After watching leading online video site Youku Tudou (NYSE: YOKU) search for most of its life for projects with profit potential, I’m happy to finally see a new Internet TV initiative by the company that looks like it could have strong prospects. We’ll need to see some more details about this initiative and whether it actually happens before I can comment too much on its actual potential. But this move into the more mainstream TV market could be just the kind of boost that Youku Tudou needs in its quest to find sustainable profits. Read Full Post…
I don’t usually have many positive things to say about Unicom (HKEx: 762; NYSE: CHU), China’s second largest mobile carrier that has been in a state of management gridlock for most of the last 4 years after its formation through the merger of 2 smaller telcos. But I commended the company earlier this year for its stance on WeChat, the popular mobile messaging service operated by Internet giant Tencent (HKEx: 700), and am praising it once again for its new market-oriented tie-up with WeChat. At the same time, we’re seeing other interesting news on the WeChat front with word that Alibaba has recently stopped offering its e-commerce services over the popular social networking (SNS) platform. Read Full Post…
I’m a big fan of M&A, especially in China’s overcrowded Internet space where consolidation has been desperately needed for the last 6 or 7 years. But even I am getting a bit overwhelmed by the accelerating wave of deals we’re seeing this year, with the latest headlines pointing to new activity by leading e-commerce firm Alibaba and top search engine Baidu (Nasdaq: BIDU). This sudden frantic wave of deals was refreshing at first, but it’s starting to take on irrational overtones as purchases become less logical and activity becomes overheated. That leads me to my next prediction, namely that we could soon see some serious M&A hangover for many of these acquirers, as they try to figure out how to run all of their new assets once the current buying wave subsides. Read Full Post…
China’s auto industry is in desperate need of consolidation, and faded car maker Chery looks set to become one of the first victims despite its launch of a turnaround plan that looks like too little too late. Of course there’s always the possibility that local government stakeholders will come to the rescue of this colorful company, which is a big employer and economic engine in its home province of Anhui. But central leaders in Beijing seem increasingly determined to force consolidation in many of the nation’s overcrowded industries, and cars are one area where such downsizing is long overdue if China ever wants to produce some world-class auto makers. Read Full Post…
China’s big 4 state-owned banks are a relatively orderly group in their home market, largely respecting historical boundaries set by Beijing. But industry leader ICBC (HKEx: 1398) is quickly emerging as the most aggressive player on the global stage, with word that it’s in talks to buy a major London-based commodities and forex trading operation. These latest talks are just part of a recent global acquisition spree by ICBC, but they look particularly interesting as they present one of the most direct challenges yet to big 4 lending rival Bank of China (HKEx: 3988; Shanghai: 601398). Read Full Post…
After a false start earlier this year following their landmark equity tie-up, top web portal Sina (Nasdaq: SINA) and e-commerce leader Alibaba are reportedly preparing for a second bid to combine online shopping with social networking. This second initiative involves the roll-out of a completely new platform that will try to bring Alibaba’s e-commerce services to the more than 500 million registered users of Sina’s popular Weibo microblogging service, often called the Twitter of China. We’ll have to see the actual product before drawing any major conclusions, but I do think this approach looks better than other initial clumsy efforts after the pair announced their tie-up back in April Read Full Post…
Apple’s Cook back in China to put out latest fires
The US may be one of the world’s most competitive markets, but tech giant Apple (Nasdaq: AAPL) is quickly discovering that fast-growing China is far more complex for a wide range of reasons that are often more political than economic. CEO Tim Cook was in Beijing this week to address some of those issues, in what looks like a hastily arranged trip to put out a growing number of fires facing his firm in the world’s largest smartphone market. Read Full Post…
A flood of low-cost smartphones into the China market looks set to accelerate with word that the trendy Xiaomi is preparing to launch a low-end model that will sell for just 1,000 yuan, or about $160. Xiaomi’s new phone, called Hongmi or “Red Rice” has been rumored for a while, and was actually supposed to launch in June but ran into unspecified regulator snags. (previous post) Now media are reporting the Hongmi phones could launch this week, adding a new player to an already overheated market for low-end smartphones. Read Full Post…
Investors are taking a decidedly negative view on the latest news from web portal Sohu (Nasdaq: SOHU) and game operator Shanda Games (Nasdaq: GAME), in a wave of buyer fatigue following recent rallies for these 2 Internet companies. Shares of both companies lost 10 percent or more in the latest trading day in New York, after Sohu released a very solid set of financial results and Shanda announced an acquisition that should help to boost its struggling core game business. In all fairness, both companies’ shares have rallied sharply this year for different reasons, so some might view this sell-off as a classic case of the “buy on the rumor, sell on the news” mentality. As such, the setback may be a one-time correction, and different factors will determine whether the companies resume their rallies in the weeks ahead.
Everyone is looking for ways to keep cool as Shanghai bakes under a nonstop summer heat wave, and retirees are particularly vulnerable to the high temperatures due to their advanced age. But recent reports of thrifty senior citizens clogging up air conditioned public spaces to escape the heat points to a larger social problem, prompting me to look more closely at this phenomenon that can be annoying to ordinary people and even a safety hazard.
This tendency for elders to economize in every possible way certainly isn’t unique to China, as such people live on very limited incomes throughout the world and thus need to watch their spending. But in China the issue seems rather extreme, the result of an ultra conservative mentality among elders who grew up in far less prosperous times. My advice to these elders is: Stop skimping and spend some of your hard-earned money to enjoy a few basic simple pleasures like air conditioning on a hot summer day. Read Full Post…
Digital Domain gets new owner, Wanda expands Imax ties
A couple of news bits are highlighting China’s rapidly blossoming love affair with Hollywood, and also hinting at the turbulence we’re likely to see in the next couple of years as Chinese firms invest too much as they become smitten with show business. One of those deals has US digital effects house Digital Domain being taken over by a new Chinese owner less than a year after it was purchased out of bankruptcy by a Beijing-based film producer. The other has leading theater chain owner Wanda Group significantly boosting its ties with Canada’s Imax (Toronto: IMX), as it invests heavily in Imax’s big-screen technology. Read Full Post…
