Bottom line: Baozun’s IPO should achieve its $200 million fund-raising target and the stock could perform relatively well for the rest of the year if it can show that it will become profitable for all 2015.
Baozun files for $200 mln IPO
The first serious Internet IPO of the year could finally be in the pipeline, with word that e-commerce services provider Baozun has filed for a New York listing that would be a first-of-its-kind for this type of company. Media are calling Baozun an e-commerce firm, but the reality is that the company helps others design and operate e-commerce sites, meaning it doesn’t have to compete itself in the fiercely competitive space.
The company’s largest shareholder is actually e-commerce leader Alibaba (NYSE: BABA), which holds 23 percent of Baozun. That relationship underscores Baozun’s unique market position as a service provider rather than actual website operator, and the company cited third-party data saying it currently controls about 20 percent of its market. The Alibaba relationship also provides important ties with many major retailers that already do business on Alibaba’s hugely popular Tmall. Read Full Post…
Shanghai Auto Show says goodbye to sexy car models
Many car fans in Shanghai may be bracing for a shock next week, as the biannual Shanghai International Automobile Industry Exhibition gets set to hold its first-ever edition without skimpily-clad models draping themselves over cars and prancing around the stages. Of course I’m being just slightly sarcastic in saying car buffs may be disappointed, since most of these people probably go to the show to see the automobiles and other latest accessories and gadgets on display.
Instead, the highly-discussed decision to ban the usual sexy models from this year’s Auto Show could disappoint some of the many mainstream consumers who might secretly come more to watch people than actual cars. Some might argue the decision seems overbearing and a bit of a killjoy. But the reality is it should bring a much-needed degree of respect to Chinese trade shows that are sometimes ridiculed by foreigners for their circus-like atmosphere. Read Full Post…
Bottom line: P2P lenders like Lufax and Jimu Box have become the latest hot ticket for Chinese Internet investors, and one or more could make an IPO later this year to seize on the positive sentiment.
Lufax raises $500 mln
I remember a time not long ago when China tech deals worth just $10-$20 million were considered big and worthy of news, as such sums looked big when the sector was just starting to develop. Nowadays the threshold has risen sharply as both domestic and international investors flood into the space. That’s definitely the case with the latest mega-deal, which has seen peer-to-peer (P2P) lending platform operator Lufax raise a cool $485 million in new funding round, a record for the fast-emerging space.
Bottom line: CICC’s IPO later this year will attract lukewarm investor interest due to its fading prospects, forcing it to scale back its plan to raise up to $1 billion.
CICC to get lukewarm reception in HK
A new story on homegrown investment bank CICC is casting a spotlight on the kind of interesting but also somewhat uninspiring Chinese companies that are likely to make offshore IPOs this year, after last year’s bumper crop of offerings that included a far more exciting field of candidates. Yesterday I wrote about Legend Holdings, parent of PC giant Lenovo (HKEx: 992), which wants to raise $2-$3 billion through a listing in Hong Kong. Like Legend, China International Capital Corp (CICC) is a company that’s unlikely to excite investors but could still draw a some interest as a decidedly second-tier player. Read Full Post…
Bottom line: Yum’s new upscale Italian restaurant looks like a smart concept for the China market, but a broader campaign to move its Chinese KFC stores upmarket looks like too little too late.
A year after announcing plans for a major overhaul of its aging Chinese KFC stores, Yum Brands (NYSE: YUM) is adding another prong to its China reboot with the launch of an upscale Italian eatery as it tries to to regain relevance in its most profitable market. Yum’s newest China restaurant brand, Atto Primo, is situated in the heart of the Shanghai Bund, home to some of the city’s oldest and most famous buildings and most expensive restaurants. Yum is calling the restaurant a “lab” for now, but I suspect it could quickly expand the concept with new outlets if it proves popular. Read Full Post…
Bottom line: Legend Group’s IPO should get a solid reception, and Alibaba’s separately listed drug and film units should also perform well over the next few years as the Hong Kong stock exchange gains popularity for China tech firms.
Legend makes first public filing for HK IPO
A pair of stories today are casting a spotlight on Hong Kong and its future potential as a hotbed for Chinese tech listings. One of those involves e-commerce leader Alibaba (NYSE: BABA), which wanted to make its record-breaking IPO in Hong Kong last year but ultimately chose New York due to ownership issues. The second involves Legend Holdings, parent of PC giant Lenovo (HKEx: 992), and one of China’s oldest and most respected private tech companies.
The first news bit has Alibaba injecting the pharmacy business from its popular Tmall online shopping mall into its Hong Kong-listed Alibaba Health (HKEx: 241) unit. The second has Legend Holdings making its first public filing for a long-planned listing in Hong Kong that should happen later this year, including some of the first official financials we’ve seen for the IPO. Read Full Post…
Bottom line: China’s Ninebot most likely purchased Segway for less than $100 million to get its technology, and could make a New York IPO by 2017 that will value the firm at $2-$5 billion.
Ninebot buys Segway
If you can’t beat ’em, then buy ’em. That seems to be the philosophy at a Chinese firm called Ninebot, which has just announced it has purchased US rival Segway, maker of a trendy type of 2 wheel, stand up vehicle used to travel short distances. The pair of companies previously had a stormy relationship, as Segway had accused Ninebot of intellectual property theft. So this new purchase should formally end the copycat allegations. Read Full Post…
Bottom line: More Chinese online video companies could soon follow LeTV onto the global stage as their home market soars, providing competition in smaller markets to locally entrenched players like Hong Kong’s PCCW and TVB.
LeTV marches into HK
China is generally considered a technology follower rather than a leader, but new data are showing an exciting trend that could see it finally emerge as a global innovator in Internet-connected video services. The factors behind this movement are uniquely Chinese, and stem from a huge pent-up demand in China for quality video services. Such services are finally starting to come from a growing range of private companies led by names like LeTV (Shenzhen: 300104), Xiaomi and Youku Tudou (Nasdaq: YOKU), which are far more innovative and nimble than the stodgy state-run firms that dominate the traditional broadcasting sector.
Those newer companies are showing early signs of trying to go global, using Hong Kong and other Southeast Asian markets as their stepping stones onto the world stage. Such markets are relatively small and rely heavily on western content, making them particularly fertile ground for some of these Chinese firms that can create and distribute content more suitable for Asian audiences. Read Full Post…
Bottom line: A merger between 58.com and Ganji looks like a smart pairing that would create a clear leader in online classified ads with a market value worth up to $8 billion.
58.com eyes Ganji
China’s Internet world has been buzzing these last 2 days on a steady stream of reports involving a possible merger between leading online classified advertising site 58.com (NYSE: WUBA) and Ganji, one of its biggest rivals. The reports have been somewhat conflicting, some saying a deal is imminent and others saying talks have stalled, but it’s clear that something is happening behind the scenes. The deal certainly looks quite exciting if it’s happening, as it would create a clear market leader anchored in the well-run 58.com, which is often called the Craigslist of China.
This kind of merger often fails to happen in China for reasons of pride, as many of these company founders are fiercely independent entrepreneurs who would rather see their empires slowly crumble than sell to someone else. But more recently we’ve seen some of these entrepreneurs become more realistic and realize they can’t survive as independent companies, and I suspect that’s what’s happening in this case. Read Full Post…
The following press releases and media reports about Chinese companies were carried on April 15. To view a full article or story, click on the link next to the headline.
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Ganji, 58.com (NYSE: WUBA) To Merge – Report (Chinese article)
Bottom line: Shares of Tencent and Alibaba are overvalued and will stagnate or fall for the rest of the year, while a group trying to buy out Sungy Mobile may have to raise its offer but should succeed in privatizing the company.
Froth builds on Tencent stock
It seems I was partly wrong when I previously said that e-commerce giant Alibaba (NYSE: BABA) was quite expensive following its record-breaking IPO last year, and that its value would gradually sink to a level comparable with rival Tencent (HKEx: 700). In this case I wasn’t wrong in thinking the 2 companies should be comparably valued. Instead, I should have focused on the potential for a rally in Tencent shares, which have risen sharply to approach Alibaba’s level since the start of the year.
While those 2 companies look comfortably situated in the stratosphere of Internet valuations, the same can’t be said for mobile game operator Sungy Mobile (Nasdaq: GOMO), which has just announced its receipt of a management-led buyout offer. If the attempt succeeds, it would mean Sungy’s life as a publicly traded company could end after less than 2 years, the briefest for a listed Chinese company that I’ve ever seen. Read Full Post…
