panel maker JA Solar (Nasdaq: JASO). Meantime, formerly New York-listed outdoor advertising specialist Focus Media took a major step toward becoming the first Chinese company to re-list at home by injecting itself to an existing Shenzhen-traded company. Read Full Post…
Bottom line: Beijing’s latest online video clean-up is part of its drive to guide a bigger transition from a traditional TV to an Internet-based broadcasting landscape, with more similar moves likely over the next 1-2 years.
Beijing cracks down on cartoons
It’s been at least a month or two since Beijing’s latest crackdown on unhealthy Internet content, so it should come as no surprise that the morality police have launched yet another campaign, this time targeting cartoons. The latest dragnet has snared video superstar LeTV (Shenzhen: 300104), Baidu-backed (Nasdaq: BIDU) iQiyi and most other top industry players, who are among 29 companies being investigated in this latest web clampdown.
China’s broader Internet clean-up campaign is now actually entering its second year, and dates back to April last year when leading web portal Sina (Nasdaq: SINA) had its video license revoked for hosting pornographic content. (previous post) Since then, nearly ever major video site has been investigated and punished at one point or another, and social networking sites (SNS) like Tencent (HKEx: 700) WeChat have also embarked on clean-ups of controversial content. Read Full Post…
