After more than a half year of silence, Lenovo’s (HKEx: 992) dream to buy the low-end server business of IBM (NYSE: IBM) is suddenly back in the headlines, in a development that I predicted quite a while ago based on the fact that both sides really want to do this deal. The first time around saw the talks founder and ultimately stall due to disagreement on price. But such a deal makes so much sense for both sides that it’s almost inevitable that it will happen, which leads me to believe that we could see announcement of a preliminary agreement sometime in the first or second quarter. Meantime, Lenovo is also seeing a positive development on the Japan front, where its 3-year-old PC joint venture with local partner NEC (Tokyo: 6701) is doing better than expected. Read Full Post…
Embattled smartphone and telecoms equipment maker ZTE (HKEx: 763; Shenzhen: 000063) is all over the headlines today, led by word that the company has strongly bounced back into the black after a major restructuring to cut costs and realign its businesses. ZTE also announced aggressive sales targets this year for its fast-growing smartphone business, which it hopes will offset much slower growth for its older networking equipment unit. But the upbeat news was partly offset by word that the US is launching a new probe into ZTE and several other smartphone makers, after a US company filed a patent infringement complaint. Read Full Post…
Shanghai’s signature Oriental Pearl Tower takes center stage in this week’s Street View, following a much-needed cleaning for the original high-rise in city’s fast-evolving Lujiazui financial district. This concrete and purple glass tower has been the source of controversy since its construction in the early 1990s, winning praise from some for its futuristic look and scorn from others who called it an urban eyesore. Read Full Post…
It’s not too often that I agree with articles published in the People’s Daily, but for once I have to say that a new attack by the newspaper on personal health products maker Nu Skin (NYSE: NUS) looks at least partly deserved. That said, I did find the language used to attack Nu Skin somewhat comical and exaggerated, even if it the basic ideas are probably true. I was also somewhat surprised at how big a market China has become for Nu Skin, reflecting how easily such companies can win over Chinese consumers and businesspeople who often assume that any product with a western name must be good and trustworthy. Read Full Post…
The growing field of big Chinese global investors has gained a new member, with word that a unit of Citic Group, one of the nation’s oldest conglomerates, is taking a stake in a major new fund being set up in New York. Word of that deal comes as Citic Capital wraps up another major deal, as it finally closes its long and difficult plan to buy out New York-listed telecoms software maker AsiaInfo-Linkage (Nasdaq: ASIA). Both deals underscore not only Citic’s own aspirations as a global investor, but also the broader rise of Chinese private equity firms on the world stage as they aim to compete with big western names like KKR and Carlyle. Read Full Post…
New data is highlighting an online trend that I wrote about last year, namely that microblogs have peaked in popularity and are starting to decline, in a bad sign for leading web portal Sina (Nasdaq: SINA) as it rushes monetize and list its popular Weibo service. Frankly speaking, I’m not too optimistic anymore about the prospects for Sina Weibo, which is really just a copy of US social media pioneer Twitter (NYSE: TWTR) and hasn’t shown much ability to innovate in the rapidly changing social networking (SNS) space. All that said, I imagine this latest report from the China Internet Network Information Center (CNNIC) is prompting new urgency for Sina to separately list its Weibo unit, and that such an IPO could come later this year. Read Full Post…
I have to admit I was a bit surprised to read a report that Jin Jiang (HKEx: 2006； Shanghai: 600754) has become the first of China’s hotel operators to expand on the global stage, with word that the Shanghai-based chain has signed a deal to enter Indonesia. I really expected one of the US-listed Chinese hotel companies like Home Inns (Nasdaq: HMIN) or China Lodging Group (Nasdaq: HTHT) to make that move first, since those companies are more entrepreneurial than the stodgier state-run Jin Jiang. But that said, this small move by Jin Jiang looks like a prudent way to test out international markets as it looks for global growth opportunities. Read Full Post…
Just days after making headlines for being selected to buy Portugal’s top insurer, Chinese investment firm Fosun International (HKEx: 656) is back in the news as a finalist in the bidding for Forbes Media, publisher of Forbes magazine. The deal is just the latest in a recent series of major purchases for Fosun, and more broadly kicks off a year that could see record overseas M&A by a rising group of Chinese investment firms. Fosun’s evolving strategy seems to target companies that are profitable but also laggards in their areas, which is relatively common among such investors. But in this case, I have serious doubts about its pursuit of Forbes due to the global rapid decline of the traditional media industry. Read Full Post…
Anyone who was hoping to get a big discount on an iPhone from China Mobile (HKEx: 941; NYSE: CHL) will be majorly disappointed to learn the popular smartphones will be quite pricey under the new partnership between China’s leading wireless telco Apple (Nasdaq: AAPL). The pair have just announced pricing for the iPhones under a deal reached between China Mobile and Apple in December, with the 5s starting at 5,488 yuan ($914) for the cheapest model with 16 GB of memory. (English article; Chinese article) By comparison, a comparable US model, which has been on the market since September in most of the world, costs around $650. Read Full Post…
The microblogging space was buzzing with a bit of the past, the present and the future last week, with executives from some of China’s top gadget and Internet companies all hyping their various agendas in cyberspace. In a blast from the past, Apple (Nasdaq: AAPL) co-founder Steve Wozniak was all over the place in microblog postings from a number of tech companies executives he visited on a trip to China.
In the present, meanwhile, TCL (HKEx: 1070; Shenzhen: 000100) Chairman Li Dongsheng was at the CES trade show in Las Vegas and also attended a board meeting of Imax (NYSE: IMAX), using both opportunities to hype a new home theater tie-up with the US-based large screen movie format specialist. In the future, Long Wei, the low-key founder of leading online restaurant critic site Dianping, was hyping his company’s recent global expansion, perhaps hinting at more to come. Read Full Post…
Traditional Chinese appliance makers are showing a sudden interest in moving outside their usual comfort zone, with word that sector giant Midea (Shenzhen: 000333) is applying for a banking license. Midea joins a fast-growing queue that has seen rivals Haier (HKEx: 1169) and Gree (Shenzhen: 000651) make similar moves outside their traditional areas, in what looks to me like a typical herd mentality that one often sees in Chinese industries.
In this case the urgency to diversify doesn’t seem that critical, since I don’t expect consumer demand for big appliances like air conditioners and refrigerators to fade anytime soon. That contrasts sharply with a parallel diversification drive in the traditional retailing sector, where companies like electronics seller Gome (HKEx: 493) and supermarket operator Wumart (HKEx: 1025) are facing an unprecedented challenge from a new generation of e-commerce firms like Jingdong and Yihaodian. Read Full Post…
