The following press releases and media reports about Chinese companies were carried on January 24-26. To view a full article or story, click on the link next to the headline.
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Apple (Nasdaq: AAPL) Agrees To Chinese Security Audits Of Its Products – Report (English article)
Infant Care Website Bebei.com Raises $100 Mln In New Funding (Chinese article)
Spain’s BBVA To Sell Citic Bank Stake To Chinese Real Estate Firm (English article)
ZTE In Wireless EV Charging Venture With National Grid Operator (Chinese article)
Hisense Sees TV Valued Added Services Market At 29 Bln Yuan In 3 Years (Chinese article)
Bottom line: High-spending advertisers could provide a major new revenue source for Tencent, as it rolls out new ad-based services on its popular WeChat Moments function.
WeChat rolls out new ad services
Internet stalwart Tencent (HKEx: 700) is revving up its drive to monetize its popular WeChat mobile messaging platform, with word that it’s rolled out advertising services for one of the platform’s most popular functions. The move will start inserting ads into WeChat’s popular Moments function, known as pengyuouquan in Chinese, in a gamble that risks alienating many of the hundreds of millions of platform’s users. Read Full Post…
Bottom line: Wanda Cinema and Spring Airlines represent a new generation of major private companies to list in China, and should enjoy strong share gains over the short to medium terms following their IPOs.
Spring Air leaps on first 2 trading days
There was plenty of spring in the stocks of 2 hot companies that listed in China this week, with budget carrier Spring Airlines (Shanghai: 601021) and theater operator Wanda Cinema Line (Shenzhen: 002739) jumping 44 percent in their trading debuts. The pair are part of a new generation of privately owned companies starting to list on China’s main stock markets, stealing the spotlight from an older group of state-run firms that still dominate the country’s 2 main stock exchanges in Shanghai and Shenzhen.
Obviously profits and broader performance will be the biggest determiner of whether these companies’ stocks continue to rise after the euphoria of their IPOs starts to fade. But from the perspective of a western buyer like myself, Wanda Cinema and Spring Air are 2 of the first Chinese-listed firms that I’ve seen whose stocks I would personally consider buying. Read Full Post…
The annual Spring Festival travel rush has been hogging the headlines these last few weeks, but several news reports this week are casting a more human spotlight on the millions of people who have already started leaving Shanghai for annual reunions back home. Those reports focus on the annual headaches local employers feel when millions of their workers leave for weeks or even months, driving up salaries by 50 percent or more for the people who stay on the job.
The issue adds a more human face to the millions of people who now call Shanghai home, even though they have little or no official status as city residents. Many of us depend heavily on such people, from the waitresses at our favorite restaurants, to the ayis who clean apartments and trainers who staff the gyms where we work out. Read Full Post…
Bottom line: Gubuli’s foray into the coffee business is doomed to failure, while Carrefour is likely to sell part of its China business to a local partner later this year.
Gobuli tries coffee with Gloria Jean’s
You know the China coffee market is overheated when one of the nation’s most famous names in a traditional food like steamed buns enters the market. That’s what’s happening now, with word that Gobuli Group, a restaurant chain whose name is synonymous with a popular kind of meat-filled steamed buns, is launching a coffee chain joint venture in partnership with Australia’s Retail Food Group.
While the coffee business is quickly overheating, the opposite is true for the traditional supermarket business, which has seen several major western retailers leave the market or scale back operations as they face a growing challenge from e-commerce. Now it looks like French giant Carrefour (Paris: CA) could become the next in that trend, with word that it might consider selling some or all of its China business to a local partner. Read Full Post…
Bottom line: SNS operator Tumblr could quickly find its site blocked in China if it rolls out a Chinese-language edition targeting mainland users without taking formal steps to enter the country.
Tumblr eyes China
News that US social networking site (SNS) Tumblr is eying the China market looks intriguing, as it would come not long after professional networking site LinkedIn (NYSE: LNKD) entered the market and as industry titan Facebook (Nasdaq: FB) lobbies hard for its own Chinese presence. But what most caught my attention about this latest development was the somewhat humorous headline in one report noting that Tumblr is “still not blocked in China”.
Of course the implication is that once Tumblr formally launches a Chinese language edition of its popular blogging and SNS service, it could very easily find its site blocked by China’s Internet police. Read Full Post…
Bottom line: Sougou could gain some momentum in the search market this year following some innovative new tie-ups with WeChat, while Xunlei’s stock will remain under pressure as it gets dogged by more piracy issues.
Sogou launches news feature on WeChat
More than a year after emerging as China’s third-largest search engine with the merger of 2 second-tier players, Sogou is finally making an interesting move by launching a news app that takes advantages of its ties to Internet titan Tencent (HKEx: 700). The move looks particularly promising, since the rapid rise of another similar app called Today’s Headlines shows that this is clearly an area with strong demand. The move could pose a serious challenge to the high-flying Today’s Headlines, which earlier this week was named as one of China’s top 10 mobile apps for 2014. (previous post) Read Full Post…
Internet executives were busy quashing a number of rumors on their microblogs this week, with smartphone sensation Xiaomi trying to stamp out reports of bitter relations with SNS giant Facebook (Nasdaq: FB), and e-commerce giant Alibaba (NYSE: BABA) quashing talk of a major new investment in South Korea. But some of the more interesting chatter focused on the concept of company valuations, and just how widely such valuations can vary for China’s dynamic tech firms.
At the same time, a coming flurry of year-end parties began to kick off in the run-up to the Chinese New Year holiday that’s just a month away. The microblogging realm saw e-commerce giant JD.com (Nasdaq: JD) singing its own praises at the company’s annual party, taking a shot at fast-fading rival Dangdang (NYSE: DANG) in the process. At around the same time, a stumbling Sina Weibo (Nasdaq: WB) also held an annual awards ceremony for notable microbloggers, in its own attempt to remain relevant in the social networking realm. Read Full Post…
Bottom line: This year is likely to see 6-9 New York IPOs by Chinese tech firms, mostly in the $50-$100 million range, while Legend’s planned IPO in Hong Kong or China is likely to get a mixed reception.
Lenovo parent Legend eyes H2 IPO
A new forecast on Chinese high-tech IPOs for the year ahead is stating the obvious, namely that new listings are set to slow dramatically in 2015 after a bumper harvest in 2014. In fact, the record year for fund-raising in 2014 is a bit misleading, as it really represents about 3 years worth of offerings that accumulated during a frosty period that led to a near freeze for IPOs starting in 2011. Now that much of the backlog has been cleared, it’s not surprising that there are few major new companies that are still at the right stage of development for listings.
At the same time, another report says that Legend Holdings, parent of PC giant Lenovo (HKEx: 992), has decided to list in Hong Kong, forgoing previous plans to make an IPO in its home China market. That decision isn’t a huge surprise if it’s true, and could provide a highlight for international tech investors in this year’s muted IPO parade for high-tech firms. Read Full Post…
Bottom line: ZTE’s latest preliminary results show the company may have turned a corner in the second half of last year and could be set for a business rebound if it can maintain focus on key new product and service areas.
ZTE turns corner after restructuring
A new profit report from ZTE (HKEx: 763; Shenzhen: 000063) is painting a cautiously upbeat picture about the telecoms giant as it emerges from a difficult period and tries to reposition itself as a specialist in networked systems and devices that talk to each other. The company’s report that its profit for 2014 nearly doubled from a year earlier certainly looks encouraging, though it probably includes many one-time items that make the figures less meaningful. A comparison with its last financial report from the third quarter is more meaningful and also looks mostly encouraging, showing operating profit and revenue growth were picking up even as net profitability appeared to be slowing. Read Full Post…
Bottom line: KFC’s plan to roll-out a low-cost premium coffee product looks like part of its broader plan to move its restaurants upscale, and could help it regain some momentum it has lost in China over the last 3 years.
KFC eyes low-cost premium coffee
It’s been nearly a year since struggling fast food giant KFC (NYSE: YUM) announced a much-needed overhaul for its China restaurants, and now we’re finally getting some details of changes to come with word of an interesting new plan to go upscale that takes aim at McDonald’s (NYSE: MCD). The new plan centers on coffee, with KFC aiming to find a new place at the low end of the premium market.
The move looks smart, since coffee has emerged as a hot and trendy product over the last couple of years in China. It also spotlights the fact that the fast-food market may be close to saturation in China’s largest cities. That means that KFC, McDonald’s and other large operators may be entering a new phase of their development where China looks more like the mature western markets where they are based, and they need to be more innovative to keep growing. Read Full Post…
