Internet search leader Baidu (Nasdaq: BIDU) can’t seem to do anything right these days, even when it posts quarterly earnings results that look relatively respectable to me. I suspect that the same short-term traders who bid up Baidu’s stock to meteoric heights in the years after its 2005 IPO are now trying to make more money by short selling the company. That’s my best explanation for the 8 percent sell-off in Baidu stock in after-hours trade after it posted its latest quarterly earnings report. If the losses carry into the regular Friday session, Baidu could easily see its market capitalization drop below the $30 billion mark as its stock tests new lows not seen for more than 3 years. Read Full Post…
Chinese media are buzzing over the fact that tech giant Apple’s (Nasdaq: AAPL) China sales slowed sharply in the first 3 months of 2013, raising the question of whether its days of strong growth in the market may be finished. Quite a few factors are at play in this case, including some short term issues like difficult comparisons from a year earlier. But other longer terms issues are also at play, most notably negative publicity which has tarnished the company’s “cool” image. Apple will need to address these latter issues in China over the next year, since continued image erosion could easily put the company on a long-term downward track.
When in doubt, regulate. That seems to be the growing attitude in Beijing these days towards China’s tech sector, following the latest media reports that one government agency is getting ready to tackle the problem of mobile spam, while another prepares rules for the newly emerging industry of apps that help people call taxis. I do agree that many problems like mobile spam need to be controlled, and that emerging sectors like taxi apps could always use some guidance to promote orderly development. But China’s growing tendency to try to regulate all things in the tech realm is a bit worrisome, and reflects a broader national love of rules, regulations and bureaucracy. (previous post) Read Full Post…
The latest stomach-churning results from fast food giant Yum (NYSE: YUM) are a good opportunity for an updated look at the impact that bird flu is having on companies that rely on the restaurant and travel industries in China. Somewhat ironically, these latest dismal results from the operator of KFC and Pizza Hut restaurants actually sparked a rally in Yum shares, since many were expecting the figures to be even worse than they were. Read Full Post…
In what looks like a major development in the ongoing feud between China Mobile (HKEx: 941; NYSE: CHL) and Tencent (HKEx: 700) over the latter’s popular WeChat service, China’s telecoms regulator has said it will no longer play the role of mediator in the issue and instead will let the market resolve the matter. I have to commend the Ministry of Information and Industry Technology (MIIT) for its decision, as I’ve previously said a regulator’s job is to maintain order in the industry and not to get involved in commercial disputes. This interesting turn of events could also signal that China Mobile itself may be preparing to back down in this case, following widespread criticism that it’s trying to blame others like Tencent for its own lackluster performance. Read Full Post…
I was a bit surprised by the just-released latest quarterly results from cellular crybaby China Mobile (HKEx: 941; NYSE: CHL), which I expected to contain abundant evidence supporting its grievances in an ongoing battle with Internet giant Tencent (HKEx: 700). China Mobile complains that Tencent’s popular WeChat mobile instant messaging service is hogging up capacity on its network, and is pressuring Tencent to start charging fees for the service so that both companies can share that revenue. At the same time, China Mobile is also complaining that WeChat helps mobile subscribers circumvent traditional SMS services by routing messages over the Internet, robbing China Mobile of an important revenue source. Read Full Post…
A recent spat over the past week between a feisty short seller and real estate services firm SouFun (NYSE: SFUN) is providing some good entertainment for China stock watchers, though investors may be less entertained. The ongoing tussle has seen the self admitted short seller, a company called Glaucus Research, issue 3 reports over the period, with SouFun replying in each instance that it’s done nothing wrong. All of this shows that US-listed Chinese companies remain attractive targets for short sellers some 2 years after a series of attacks that sent many companies’ shares tumbling and kicked off a prolonged winter for the entire sector. Read Full Post…
Shanghai media have been buzzing these past few weeks about the dangers posed by advertising screens in the back seats of most city taxis, after a woman was critically injured when her head slammed into one such screen during a traffic accident. Local readers will instantly recognize the screens I’m talking about, as they’ve become an unpleasant fixture in 60 percent of Shanghai cabs, bombarding backseat passengers with nonstop advertisements from the moment they step in the taxi. Read Full Post…
The coming months will be a pivotal time for Beijing to show its commitment to free trade, as China’s three telcoms operators get set to award billions of dollars in new contracts to build 4G mobile networks. The building spree will mark the first batch of big new contracts since both the US and Europe took moves last year that could severely limit or ban the import of Chinese networking equipment for reasons of national security and unfair competition. Read Full Post…
Billionaire investor Warren Buffett has remained faithful to Chinese car maker BYD (HKEx: 1211; Shenzhen: 002594), refusing to change his 10 percent holdings in the company despite a rapid tumble as its bet on electric vehicles (EVs) fails to take off. But soon the man known as the Oracle of Omaha may have no choice but to reduce his stake, since BYD has just announced a plan to issue more shares to raise desperately needed cash. Of course Buffett may choose to buy some of those new shares to maintain his stake at 10 percent; but I suspect his patience is probably running out with this company, with the result that his stake in BYD will get diluted with this planned share issue. Read Full Post…
It’s been at least a few weeks since the last major M&A rumor involving Lenovo (HKEx: 992), so it seems only appropriate that the acquisitive PC giant is back in the headlines with word of its latest bid for a major global asset. This time the target is the server business of global IT services giant IBM (NYSE: IBM). (English article) Such a move would certainly make sense for IBM, which continues its drive to exit the hardware manufacturing business after the landmark sale of its PC business to Lenovo back in 2005. I’m less certain about the wisdom of the move for Lenovo, although it’s certainly consistent with the company’s pattern of snapping up a steady stream of global hardware assets since the original IBM deal. Read Full Post…
