Fresh on the heels of a victory in its bid to buy Canadian energy exploration firm Nexen (Toronto: NXY), China is preparing to test its luck once again with another sensitive attempt to buy one of the largest US aircraft leasing companies from insurance giant AIG (NYSE: AIG). I previously predicted the Canadian government would ultimately approve the purchase of Nexen from state-run Chinese oil major CNOOC (HKEx: 883; NYSE: CEO), which the government of Prime Minister Stephen Harper finally did just before the weekend after months of foot dragging. But a separate group of state-backed buyers that includes China’s biggest bank ICBC (HKEx: 1398; Shanghai: 601398) should look closely at the fine print in final Nexen verdict, which could presage a bumpy flight path ahead in their surprise $5.5 billion bid for ILFC, the aircraft leasing arm of AIG.
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Suntech Woes Drag On 尚德困境持续
The woes at fast-fading former solar superstar Suntech (NYSE: STP) keep on coming, with the company releasing its latest earnings report that shows its woes are likely to continue until its increasingly inevitable takeover by the state. That takeover, if and when it comes, is likely to be as filled with fireworks as Suntech’s actual decline, with all signs indicating that founder Shi Zhengrong won’t easily yield control of his company to the government-backed funding sources he needs to provide it with desperately needed new capital.
China Wine Plays: Oversaturation? 中国红酒电商：“跟风潮”来袭？
Two news bits from the wine sector are making headlines, shining a spotlight on this hot industry whose fast growth is being fueled by millions of new middle class Chinese who are willing to pay big money for premium products like wine and coffee. But these latest 2 deals also reflect intensifying competition in a sector that could easily become the next bloody battlefield for over-eager Chinese start-ups, resulting in big losses and ultimately an ugly consolidation.
PICC IPO, Ping An Sale Bolster Insurance 中国人保、平安售股提振保险业
If I were a short-term investor, I would say that now looks like a good time to buy Chinese insurance shares following positive developments from newly listed PICC Group (HKEx: 2328) and Ping An (HKEx: 2318; Shanghai: 601318), 2 of China’s leading players. But from a longer-term perspective, this brief and relatively rare uptick is likely to be short-lived for an industry that faces a number of major problems despite the strong growth potential of China’s insurance market.
China Mobile Returns to the Present 中国移动聚焦当下
After months of maintaining a relatively low profile, China Mobile’s (HKEx: 941; NYSE: CHL) recently named new President Li Yue is finally making a splash in the headlines with some interesting strategic announcements that look like one of his first breaks with former longtime Chairman Wang Jianzhou. The 2 biggest new moves will see China Mobile develop its own brand of cellphones, and also establish an Internet company. I personally don’t find either of those 2 moves extremely exciting, though both could certainly have implications for many of China’s smartphone makers and Internet companies.
Alibaba Retains Yahoo Ties 雅虎高管进入阿里巴巴董事会
There’s an interesting new announcement from leading e-commerce firm Alibaba, which could be simply a straightforward board appointment but could also signal a potential positive development for its stormy relationship with longtime US partner Yahoo (Nasdaq: YHOO). I’ll make a strong disclaimer now and say that everything I’m about to write is highly speculative, since there’s nothing in this new announcement besides the naming of a Yahoo senior executive to Alibaba’s board. But that said, the fact that Alibaba is making the announcement at all is noteworthy, since these 2 companies have not made many upbeat joint announcements in the recent past due to their difficult elationship under previous Yahoo CEO Carol Bartz.
Auditor Tussle With US Regulator, Defections Ahead 审计机构与SEC角力
Media are buzzing with word that the US securities regulator is once again tussling with major auditors over access to the accounting records of US-listed Chinese firms, in the latest chapter of an ongoing story; but what has me more intrigued is the scramble that is probably taking place behind the scenes, as those same auditors try to figure out what they will do when the inevitable happens and they are forced to share their records with the US Securities and Exchange Administration.
ZTE Gears Up For Govt Hand-Outs 中兴积极准备获得政府支持
Having been locked out of the US and worried about the potential for similar problems in Western Europe, struggling telecoms equipment maker ZTE (HKEx: 763; Shenzhen: 000063) is fighting back by doing what it knows best: taking free money from Beijing. I don’t want to sound too negative here, but this latest deal between ZTE and China Development Bank is exactly what ZTE should NOT be doing, at least if it ever wants to convince the world that it’s a serious commercial company. But perhaps the company simply doesn’t care anymore what others think, and there’s also the very real possibility that ZTE is simply fighting for its very survival at this point.
News Digest: December 5 报摘： 2012年12月5日
The following press releases and media reports about Chinese companies were carried on December 5. To view a full article or story, click on the link next to the headline.
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- US Charges ‘Big Four’ Accountants Over China (English article)
- ZTE (HKEx: 763) Forms Strategic Tie-Up With China Development Bank (HKEx announcement)
- Nokia (Helsinki: NOK1V), China Mobile (HKEx: 941) In Lumina 920 Deal -Source (English article)
- Tencent (HKEx: 700) Microblog Adds Intelligent Keyword Search Feature (English article)
- Jingdong Mall, Winekee Partner with French Wine Estates (English article)
Solar: LDK Cuts, First Solar in China 中国光伏产业：几家欢喜几家愁
There’re quite a few news bits coming from the solar sector today, with more downbeat news from struggling LDK Solar (NYSE: LDK) even as 2 western panel makers make important new inroads to the China market. Meantime, Canadian Solar (Nasdaq: CSIQ) is also getting some good news in the form of new financing from a major western commercial lender for a new solar power project in Canada.
Baidu on the Downtrack? 百度在滑落？
Excitement over the first serious challenge to Baidu’s (Nasdaq: BIDU) longtime supremacy in online search seems to be getting a bit overblown, with investors jumping on just about any excuse to punish Baidu and reward fast-rising challenger Qihoo 360 (NYSE: QIHU). Some may find it a bit odd that I’m defending Baidu at this juncture, since I’ve been a regular critic of this company that has abused its dominant position in online search for years to squelch potential rivals. But all I’m really saying is that it’s far too early to write a death notice for Baidu, which still has plenty of fight left in it as it tries to defend its dominant position that has seen it control more than 70 percent of China’s lucrative online search market for years.
