Many of China’s biggest tech leaders were chattering in cyberspace last week from Beijing, where they were gathered for this year’s National People’s Congress and the related Chinese People’s Political Consultative Conference (CPPCC), collectively known as the lianghui. Lei Jun, CEO of handset sensation Xioami, was uncharacteristically low-key in talking about his meeting with Chinese President Xi Jinping, as was Li Dongsheng, the soft-spoken CEO of leading TV maker TCL (HKEx: 1070; Shenzhen: 000100). But the marketing savvy Xiaomi was still up to its usual publicity tricks, helping to spread a series of photos showing Robin Li, founder of search leader Baidu (Nasdaq: BIDU), using a Xiaomi handset in one of the sessions. Read Full Post…
The following press releases and media reports about Chinese companies were carried on March 13. To view a full article or story, click on the link next to the headline.
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Half Of IBM (NYSE: IBM) Workers Quit At Shenzhen Plant, 20 Fired (Chinese article)
Tencent (HKEx: 700) In Talks to Purchase Handset Manufacturer – Sources (English article)
Vipshop (NYSE: VIPS) Prices $550 Mln Convertible Notes, 1.14 Mln ADSs (PRNewswire)
Coke (NYSE: KU) Worries Over Draft Law On Bottled Water Labeling (Chinese article)
Home Inns (Nasdaq: HMIN) Reports Q4, Full Year 2013 Results (PRNewswire)
The Internet world is buzzing today with word that Alibaba and Tencent (HKEx: 700), China’s 2 dominant Internet firms, are among the first group of 10 companies to receive banking licenses as Beijing opens the sector to private competition. From a macro-economic perspective, the move is certainly a welcome one for China and should provide some much-needed competition for the nation’s stodgy state-run lenders that now control the sector.
But from an individual company perspective, I really can’t see how traditional banking fits into either Tencent’s or Alibaba’s core Internet business, and worry a bit that this new initiative could ultimately distract these companies from their main focuses. I do expect that Tencent may ultimately follow its recent strategy of spinning off businesses and move its bank into a separate company, which looks like the right move. Alibaba would be well advised to do the same, though founder Jack Ma has shown a tendency for wanting to keep all his companies under one roof. Read Full Post…
Chinese investors marked an important milestone last week when they rejected a bond offer by Jin Jiang (HKEx: 2006; Shanghai: 600754), one of the nation’s leading hotel operators, reflecting their growing understanding of risk in China’s young financial markets. Chinese investors too often blindly pile into nearly any product offered by the latest hot company, bank, fund manager or even Internet firm, falsely believing they are guaranteed big returns on their money. Read Full Post…
I don’t usually like to toot my own horn, but my prediction last month that we could soon see a major fund-raising exercise by high-flying e-commerce firm Vipshop (NYSE: VIPS) has come to pass, with word that the firm is preparing to sell stock and bonds worth more than $600 million. Investors weren’t extremely excited about the plan, with Vipshares falling slightly after the announcement came out. But considering that the company’s shares have risen about 8-fold over the last year alone, the reception wasn’t all that bad either. From the strategic perspective, this new massive fund raising hints that Vipshop wants to take advantage of the recent wave of M&A sweeping China’s e-commerce space, and I expect we could see some big deal announcements later this year. Read Full Post…
After an unsuccessful earlier listing for one of its units, online real estate giant E-House (NYSE: EJ) is preparing to try again with plans for a New York IPO for its Leju division. The company has been quite cagey in this latest listing plan, giving little details about Leju’s background and why the unit deserves its own separate listing. Perhaps that’s because a little checking reveals that this “new” offering is really just a recycled listing for a previous company jointly-owned by E-House and leading web portal Sina (Nasdaq: SINA). Read Full Post…
A new survey on marriage patterns in Shanghai is casting an interesting spotlight on what it means to be an outsider in one of China’s most international cities, whose high-profile embrace of foreigners and foreign things often overshadows a much bigger influx of domestic immigrants. The survey also draws attention to the bigger Chinese fondness for characterizing everything as either “insider” or “outsider”, a centuries-old tradition that Shanghai could and should take the lead in discarding.
The “insider” and “outsider” mentality goes way back in Chinese history, and is physically present across the Chinese landscape and deeply embedded in the language. Its most potent physical symbol is the storied Great Wall, which drew a clear line between the inside, or civilized China to the south, and the outside, populated by barbarian tribes to the north. Read Full Post…
The new week is just beginning, but it could well go down as a pivotal moment in Chinese Internet history with Tencent’s (HKEx: 700) new announcement of an e-commerce alliance with JD.com that could threaten the dominance of sector leader Alibaba. The tie-up, which was first rumored last month, will see Tencent pay $215 million for 15 percent of JD.com, which will also receive some of Tencent’s e-commerce assets including a minority stake of its flagship Yixun.com B2C service. (company announcement) The companies will merge their e-commerce businesses, creating a new player with nearly a quarter of China’s B2C e-commerce market. Read Full Post…
After a massive rally over the last year, shares of solar panel makers could be set for a few months of winter following a disappointing earnings announcement from superstar Canadian Solar (Nasdaq: CSIQ) and a debt default from second-tier player Chaori Solar (Shenzhen: 002506). Such a correction was almost inevitable after last year’s huge rally and shouldn’t be cause for concern among long-term buyers of shares in top players like Canadian Solar. But shareholders of second-tier firms like Chaori might think strongly about selling their stock, as these smaller companies could easily end up getting wiped out or sold for bargain prices in the sector’s ongoing consolidation as it emerges from a 2-year downturn.
The list of major Chinese entertainment firms jumping on the Hollywood bandwagon has just gained an important new member with word that Huayi Bros (Shenzhen: 300027) is on the cusp of investing in a major new production house. I’ve been following the China media scene for more than a decade now, and can say that Huayi was one of the nation’s earliest major players to emerge in a space that was extremely difficult for years due to tough restrictions and extreme fragmentation. But Huayi has shown not only an ability to survive, but also to thrive in a market where the movie theater business is suddenly booming and online video has quickly become an important new revenue source. Read Full Post…
I had a sense of deja vu on reading reports that a group of workers at an IBM (NYSE: IBM) plant in south China had gone on strike, unhappy about the terms of their transfer to domestic PC giant Lenovo (HKEx: 992) under a recent M&A deal. It seems the workers in the city of Shenzhen were offered similar pay and other terms under the transfer, which came as the result of Lenovo’s pending purchase of IBM’s low-end server business announced in January. But the workers were still unsatisfied, feeling they should get higher pay for agreeing to work at a domestic company rather than the more prestigious IBM. Read Full Post…
