Bottom line: The exclusion of foreign tech giants from criticism in a prominent annual consumer rights show is unrelated to the broader bias they are facing from Beijing, and they will continue to come under fire for the next 1-2 years.
Foreign techs not targeted on annual consumer rights show
Top China officials at global tech giants like Apple (Nasdaq: AAPL) and Amazon (Nasdaq: AMZN) are probably breathing a sigh of relief today, after their companies weren’t targeted for attacks in an annual consumer rights show that has become a famous for creating public relations nightmares for its victims. Instead, this year’s edition of the investigative Consumer Rights Day program on China Central Television (CCTV), broadcast on March 15 each year, singled out China’s 3 major telcos for criticism in the tech sector.
Multinationals weren’t completely spared from attack, with a number of car makers including Vokswagen (Frankfurt: VOWG), Nissan (Tokyo: 7201) and Daimler (Frankfurt: DAIGn) coming under fire for things like abusive after-sales practices. (English article) But for now at least, China’s central media seem to be backing away from new attacks on foreign tech companies, following recent criticism that Beijing has unfairly targeted such firms for everything from monopolistic practices to posing national security risks over the last year. Read Full Post…
Bottom line: Yahoo’s closure of its Beijing R&D center marks its final withdrawal from China, in a shift mostly related to internal issues but also reflecting the difficulties foreign Internet firms face in the tightly controlled market.
Yahoo closes Beijing R&D center
Nearly 2 years after shuttering its Chinese email service, faded US search giant Yahoo (Nasdaq: YHOO) looks finally set to completely leave the China market, with word that it’s preparing to close up its sizable R&D shop in Beijing. I’m not intimately familiar with Yahoo’s current China assets, but it does appear that this move represents the shuttering of the company’s last major Chinese operation. The move also comes as Yahoo prepares to spin off its sizable stake in Chinese e-commerce giant Alibaba (NYSE: BABA) into a separate company, bringing an end to the company’s decade-long marriage with China. Read Full Post…
Bottom line: Shares of E-House and Leju are likely to trade flat to downward over the next year due to continuing pressure on China’s real estate market, while Renren is likely to get bought out over that period.
Property downturn puts pressure on Leju, E-House
The latest earnings from 2 of China’s 3 top listed online real estate firms reflect the challenges facing the sector, with soaring costs undermining profits at both E-House (NYSE: EJ) and its affiliated Leju (Nasdaq: LEJU). Meantime, a separate earnings report from fast-fading social networking site Renren (NYSE: RENN) shows the former Internet superstar is fast becoming worthless as it sells off assets and its core SNS business shrinks. I expect the end will come soon for Renren, probably in the next 12 months, since the company’s largest asset now is its big cash pot that could attract a buyer who simply wants the money. Read Full Post…
Bottom line: Legend’s Hong Kong IPO this year will attract moderate interest and raise more than $2 billion, while Mango TV could seek up to $800 million in new private funding later this year en route to a potential Hong Kong IPO as soon as 2017.
Mango TV gets funding from China Mobile
Two big fund-raising stories are in the headlines today, casting a spotlight on what could become 2 major IPOs in the pipeline over the next 2 years. The more advanced deal has media reporting that Legend Holdings, parent of PC giant Lenovo (HKEx: 992), is aiming to raise a hefty $3 billion when it goes public later this year in Hong Kong. The second deal has Mango TV, the online video unit of the commercially savvy broadcaster Hunan TV, raising a cool 1 billion yuan ($161 million) in its first private funding round. Such a sum is quite large for a first round of outside fund raising, and the acceptance of private investors hints that Hunan intends to build Mango into an attractive IPO candidate with strong prospects in the online video space. Read Full Post…
Bottom line: The latest negative headlines on Unicom and its confusing earnings reflect its broader dysfunction and a lack of investor interest in its stock, though a major new share buyback could provide a good short-term buying opportunity.
Unicom in big share repurchase
I’ve always wondered which investors were fans of China Unicom (HKEx: 762; NYSE: CHU), which based on media and its own earnings reports is easily the most disorganized and dysfunctional of the nation’s big 3 telcos. Now I’m finally learning the answer to that question, with Unicom’s announcement of a major plan to buy back up to 10 percent of its Hong Kong-listed shares. That would equate to a massive $3.6 billion worth of stock, based on the company’s current market value, in what would easily be one of the biggest share buybacks I’ve ever seen. Read Full Post…
Bottom line: The Baidu-led union of Uber and Yidao in China looks like a smart move for all 3 parties, but could come under strain due to internal and external factors that could ultimately lead Baidu to buy out the venture.
Yidao, Uber to merge in China
China’s rapidly evolving paid car services realm is creating some strange marriages, bringing together e-commerce leader Alibaba (NYSE: BABA) and social networking giant Tencent (HKEx: 700) last month with a merger of their taxi app services. Now we’re getting word of another unusual marriage, this time as leading search engine Baidu (Nasdaq: BIDU) steers domestic heavyweight Yidao into a union with global giant Uber.
This latest deal would come just 3 months after Baidu made a large investment in Uber, reportedly worth $600 million, and would give Baidu a solid foothold in the fast-growing market for Internet-based car hiring services. China’s other 2 Internet majors, Tencent and Alibaba, already had major Internet hired car assets through their strategic stakes in industry leaders Didi Dache and Kuaidi Dache, respectively, which surprised the industry when they announced a plan to merge last month. (previous post) Read Full Post…
As someone who has lived and worked in both China and the west for roughly equal periods over the last quarter century, I can say with relative authority that Chinese pay scales are one of the things that vex me and often seem to defy logic.
The many pay-related inconsistencies in today’s China were on display in a couple of news reports this week showing how many people continue to have high salary expectations despite signs of a maturing economy. One report showed how a huge number of Shanghai workers are considering leaving their jobs due to discontent with annual pay raises that seem quite acceptable by western standards. At the same time, another report showed that annual salaries in Shanghai and other top Chinese cities are starting to actually drop due to a slowing economy, reversing years of rapid gains. Read Full Post…
Bottom line: Unusual scheduling announcements mean the latest quarterly earnings from Youku Tudou and Dangdang could disappoint, though a recent sell-off in their shares looks overblown.
Quarterly earnings announcements often ignite big moves in stocks, sparking big gains or losses if companies exceed or miss market expectations. It’s far less common to see company announcements of when they will release their latest quarterly reports create similar reactions. But that’s exactly what’s happened with the latest such earnings date announcements from struggling online video site Youku Tudou (NYSE: YOKU) and faded e-commerce player Dangdang (NYSE: DANG).
Shares of both companies have tanked to lows not seen in more than a year, following their release of unusual announcements about when they will report their next quarterly earnings. Company announcements of such dates are quite standard industry practice, allowing investors to prepare and attend conference calls to discuss the numbers. Such date announcements typically come 1-3 weeks before the actual results are announced, giving investors adequate time to prepare. Read Full Post…
Bottom line: New developments in the break-up of Shanda Group are likely to result in the successful sales of its games and literature units in the next 6 months.
Cloudary pools resources with Tencent literarture
The slow-motion break-up of former online entertainment superstar Shanda Group continues in 2 different headlines, with word that its core online literature and gaming businesses are set to be taken over by Internet giant Tencent (HKEx: 700) and a couple of major brokerages, respectively, in separate deals. Both of these deals look quite exciting, as they involve the entry of serious-looking buyers who could ultimately use their acquired Shanda assets to create some interesting and potentially competitive new companies in their respective spaces. Read Full Post…
Bottom line: A new wave of overseas investment by Chinese solar panel makers should ease western complaints of unfair state-support and provide a more solid foundation for the sector’s longer-term development.
Solar panel makers migrate overseas
As a settlement to avoid anti-dumping tariffs for Chinese solar panels exported to Europe showed signs of unraveling last week, a new report emerged that showed a more positive trend for a sector that has become the subject of nonstop trade wars over the last 4 years. That newer trend has seen a growing number of embattled Chinese solar panel makers set up overseas factories, helping them to avoid punitive anti-dumping tariffs imposed by the US on their domestically produced goods. Read Full Post…
Bottom line: Alibaba’s combining of its mapping and web browser units under a single leader marks the start of a necessary rationalization of its many acquisitions over the last 2 years, which could produce some odd pairings.
Alibaba combines UCWeb, AutoNavi units
After nearly 2 years of making billions of dollars in strategic acquisitions, we’re finally seeing an attempt by e-commerce giant Alibaba (NYSE: BABA) to integrate and rationalize some of those purchases through new tie-ups and other pooling of assets. In this case the integration is coming in an executive move, which is seeing the founder of its AutoNavi online mapping division leave the company. His former position will be taken over by the founder and head of Alibaba’s UCWeb browser division, combining the 2 units under the leadership of a well-respected tech leader named Yu Yongfu. Read Full Post…
