Bottom line: The broadcasting regulator needs to rethink the way it treats online video companies and create a uniform set of standards that apply to both to them and traditional TV stations.
Tencent ties up with NBA
Internet giant Tencent (HKEx: 700) made headlines last week with an exclusive deal to broadcast live NBA games over the Internet in China, literally scoring a major victory over its rivals in the hotly contested online video space. But having won that victory over its Internet peers, it’s probably only a matter of time before China’s traditional TV broadcasters call foul and complain that Tencent’s deal will compete with their own live broadcasts of hugely popular NBA basketball games. Read Full Post…
The following press releases and media reports about Chinese companies were carried on February 3. To view a full article or story, click on the link next to the headline.
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Alibaba (NYSE: BABA) Ant Financial Unit Weighs Private Placement, Valued At $50 Bln (English article)
WeChat Freezes Out Alipay, Sets Stage For Lunar New Year’s Red Envelope War (Chinese article)
Everbright Securities Agrees to Buy Hong Kong’s SHK & Co Brokerage Unit (English article)
GM (NYSE: GM) Confirms Indonesia Factory Plan With China’s SAIC Motor (English article)
BYD (HKEx: 1211) Gets Government Approval For Auto Finance JV (HKEx announcement)
Bottom line: A new conciliatory tone will help to diffuse a spat between Alibaba and a regulator that accused it of being soft on piracy, but the issue will weigh on the company for the rest of this year.
Tensions subside in Alibaba-SAIC spat
After reaching a fever pitch last week, rhetoric in the high-profile spat over piracy between e-commerce giant Alibaba (NYSE: BABA) and one of the nation’s main business regulators appears to be softening as the 2 sides move towards a compromise. The latest headlines say Alibaba and the State Administration For Industry And Commerce (SAIC) have joined hands to fight piracy, marking a sharp toning down of the angry rhetoric that was flying for much of last week. At the same time, Alibaba is now facing the usual flood of shareholder lawsuits, as law firms accuse the company of misleading investors by failing to disclose the magnitude of the piracy problem before its record-setting IPO last year. Read Full Post…
Bottom line: 55Tuan’s increased IPO target and a major new funding round for online financial site Juzi Licai show investor interest remains high in Chinese Internet firms, though it could taper off in the second half of the year.
Juzi Licai wins $100 mln in funding
You know the market is still hot for China Internet companies when when money losers can boost the size of their IPOs, and start-ups can raise $100 million or more. That’s exactly what’s happening, with word that loss-making 55Tuan has boosted its IPO fund-raising target by more than 50 percent, as it seeks to become China’s first listed group buying site. At the same time, other media reports say Juzi Licai, an online financial site, has just raised a nifty $100 million in its second round of funding just 6 months after the launch of its core product. Read Full Post…
Bottom line: Bank of China’s Hong Kong arm is likely to find limited interest in a sale of its Nanyang Commercial Bank unit, as a slowing Chinese economy cools offshore interest in buying Hong Kong banks.
Bank of China looks to sell Nanyang Bank
A new report about a potential major bank sale in Hong Kong made me realize that a widely expected rush to buy locally based lenders in the former British colony never materialized. This latest report that the Hong Kong unit of Bank of China (HKEx: 3988; Shanghai: 601398) is shopping its locally-based Nanyang Commercial Bank might rekindle speculation that a flurry of new sales is coming. But the potential buyers mentioned in the report make such a gold rush look unlikely, indicating local Hong Kong banks may be losing their appeal as acquisition targets for Chinese and other global lenders. Read Full Post…
Bottom line: Foreign technology suppliers will complain about new requirements for them to reveal source codes to Beijing for selling to Chinese banks, but will ultimately comply over fears of being shut out of the market.
Beijing to force new security rules on foreign tech
China’s sudden obsession with national security risks posed by foreign technology has taken yet another step forward, with word that Beijing is preparing to place yet more restrictions on foreign firms that supply networking products and services to Chinese banks. As a longtime industry watcher, I need to quickly add my own view that this particular move isn’t really discriminatory against firms like IBM (NYSE: IBM), Cisco (Nasdaq: CSCO) and Hewlett-Packard (NYSE: HPQ), which are likely to feel the biggest effects. Read Full Post…
Bottom line: Alibaba’s sharp slowdown in quarterly revenue growth is unlikely to be a fluke, and will put downward pressure on the company’s stock as its post-IPO honeymoon comes to an abrupt end.
Alibaba revenue growth slows sharply
When the history books are written, this week will almost surely go down as the one that e-commerce leader Alibaba (NYSE: BABA) would like to completely erase from the record. The company has spent most of the week struggling with a nightmare in the publicity and government relations department due to a piracy scandal, and now it’s just released new quarterly results that showed sharply slowing growth at the end of last year. The perfect storm of bad news wiped nearly 9 percent off Alibaba’s stock in the latest trading session, and for the week it’s down about 13 percent. Read Full Post…
A few food-related items, 2 in the news and one in my personal life, made me realize once more just how far China’s eating scene has advanced in the last 2 decades, especially in an increasingly international city like Shanghai. The 2 news items both involved coffee, which I wrote about a few weeks ago as I noted the recent explosion in new chains and coffee houses.
The latest twist has fast-food giant KFC joining the trend, with word that it’s rolling out a premium coffee product in a bid to boost its downscale image. If that wasn’t enough, Gubuli, a well-known local chain whose name is synonymous with baozi, or meat-filled steamed buns, is also entering the upscale coffee business through a new joint venture with Australian chain Gloria Jean’s. Read Full Post…
Bottom line: The piracy scandal rocking Alibaba will blow over in a few weeks with minimal longer-term impact, though the company’s stock will enter a downturn over the next 6 months due to overvaluation.
Piracy scandal grows around Alibaba
This week could well go down as a turning point for high-flying e-commerce giant Alibaba (NYSE: BABA), whose growing war of words with a top government agency is quickly becoming a major scandal. The increasingly heated exchange has almost completely overshadowed the latest media reports that say Alibaba’s financial arm is preparing to launch a bank later this year. A separate company announcement indicates the bank will use an innovative credit rating system that draws on Alibaba’s huge volume of big data generated from the billions of transactions and other information exchanges that cross over its network. Read Full Post…
Bottom line: Strong pricing for a large new bond from Car Inc reflects good potential for companies in China’s secondary car market, which should see strong growth as new car sales slow.
Car Inc raises $500 mln in bond offer
Let’s take a brief break from Internet companies to look at recently listed auto rental specialist Car Inc (HKEx: 699), which has excited the market with a new $500 million bond offering. Despite its earlier setbacks, including an aborted previous IPO, Car Inc has done quite well since its listing last September, as Chinese car-related plays find a strong audience among international investors. Interest seems especially strong toward car companies that target the second-hand market, as new car sales look set to slow sharply due to China’s slowing economy and restrictions being imposed by many cities to control pollution. Read Full Post…
Bottom line: Tencent’s strong early showing for a new WeChat-based advertising service and its investment in a take-out dining service reflect building momentum in its drive to build WeChat into a major new profit center.
BMW, Coke launch ad campaigns on WeChat
A couple of media reports are shining a spotlight on Tencent’s (HKEx: 700) WeChat, and some of the new steps it is taking to monetize the hugely popular service that is rapidly expanding beyond its roots as a mobile messaging service. At the same time, another report from Tencent itself is providing some insight into who exactly uses WeChat. It should come as no surprise that the report shows WeChat’s biggest fans are young and mostly male users, which are some of the most attractive targets for the online merchants and advertisers that Tencent wants to do more business on the platform. Read Full Post…
