Cellphone chipmaker Spreadtrum (Nasdaq: SPRD) and solar panel maker LDK (NYSE: LDK) are both using good news as a smokescreen to draw attention away from bigger bad news, with the former announcing a new dividend and the latter a minor victory in a business dispute. In both cases, each company is grappling with much bigger problems that have caused their share prices to sag as investors lose interest in their tarnished growth stories. In LDK’s case the situation is much worse, with the company essentially being supported by the government as it teeters on the brink of insolvency.
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Google Quits E-Commerce, Jingdong 谷歌关闭中国购物搜索 京东投资云计算
Several e-commerce items are in the headlines today, including Google’s (Nasdaq: GOOG) latest retreat in China as it shutters its Chinese online shopping search service. At the same time, domestic players Jingdong Mall and Suning are continuing their aggressive expansion, with the former pouring big new money into cloud-based services as the latter launches a major initiative based in its new chain of brick-and-mortar superstores. The common theme to all of these news bits is that e-commerce remains an incredibly competitive business in China, and is likely to remain that way for at least the next year or 2 until cash-rich companies fighting for supremacy in the space finally tire of losing massive amounts of money.
Advice to US: Approve A123 Sale 美国政府应为万向集团收购A123放行
In writing this blog, I generally try to keep my own views muted and focus instead on the latest news and what it means for the companies involved. But I’m making one of my occasional exceptions to that rule today to say that the US really should go ahead and approve the sale of bankrupt battery maker A123 Systems to a Chinese company, since this deal seems to have few if any national security implications and blocking it would send a bad signal about Washington’s commitment to fair trade.
Solar Rallies on New Beijing Subsidies 中国政府新补贴使太阳能股反弹
China’s solar panel industry is starting to look more and more like a beggar kneeling on the doorstep of Beijing, with the latest word that the central government is preparing to hand out an additional $1.1 billion in subsidies to the struggling sector. That news comes just after a government official was quoted saying Beijing is considering a plan to double its already ambitious target for a massive building spree of new solar electricity plants, again in a bid to support the struggling sector.
Shanghai Street View: Architectural Angst 沪经动向：建筑的烦恼
Shanghai and the surrounding Yangtze river delta are becoming home to some of the world’s tallest and most distinctive new skyscrapers as China races to construct new office towers to house the many companies powering its economic boom. But the region is also quickly gaining notoriety for a new generation of glittering towers that often become the subject of local ridicule for their sometimes strange and daring designs. I personally find many of these new designs interesting and even appealing, adding individuality to emerging urban skylines that might otherwise look homogenous and lacking in individuality. But many locals feel differently.
ZTE, Huawei Scale Back Invesments 中兴、华为收缩战线
A couple of months after suffering a major setback in the US, hobbled telecoms equipment giants Huawei and ZTE (HKEx: 763; Shenzhen: 000063) are trying hard to convince the world that they are still committed to expansion in the west with 2 new investment announcements. But neither announcement looks very exciting in terms of size, and both look like feeble efforts to try to prove that neither company is ready to admit a slowdown in its global expansion. Both cases involve investment in new product development, with ZTE announcing a plan to invest in the US and Huawei focusing on Europe.
Lenovo and Microsoft: A New Love Affair? 微软可能结盟联想？
Just a day after I ridiculed a new mobile phone alliance between Microsoft (Nasdaq: MSFT) and China Unicom (HKEx: 762) (previous post), we’re seeing signs of another new China tie-up between the world’s largest software maker and PC giant Lenovo (HKEx: 992) that looks much more intriguing. Whereas the Unicom alliance looked set to fail for a number of reasons, this new potential love affair between Microsoft and Lenovo could stand a better chance of success because it contains strong incentives for both sides. What’s more, each company is the global leader in its main product area, but both are still minor players in the mobile computing category that is likely to become the wave of the future for computer makers.
News Digest: December 12 报摘： 2012年12月12日
The following press releases and media reports about Chinese companies were carried on December 12. To view a full article or story, click on the link next to the headline.
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- SEC Charges Consultant With Fraud In Chinese Reverse Mergers (English article)
- Sina (Nasdaq: SINA), AutoNavi (Nasdaq: AMAP) Launch Location-based SNS Platform (PRNewswire)
- Regulator OKs Agricultural Bank (HKEx: 1288) Issue of Up To 50 Bln Yuan in Notes (HKEx announcement)
- Microsoft (Nasdaq: MSFT) CEO Meets with Lenovo (HKEx: 992) CEO in China (English article)
- ZTE (HKEx: 763) to Invest $30 Mln More In The US Market (Businesswire)
China Mobile on Services Steroids 中国移动重拳出击
After praising China Mobile (HKEx: 941; NYSE: CHL) just last week for finally returning its focus to the present under a new top management team installed earlier this year, I feel compelled to update my previous view by expressing a slight concern at a sudden flurry of new initiatives from the company. In the last 24 hours alone, I’ve read reports of at least 3 new moves by China’s largest mobile carrier all aimed at tapping the growing market for high-speed telecoms services.
Microsoft, Unicom Alliance Set For Failure 微软、中国联通成立产业联盟注定失败
Microsoft (Nasdaq: MSFT) continued its long-standing China strategy of launching poorly conceived campaigns last week with its announcement of a new tie-up with carrier China Unicom (HKEx: 762; NYSE: CHU) to promote its struggling Windows mobile operating system (OS) in the world’s largest mobile market. While the software giant clearly needs to take aggressive steps to challenge Apple and Google in this critical market, this kind of new tie-up looks doomed to failure due to its poor choice of partners and lack of exclusivity.
Focus Media’s Privatization Hits Hiccup 分众传媒私有化遇阻
China’s rapidly weakening advertising market may be undermining Focus Media’s (Nasdaq: FMCN) ongoing privatization bid, with word that one of the companies underwriting the buyout may have backed out of the deal. The news, if true, underscores the fact that this kind of privatization is never easy, and that China’s wobbly economy may make future similar buyouts even more difficult. But at the end of the day, I do suspect this privatization bid will probably succeed since many offshore investors are still quite bullish on China. What’s more, Focus Media, despite a recent restructuring, is in the enviable position of being one of China’s leading outdoor advertising services firms.
