Bottom line: An IPO plan for Jupai could raise up to $100 million and perform relatively well if it can sell itself as an asset manager well positioned to profit from China’s real estate downturn.
E-House grooms Jupai for IPO
The year’s first IPO for a Chinese company in New York could finally be in the pipeline, with word that an asset management firm controlled by real estate services firm E-House (NYSE: EJ) has made its first filing for a listing. The plan comes in a broader announcement by E-House, which has transferred its asset management business to a third company called Jupai, which in turn has submitted a draft registration to the US securities regulator in preparation for a proposed IPO.
If the plan goes forward, it could become the first listing for a Chinese company in New York this year, stealing the distinction from another IPO plan by group buying site 55Tuan. IPO watchers will know that 55Tuan filed its listing plan back in January, but missed several deadlines for unexplained reasons without formally saying it is scrapping the plan. (previous post) Read Full Post…
Bottom line: Products like Qufenqi.com that encourage buying on credit are leading a new wave of online financial products, but could lead to irresponsible borrowing and defaults without proper consumer education.
Qufenqi soars on credit buying
China’s recent financial services boom took a new twist last week, when a start-up e-commerce firm specializing in credit-based purchasing won big new funding and a lofty valuation to support its expansion. Kuaile Shidai’s rapid growth extends a wave of new financial products hitting the market, mostly backed by online companies that can quickly establish a national presence and aren’t subject to the same heavy restrictions as traditional firms.
But while most new firms so far have focused on investment services, Kuaile Shidai is attracting customers by selling goods like smartphones and cameras on credit, and then taking repayment in installments. Such a business model is quite common in the west, and lies at the foundation of the credit card system. Read Full Post…
Bottom line: Alibaba’s shares will continue to sag through the rest of the year on any news about the company, whether good or bad, as investors exit the stock to lock in big gains.
Alibaba shares continue downward trend
My earlier theory that shares of e-commerce giant Alibaba (NYSE: BABA) will continue to slump on any news, good or bad, is playing out as the shares re-approach a post-IPO low on a mixed series of headlines about the company. At this point the stock is simply on a downward track, as investors of all ilk who made big profits from the company’s meteoric rise sell their shares to lock in some gains. The pressure looks set to continue for the rest of the year, following the end of a post-IPO lock-up period last month that will allow Alibaba’s earliest investors to join the selling frenzy. (previous post) Read Full Post…
Bottom line: Shanda Games is likely to close its privatization by next month, as group founder Chen Tianqiao finishes dismantling his entertainment empire to try a possible new career in private equity.
De-listing looms for Shanda Games
The long and tortured privatization Shanda Games (Nasdaq: GAME) could finally be near, with word that a group bidding for the faded online gaming giant has finalized its funding for a $1.9 billion buyout. If and when this buyout finally closes, it will mark the end of a privatization bid that began more than a year ago. That would easily make it the most drawn out such buyout among about a dozen major Chinese companies that have left New York over the last 2 years due to lack of interest from investors. Read Full Post…
News of the looming closure of one of Shanghai’s oldest wet markets is once again casting a spotlight on the issue of traditions, and their place in our city is it tries to balance its move into the future while also preserving some of its past. At the same time, a separate story about a new helicopter tour of some Shanghai’s famous sights is igniting another controversy over the high prices for a type of attraction that is clearly part of our city’s future.
These 2 stories nicely summarize the many conflicts between old and new that seem to grip our city on a daily basis. One thing I love about my adopted city is the huge contrasts here that often see people living in very basic conditions on the same streets shared by state-of-the-art high-rises. Read Full Post…
Bottom line: ICBC is likely to ultimately get approval to buy 20 percent of Taiwan’s SinoPac Financial, while Bright Food’s newly closed purchase of Israel’s Tnuva should boost its bid to become China’s first global food group.
Bright Food closes Tnuva buy
I got a sense of deja vu on reading the latest announcement from ICBC (HKEx: 1398), saying China’s leading lender has extended a deadline to buy 20 percent of Taiwan’s SinoPac Financial (Taipei: 2890), 2 years after the tie-up was first disclosed. That’s because this deal looks strikingly similar to another proposed tie-up between leading Chinese telco China Mobile (HKEx: 941; NYSE: CHL) and one of its Taiwan peers, which ultimately crumbled after repeated extensions. In both cases political sensitivities undermined the deals, though such sensitives could play less of a role in the ICBC-SinoPac deal.
At the same time, I’ll also admit my surprise to read that another sensitive deal has closed that will see Shanghai-based food giant Bright Food Group buy Tnuva, Israel’s largest dairy. That deal was first announced about a year ago, but concerns were quickly raised that Israel might veto it over national security concerns. But the latest reports say the purchase has finally closed, handing Bright a major victory in its quest to become China’s first global food giant. Read Full Post…
Bottom line: The failure of 3 major tech leaders to discuss issues confronting their companies at a major forum in China reflect a Chinese preference to avoid thorny issues in public and instead focus on more trivial matters.
Bill Gates, Elon Musk avoid tricky issues at China forum
It’s not often that 2 of the hottest US tech personalities can share the stage with one of China’s biggest Internet names and fail to say anything newsworthy. But that’s exactly what has happened in the southern Chinese city of Bo’ao, where Microsoft (Nasdaq; MSFT) founder Bill Gates and Elon Musk, CEO of electric car sensation Tesla (Nasdaq: TSLA), failed to say much of interest as they shared the stage in a dialogue hosted by Robin Li, founder of leading Chinese search engine Baidu (Nasdaq: BIDU).
The lack of insight is even more notable because both Microsoft and Tesla have faced big challenges in China lately, as the former comes under scrutiny for tax evasion and monopolistic practices, and the latter has fallen far short of its ambitious sales targets. But then again, Robin Li isn’t a reporter, and embarrassing his 2 high-profile guests about their recent woes probably wasn’t one of his big priorities as the at 3 men met at the annual Bo’ao Forum in southern Hainan province. Read Full Post…
Bottom line: A round of April Fool’s Day pranks by China’s Internet companies marks a nice break from their usual cut-throat tactics, while the soaring valuation for a newly created taxi app leader looks more typical for the sector.
Internet firms get into April Fool’s spirit
It’s a relatively quiet news day as we head into April, so I thought I’d take a break from all the latest crackdowns and controversies by looking at some of the clever pranks played by China’s top Internet names on April Fool’s Day. At the same time, one company that’s in no fooling mood is a new taxi app giant that’s being formed with a merger of the 2 top players, and could soon receive an impressive $8.75 billion valuation after a new investment.
These 2 particular headlines don’t really have much in common, since one is largely playful and meant to be fun while the other involves the far more serious business of determining a company’s value. The April Fool’s stories are a nice break from the usual competition and wars of words that are standard fare on China’s Internet. By comparison, bidding up valuations to inflated levels like we’re now seeing with the pending merger of DidiDache and Kuaidi Dache has become standard fare on China’s Internet, as investors bet big on future growth in the market. Read Full Post…
Bottom line: New moves against e-commerce and online video firms are extensions of a broader crackdown on rogue Internet practices, which will slow short-term growth at some companies but ultimately create a healthier business environment.
E-Commerce in China
Crackdowns widen on video, e-commerce
It seems like I write about the latest Internet crackdown far too often these days, as Beijing focuses on a wide range of industries where it wants to clean up what it sees as unhealthy business practices. Another 2 such crackdowns are in the headlines as we head into spring, one in the scandal-wracked e-commerce space and the other in online video. Both crackdowns actually began earlier, and these latest moves just show the regulators don’t feel that their job is finished yet.
Of course it’s a slight oversimplification to say this broader series of crackdowns is coming from a single source, since the commerce regulator has been the main driver behind the e-commerce crackdown and the broadcasting and publishing regulator is behind the video clean-up. But those 2 concurrent campaigns, along with other similar ones, probably underscore a recent resolve by central leaders in Beijing to clean up a Chinese business landscape that’s often riddled with corrupt and illegal practices. Read Full Post…
Bottom line: AP’s willingness to consider new tie-ups with Xinhua is the result of economic pressures being felt by western media, but is unlikely to produce any major alliances due to the potential for negative publicity.
AP open to deeper partnership with Xinhua
Rapid changes in the traditional media realm are creating some strange bedfellows, and the situation looks even stranger in China due to the strong elements of censorship and state control. That odd combination of circumstances is creating a perfect storm that has led some western media companies to do the previously unthinkable and consider partnerships with some of China’s most centrally controlled media. Recent rumors have said that global financial news leader Bloomberg may be considering such a tie-up, and now the latest reports are saying US media giant Associated Press (AP) is also open to such partnerships. Read Full Post…
Bottom line: Beijing’s delay of new rules for foreign tech firms selling to Chinese banks could mark a turning point in a looming trade war centered on cybersecurity, and Washington should move to take reciprocal action.
Beijing slows down on new cybersecurity rules
After months of heating tensions, we’re seeing a sudden pause in the growing friction between China and the west that looked set to erupt into a new trade war centered on the sensitive issue of cybersecurity. That’s my assessment on reading that China is delaying implementation of draconian new requirements that would have forced all foreign tech firms to hand over sensitive and highly confidential product information when selling to Chinese banks.
I’m certainly not being naive in believing that China’s delay in this instance is the result of its realization that there’s no security risk posed by products supplied by foreign tech giants like IBM (NYSE: IBM), Cisco (Nasdaq: CSCO) and Oracle (Nasdaq: ORCL). Instead, this delay is almost certainly the result of repeated protests from the companies themselves and also from Washington and Europe, which all argue the new requirements are overly and unnecessarily intrusive. Read Full Post…
