Bottom line: China’s new rules for technology manufacturers over cybersecurity concerns will erupt into a war of words between Beijing and the west this year, and could result in one or more formal complaints to the WTO.
Western firms respond to tough cybersecurity restrictions
After clashing for much of 2014 over a series of antitrust probes that seemed to target big multinationals, China and the west look set for a new showdown in 2015 over broadening rules by Beijing aimed at protecting national security. The growing clash saw the foreign companies, many from the US, take the unusual step of formally complaining last week over new Beijing rules that they complain are increasingly intrusive and opaque. Beijing fired back by saying the rights of foreign technology firms would be protected in accordance with Chinese law. Read Full Post…
Bottom line: Focus Media’s plan for a backdoor listing in China stands a better than 50 percent chance of success, potentially opening a new re-listing path for Chinese firms whose shares are undervalued in New York.
Focus Media eyes China backdoor listing
Former advertising services high-flyer Focus Media is eying a plan to become listed again, with an ambitious target of tripling its value from just 2 years ago when it privatized. If the plan really works, it could create an attractive template for a return to publicly-traded status for the group of about a dozen Chinese companies that were formerly listed in New York but privatized after their shares became undervalued. The key to the plan appears to be a decision to list back at home in China, where Focus’ name is more familiar and local investors are far less sophisticated and prone to hype and overinflating values of well-known companies. Read Full Post…
I often write about the Shanghai subway in the context of its many quirks and special features, but this week a different kind of underground story from the world of extreme sports caught my attention. The tale involved a man who created a sport out of literally outrunning a Shanghai subway train.
The man got off at one station, then ran out and onto the street, before re-entering at the next station in time to get on the same train he just exited. This kind of extreme sport is quite common in the west, where people often like to test their athletic ability by posing unusual challenges that pit them against nature, technology and other forces. Read Full Post…
The following press releases and media reports about Chinese companies were carried on February 6. To view a full article or story, click on the link next to the headline.
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Focus Media To Make A-Share Listing Via Shell Company, Valued At 50 Bln Yuan (Chinese article)
Anbang Prepares To Buy South Korea’s Eighth Largest Life Insurer (Chinese article)
Bottom line: Qihoo’s apparent attempt to unify its various products around the 360.com brand looks smart strategically, but it needs to improve its search and cellphone businesses to win back investor interest.
Qihoo pays record for 360.com domain
I’m not usually someone to write about publicity stunts, but one such new ploy by struggling security software maker Qihoo 360 (NYSE: QIHU) has piqued my interest as it hints at some major new strategic moves. The actual news is quite straightforward, saying Qihoo has paid a record $17 million for the 360.com web domain. This news was almost certainly leaked by Qihoo, since companies pay large sums for domains all the time and the news never makes big headlines since it is kept private. That hints that Qihoo may have big plans for 360.com, most likely as a platform to unify its current stable of domains and brands. Read Full Post…
Bottom line: New global e-commerce moves by JD and LightInTheBox look well conceived and could yield some strong results, while Baidu’s new e-commerce investment reflects its lack of focus and broader strategy in the space.
LightInTheBox opens US warehouse
A flurry of e-commerce moves are in the headlines today, including new globalization steps by number-two player JD.com (Nasdaq: JD) and the struggling LightInTheBox (NYSE: LITB). Meantime, search leader Baidu (Nasdaq: BIDU) is also in the headlines as it searches for its own e-commerce business model, with reports it has made a major investment in a site being developed by PC giant Lenovo (HKEx: 992). The flurry of moves reflects the hyperactive state of competition in China’s e-commerce market, which requires constant innovation in order to survive. Read Full Post…
Bottom line: Chinese brokerages will embark on a buying binge for targets in Hong Kong and debt-strapped European countries, with as many as 3 or 4 more deals likely this year after Everbright’s purchase of SHK Financial.
Everbright buys HK brokerage
Everbright Securities (Shanghai: 601788) is joining the list of Chinese brokerages that have suddenly become quite acquisitive, with word that it will buy the brokerage arm of Hong Kong real estate giant Sun Hung Kai (HKEx: 16). Everbright’s move comes amid a flurry of other activity that has seen Chinese brokerages forge new tie-ups and raise big funds for M&A as they seek to expand abroad. Hong Kong looks set to emerge as one of the most popular targets for new tie-ups, thanks to its status as a crossroads between the Chinese and international investment communities. Read Full Post…
Bottom line: Disney’s decision to delay the opening of its Shanghai theme park looks wise, and should help it to avoid some of the negative publicity that usually occurs with the launch of such major projects.
Disney delays Shanghai park opening
In what should come as a big surprise to no one, media are reporting that Disney (NYSE: DIS) is delaying the planned opening for its massive Shanghai theme park by up to half a year due to a number of issues. On the surface at least, this particular news isn’t completely unexpected but certainly doesn’t sound encouraging. But I would take a different view and say the decision actually looks encouraging, as it shows that Disney is willing to suffer from some negative short-term publicity now to make sure that the opening is a good one when it finally comes. Read Full Post…
Bottom line: China’s overall Internet growth will continue to slow as the market starts to become saturated, with messaging and other mobile services continuing to steal share from microblogging and video operators.
Microblogging decline bites Weibo
A newly released annual government report on China’s Internet is full of good news for the online business community, with most sectors posting double-digit growth as overall penetration neared the 50 percent mark. But a few sectors stood out as distinctive losers in the report from the China Internet Network Information Center (CNNIC), led by the microblogging space that saw a sharp decline in users.
That’s not too surprising due to departures or pull-backs in the space last year by big names like NetEase (Nasdaq: NTES) and Tencent (HKEx: 700), though it certainly doesn’t bode too well for sector giant Sina Weibo (Nasdaq: WB). Another relative loser was online video, which posted only tiny growth last year as the sector came under regulatory assault aimed at reining in companies like Youku Tudou (NYSE: YOKU) and Baidu’s (Nasdaq: BIDU) iQiyi. Read Full Post…
Two big news stories were at the center of heated discussion in of the microblogging realm this past week, led by Alibaba’s (NYSE: BABA) high profile dispute with one of China’s main business regulators over accusations of being soft on piracy. At the same time, Tencent’s (HKEx: 700) roll-out of advertisements on its WeChat mobile messsaging platform also drew lots of comments, as users were suddenly greeted with unsolicited messages in the popular Moments feature that functions much like Facebook’s (Nasdaq: FB) newsfeeds.
Of course no weekly microblogging round-up would be complete without a mention of the media savvy Xiaomi, which was once again creating buzz after an embarrassing gaffe by global marketing chief Hugo Barra. That gaffe saw Barra use a politically incorrect version of a map of India in one of his presentations, showing India as the correct owner of parts of a disputed area of its long border with China. Read Full Post…
Bottom line: SAIC’s foray with GM into Indonesia could stand a moderate chance of success, while BYD’s new auto financing joint venture is unlikely to provide a major boost for its stalling EV campaign.
BYD gets approved for auto finance JV
Two of China’s more innovative automakers are in the headlines today, making interesting moves as each looks to maintain growth as the domestic car market sputters. One move will see domestic leader SAIC (Shanghai: 600104) make a new attempt to move outside China with plans to open an Indonesian factory with US joint venture partner General Motors (NYSE: GM). The second move has the sputtering BYD (HKEx: 1211; Shenzhen: 002594) getting government approval to launch a vehicle finance joint venture, which could potentially help to jump-start its stalling electric vehicle (EV) program. Read Full Post…
