In a big victory for free trade, the US has approved the sale of Canadian oil exploration giant Nexen (Toronto: NXY) to China’s CNOOC (HKEx: 883; NYSE: CEO), removing the last major obstacle that could have stopped the landmark deal. The US approval was decidedly low-key, with Nexen formally announcing it had received the final major green light it needed to close the sale. (English article) The development marks the second major approval of a potentially sensitive deal by the US in the last month, and is the latest indicator that such deals that pose no real risk to national security and are likely to move forward for now without political resistance.
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Real Estate Services: Time to Buy? 房地产服务：买入时机？
After showing early signs of a pickup last fall, online real estate services firm Soufun (NYSE: SFUN) is sending even stronger signals that springtime may indeed be coming for companies that make their money from buying and selling activity in the property market. Here it’s important to point out that this coming spring for market leaders Soufun and E-House doesn’t mean that China’s real estate prices are going to start rising sharply again anytime soon. Instead, what it means is that real estate buyers and sellers are starting to feel confident that the market has stabilized after more than a year of uncertainty due to government cooling policies.
US Sanctions Spotlight China Expansion Risk 美国制裁突显中国扩张风险
New US sanctions against a handful of Chinese companies accused of illegally selling goods to Iran, North Korea or Syria are once again casting a spotlight on the risk investors and businesses face when dealing with Chinese companies, especially sellers of high-tech equipment and services. In this particular case most of the sanctioned companies appear to have ties to China’s military and are all privately held. But other high-profile cases in the past year have pointed to similar potentially illegal behavior by telecoms equipment giants Huawei and ZTE (HKEx: 763; Shenzhen: 000063), which are suspected of selling or trying to sell goods to Iran, possibly in violation of US or UN sanctions.
Baidu Tries E-Commerce Search 百度购物上线 再入电商门槛
After several misguided e-commerce initiatives that ended in failure, Internet giant Baidu (Nasdaq: BIDU) is finally making what looks like a smart move in the highly competitive space by focusing on what it does best: providing search services. In this case, media are reporting that China’s dominant provider online search company has quietly launched an e-commerce search engine, in what looks like a direct challenge to e-commerce leader Alibaba’s own eTao e-commerce search site.
Shanghai Street View: Packaging Crackdown 沪经动向：包装瘦身
I’ve lived in a number of Asian cities before taking up my current residence in Shanghai, including 3 years in Taiwan from 2006 to 2009. While I enjoyed may things about Taipei, one of the things that I found less appealing was the tendency for shops and companies there to overpackage many products, especially items intended as gifts. The phenomenon would often cause objects such as bottles of perfume or liquor to suddenly morph into packages that were 3 or 4 times the size of the actual product. I’ll discuss shortly my theories on where this phenomenon came from and the psychology behind it, but first I want to congratulate Shanghai for taking the lead in trying to curb this extremely wasteful practice that has spread from Taiwan to China in the last decade.
Sougou + So.com: Don’t Bet On It 搜狗和360搜索联合：不要指望
Interesting new rumors are appearing in the media about a possible alliance between 2 of China’s most up-and-coming search engines, Sohu’s (Nasdaq: SOHU) Sogou and Qihoo 360′s (NYSE: QIHU) So.com. While such an alliance looks very smart and could mount a serious challenge to longtime industry leader Baidu (Nasdaq: BIDU), I would be seriously skeptical that anything will ever happen. The main obstacle is simple, and is the same obstacle that prevents mergers and other strategic tie-ups from happening more broadly in China’s Internet world: big egos. In this case, we’re talking about 2 of the Chinese Internet world’s biggest egos who are notoriously difficult collaborators, namely Sohu’s chairman chief executive Charles Zhang and Qihoo’s founder and chief executive Zhou Hongyi.
Dynasty Warning: Wine Bubble Bursting 王朝酒业发布盈利预警 葡萄酒行业泡沫破裂
There must be something festive in the air as Chinese New Year approaches, since I’m writing about the alcoholic beverages industry for the second time this week with word that leading domestic wine maker Dynasty Fine Wines Group (HKEx: 828) has issued a profit warning. But whereas my previous post talked about the big potential in the baijiu industry for high-alcohol spirits (previous post), my latest post is decidedly more downbeat and points to a big bubble starting to burst in the fast growing but increasingly crowded market for western-style grape-based wines.
SMIC, NetEase Look Sharp in Q4 中芯国际和网易业绩是个好兆头
Following earnings reports earlier this week that showed advertising business stabilizing at Baidu (Nasdaq: BIDU) and Sohu (Nasdaq: SOHU), we’re getting even more upbeat results from online game operator NetEase (Nasdaq: NTES) and leading Chinese chip maker SMIC (HKEx: 981; NYSE: SMI), which points to a broader Chinese economic recovery. I’ll be honest and say I’m most encouraged by the news from SMIC, which for years has had huge potential but always failed to realize that potential due to management and other internal issues. The year 2011 saw the company suffer through a bruising power struggle, after which the 2 men at the center of the struggle were both thrown out of the company and a new experienced CEO was brought in to try and finally put the company on more solid footing.
SABMiller Thirsts For China Market； SABMiller看好中国市场
Western alcoholic beverage giant SABMiller (London: SAB) is making headlines for its newly announced deal to buy a major Chinese beer maker, raising the interesting possibility that other foreign firms could soon make bids for makers of traditional baijiu liquor. For those who don’t follow the China liquor market too closely, baijiu makers have been under pressure since the beginning of the year, when media first began reporting that their products contained unsafe levels of plasticizers. The ongoing crisis could provide some interesting buying opportunities for foreign alcoholic beverage makers like SABMiller and Diageo (London: DGE), which are eying a bigger share of China’s massive market for alcoholic beverages.
International Board: The Endless Wait 国际板：无休止的等待
Since China first announced its plans to launch an International Board several years ago, a group of overseas-based companies that do big business in China have been waiting patiently to list on the board to raise both cash and their profiles on the mainland. Many of those companies were genuine foreign firms, such as banking giants HSBC (HKEx: 5; London: HSBA) and Standard Chartered (HKEx: 2888; London: STAN); but an equally large group were Chinese companies like mobile carrier China Mobile (HKEx: 941; NYSE: CHL) and PC maker Lenovo (HKEx: 992), which incorporated overseas so they could list their shares in Hong Kong. Now it appears that at least some of the Chinese companies that wanted to list on the International Board are losing their patience with the slow progress, with word that Lenovo’s parent and telecoms carrier China Telecom (HKEx: 728; NYSE: CHA) may both be exploring more traditional A-share listings for some of their units.
AsiaInfo: Buyout Dead? 亚信科技：收购告吹？
Despite reporting solid profit growth, telecoms software maker AsiaInfo’s (Nasdaq: ASIA) latest quarterly earnings report was more significant for what it did NOT contain, namely any mention of an ongoing plan to sell the company. Does this mean the deal is dead? In my view, the lack of any news on what once looked like a lively bidding war could indeed mean that buyers are no longer interested in AsiaInfo, perhaps because the company’s financials weren’t as attractive as many thought they might be or because the company wanted too big a premium for its shares.
